Mortgage Professional Australia issue 14.12

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MPAMAGAZINE.COM.AU ISSUE 14.12

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MEET THE GAME CHANGERS NEW MFAA CEO EXCLUSIVE FIRST IN-DEPTH INTERVIEW

THE AMA AWARDS THE MORTGAGE INDUSTRY’S NIGHT OF NIGHTS IN PICTURES

SHORT-TERM LENDING REAL-LIFE SCENARIOS EXPLAINED

CONTENTS / MPA 14.12

MPAMAGAZINE.COM.AU

18

MORTGAGE INSIDERS

New MFAA CEO (XCLUSIVE Á RST IN DEPTH INTERVIEW

46 FEATURES

NEWS

FEATURES

Australian Mortgage Awards

4 | News and tips Intelligence and tips for the cutting-edge mortgage professional

22 | Short-term lending Two real-life scenarios to get you started

Highlights of the industry’s premiere awards night at Sydney Town Hall

NOW ONLINE 30-second round-up The week’s product updates, every Friday

62 | The Data: housing construction Our blueprint guide to recent construction trends

Movers and shakers Arrivals and promotions in the industry, last Monday of every month Lenders wanted Our popular weekly loan scenario returns MPA TV Aggregators roundtable videos and much more mpamagazine.com.au

42 | Kiran Thapa Author, engineer and researcher, on moving into broking

MORTGAGE INSIDERS COVER STORY

14 NEWS

News Analysis Why house prices are at a crossroads

28 | MPA Top 100 Brokers 2014 Read about an extraordinary year for the industry’s most exclusive list

64 | Favourite things 6URÁ NG AT DAWN WITH 9OW &(2 and MFAA president Tim Brown

BUSINESS STRATEGY 10 | Marketing Reaching potential customers through video

DECEMBER 2014 | 1

EDITOR’S LETTER / 14.12

MPAMAGAZINE.COM.AU

REFLECTING ON AN EXTRAORDINARY YEAR Our December issue is never less than exciting, but this year is something else. Not only do you have the eagerly awaited MPA Top 100 report and the Australian Mortgage Awards, but there’s also a new MFAA CEO in town and MPA features her ďŹ rst full-length interview.

With all the glitz and glamour – the wellearned reward for a fantastic year – it’s easy to forget about the wider picture. Perhaps the most interesting story I’ve done this month was our news analysis on house prices. Talking to leading economists and brokers from around the country has proved an eye-opening and sobering reminder that the huge numbers we are seeing in Sydney and Melbourne are simply impossible for many hard-working Australian brokers, as different states head in very different economic directions.

That said, I still feel honoured to have witnessed what has been a truly extraordinary year for mortgage broking. Through an enormous amount of hard work, 2014’s Top 100 brokers have shattered a number of MPA records, and the AMAs have left me in no doubt that this industry works hard and plays even harder.

Congratulations to all our winners for taking their profession and the industry to a whole new level.

Sam Richardson, editor, MPA

2 | DECEMBER 2014

COPY & FEATURES

EDITOR Sam Richardson PRODUCTION EDITORS Roslyn Meredith, Moira Daniels CONTRIBUTORS Sarah Megginson, Karen Gately, Roland Hanekroot, Blaise van Hecke

ART & PRODUCTION

DESIGNERS Red Redrico, David Calderon DESIGN MANAGER Daniel Williams

SALES & MARKETING

NATIONAL SALES MANAGER Rajan Khatak ACCOUNT MANAGER Simon Kerslake MARKETING EXECUTIVE Alex Carr TRAFFIC MANAGER Abby Cayanan MARKETING & COMMUNICATIONS MANAGER Lisa Narroway

CORPORATE

CHIEF EXECUTIVE OFFICER Mike Shipley CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR Justin Kennedy ASSOCIATE PUBLISHER Rajan Khatak CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil Editorial enquiries Sam Richardson +61 2 8437 4787 sam.richardson@keymedia.com.au

CONNECT

Contact the editor: sam.richardson@ keymedia.com.au

Printed on paper produced from 100% sustainable forestry, grown and PDQDJHG VSHFLoFDOO\ IRU the paper pulp industry

Advertising enquiries Sales Manager Rajan Khatak tel: +61 2 8437 4772 rajan.khatak@keymedia.com.au Account Manager Simon Kerslake tel: +61 2 8437 4786 simon.kerslake@keymedia.com.au Subscriptions tel: +61 2 8011 4992 • fax: +61 2 9439 4599 subscriptions@keymedia.com.au Key Media keymedia.com.au .H\ 0HGLD 3W\ /WG UHJLRQDO KHDG RIoFH Level 10, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 • fax: +61 2 9439 4599 2IoFHV LQ $XFNODQG 7RURQWR 'HQYHU 0DQLOD mpamagazine.com.au Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as MPA magazine can accept no responsibility for loss.

ROUND-UP / NEWS AND TIPS

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ROUND-UP / NEWS AND TIPS

ONLINE LENDERS FINDING A NICHE IN REFINANCING

Some consumers seem happy to bypass banks and brokers for a cheaper rate Web-only lender Loans.com.au recently released data SHOWING THAT OF THEIR CUSTOMERS WERE REĂ NANCING existing home loans. This compared with 37% that needed Ă NANCE TO BUY A PROPERTY 7HE COMPANY BACKED BY NON BANK LENDER )IRSTMAC CLAIMS THE RESULTS SHOW THEY ARE A THREAT TO THE Ă NANCIAL ESTABLISHMENT INCLUDING BROKERS h7HESE ARE PEOPLE WHO HAVE IDENTIĂ ED THE WAY TO GET the best deal on their home loan is not through one of the BIG BANKS i EXPLAINED )IRSTMAC MANAGING DIRECTOR .IM Cannon. “It’s through a lean lender who doesn’t pass on THE COSTS OF A BRANCH NETWORK BROKER COMMISSIONS AND ADVERTISING CAMPAIGNS i /OANS COM AU CURRENTLY HAS NO INVOLVEMENT IN THE THIRD PARTY CHANNEL Talking to Australian Broker &ANNON COMPARED BROKERS TO TRAVEL AGENTS h2NCE PEOPLE PLANNING THEIR HOLIDAY WOULD go to a travel agent who would take care of all their

BOOKINGS AND THAT WOULD BE THAT 1OW IF PEOPLE GO TO A TRAVEL AGENT ITgS OFTEN FOR INFORMATION THAT THEY WILL TAKE AWAY AND DO THEIR OWN BOOKINGS AND MAKE SAVINGS i Brokers’ future value is in managing “complicated loan ARRANGEMENTS THAT REQUIRE EXPERTISE AND INDUSTRY KNOW LEDGE i HE SAID h,TgS NOT ENOUGH TO JUST TALK TO CLIENTS AND HELP THEM Ă LL OUT FORMS ONLINE LENDERS DO THAT TOO i :HILE &ANNONgS COMMENTS ARE INĂ€AMMATORY k AND /OANS COM AUgS MARKET SHARE IS HARDLY ENORMOUS k BROKERS SHOULDNgT IGNORE THE SPECIAL STATUS OF REĂ NANCING CUSTOMERS 7HE NUMBER OF REĂ NANCING LOANS HIT A SIX YEAR HIGH IN $UGUST ACCORDING TO LENDING STATISTICS FROM THE $%6 EVEN WHEN MANY OTHER MEASURES FELL ,F THE HOUSING MARKET SLOWS k AS INDICATED BY $UGUSTgS $%6 NUMBERS AS WELL AS 6EPTEMBERgS 53 'ATA REPORT k REĂ NANCING COULD BECOME FAR MORE IMPORTANT TO BROKERS

INVESTMENT LENDING SHARE BY STATE* 2008Æ2014 NSW

38%Æ45%

VIC

26%Æ26%

MONTHLY LENDING FIGURES QLD Owner-occupied property loans

2%

Commercial ďŹ nance

6.3%

Personal ďŹ nance

5.2%

Source: ABS Lending Finance, Aug 2014 – all ďŹ gures seasonally adjusted

4 | DECEMBER 2014

23%Æ14.5% *of all lending for investment properties in Australia Sources: ABS Housing Finance, Aug 2014; Digital Finance Analytics

ROUND-UP / NEWS AND TIPS

MPAMAGAZINE.COM.AU

ROUND-UP / NEWS AND TIPS

“Lenders are providing ‘low doc’ loans to a narrower range of borrowers since the introduction of responsible lending laws in 2010”

“Lenders performing LIMITED VERIÁ CATION OF borrowers’ ongoing Á XED EXPENSESi

Self-employed borrowers are now the primary client group

“Lenders are obtaining additional information to verify a self-employed borrower’s income”

ASIC LOW-DOC REVIEW The Australian Securities and Investments Commission has just published its report on lending practices in the low-doc sector. Here are ITS MAIN Á NDINGS

“Lenders relying solely on benchmark living EXPENSE Á GURESi

Typical sources of information include business bank account statements and letters from an accountant

“Poor-record keeping, including not recording the outcome of inquiries into borrowers’ requirements and objectives”

ASIC recommends both poverty measures and self-reported living expenses Source: ASIC Report 410: Review of ‘low doc’ home lending following the introduction of the responsible lending obligations, and Media notes September 2014

6 | DECEMBER 2014

ROUND-UP / NEWS AND TIPS

MPAMAGAZINE.COM.AU

ROUND-UP / NEWS AND TIPS

CONNECTIVE KICKS OFF FIRST OVERSEAS CONFERENCE (XUBERANT WEEK IN )IJI CELEBRATES INÀUX OF NEW BROKERS AND INCREASE IN SETTLEMENTS Major aggregator Connective recently held its ÁRST OVERSEAS CONFERENCE WITH ITS BROKERS HEADING TO )IJIgS 6OÁTEL 5ESORT &ONNECTIVE PRINCIPAL 0URRAY /EES SAID THAT AFTER NUMEROUS CONFERENCES IN $USTRALIA THE DECISION TO HEAD ABROAD WAS ONE THAT TOOK COURAGE h,T WAS ABOUT BRAVERY :EgVE ALWAYS BEEN FAIRLY CONSERVATIVE SO WE HAD SEVEN CONFERENCES IN A ROW IN $USTRALIA 7HE MESSAGE FROM THE BROKERS WHICH WE WERE LISTENING TO WAS f:E WOULD LIKE TO GO OVERSEASg 6O WE TOOK THE LEAP OF FAITH AND THEYgVE SUPPORTED IT WHICH HAS BEEN FANTASTIC i /EES SAID 7HE THREE DAY CONFERENCE INCLUDED RENOWNED SPEAKERS SUCH AS NAVY DIVER AND SHARK ATTACK SURVIVOR 3AUL DE *ELDER FORMER 81 PEACEKEEPER 0ATINA -EWELL AND NOTED FUTURIST 7IM /ONGHURST 7HE CONFERENCE ALSO TREATED BROKERS TO A )IJIAN STYLE FEAST AND KAVA CEREMONY A JAUNT TO A PRIVATE ISLAND AND A GALA DINNER AND AWARDS CEREMONY &ONNECTIVE PRINCIPAL 0ARK +ARON TOLD THE CONFERENCE THE AGGREGATOR HAD SEEN IMPRESSIVE GROWTH OVER THE LAST YEAR +E SAID THE GROUP HAD ADDED MORE THAN NEW BROKERS AND THAT GROWTH HAD COME FROM THE AGGREGATORgS MARKETING EéORTS AS WELL AS THROUGH THE COMPANYgS EXISTING BROKERS h7HEREgS BEEN A GREAT EéORT FROM OUR SALES TEAM AND OUR MARKETING TEAM TO GET OUT THERE AND EXPLAIN THE BENEÁTS OF BEING WITH &ONNECTIVE $ LOT OF BROKERS ARE SAYING f<EP WE GET THATg :EgRE ALSO

8 | DECEMBER 2014

SEEING YOU GUYS GROW YOUR BUSINESSES AND RECRUIT BROKERS AS WELL i +ARON SAID THE COMPANY HAD ALSO SEEN hTREMENDOUS VOLUME GROWTHi IN ITS SETTLEMENTS +E POINTED TO DATA SHOWING THAT &ONNECTIVEgS $UGUST SETTLEMENTS WERE UP ON $UGUST NUMBERS h7HESE ARE SETTLEMENTS NOT APPLICATIONS AND NOT PROCESSED LOANS 7HEYgRE ACTUAL SETTLEMENTS

MONEY THAT HAS GONE INTO THE BANK AND COMMISSIONS HAVE BEEN PAID ON 7HATgS WHAT WE LIKE TO COUNT i +ARON SAID +E PUT THE GROWTH IN SETTLEMENTS DOWN NOT ONLY TO THE RISE IN BROKER NUMBERS BUT ALSO TO STRONG EéORTS ON THE PART OF THE COMPANYgS EXISTING BROKERS h:E KNOW ITgS NOT JUST THROUGH NEW BROKERS COMING ON BOARD :E KNOW ITgS THROUGH YOU GUYS GROWING YOUR BUSINESS i

BUSINESS STRATEGY / VIDEO MARKETING

Videos which promote your business and inform potential customers are now expected by the vast majority of visitors to your website. Video production expert (CMç "LBCPQML reveals what content your potential viewers are looking for *D WMS U?LR RM QR?LB MSR DPMK WMSP AMKNCRGRGML ?LB be seen as an expert credit advisor, video is an essential tool in showcasing your unique skills and point of difference.

Video has the power to move your audience. It can engage them with compelling information and, importantly, can connect with your audience emotionally. After all, selling is an emotional sport so you may as well play the game well!

For many, approaching a credit advisor can be an anxious experience. Purchasers probably have their heart set on a new home, or a first home and they are hoping they will be able to borrow enough cash.

With the right type of video, you can assure them that you have the answers and solutions to their borrowing situation.

Video allows you to build rapport before you have even met your customer. It allows you to show some personality and build trust in an authentic way – in a way that is far more powerful than the written word or that corporate head shot on your website or LinkedIn profile.

10 | DECEMBER 2014

MPAMAGAZINE.COM.AU

Video is not going away. It has become the easy way to communicate online, to gain buy in and to manage expectations. A recent survey found that 96% of consumers say video assists them with their buying decisions. Research also supports that customers now expect video on any reputable website and 77% of consumers believe companies that create videos are more engaged with their customers.

If that wasn’t enough – 73% of those interviewed said that they are more likely to purchase a product or service after watching a video that explains it.

So, what are you doing to build your business with video?

Here are five ways you can use video in your business.

1

Introduce the team a. Produce short clips – up to a minute maximum – which introduce the people on your team.

Build rapport with your customers and show your viewers who you are, and why you do what you do.

Share why you love your job and what makes you good at it. Don’t be afraid to include personal information about you – are you married, do you have kids, and do you play sport? What hobbies or interests do you have? Let your customers know you are a real person who understands them as this is a great way to build rapport.

2

5GNQ DMP ECRRGLE RFC ¿L?LAC WMS LCCB a. What are some of the common issues you have to deal with? Prepare some tips for your customers to help make their financing journey easier. It could include topics such as: i. Know how much you can borrow before you make an offer ii. How to save for a deposit iii. What you need for a quick approval iv. The benefits of an offset facility v. When interest only is a good idea vi. Why the banks don’t want you to refinance

3

$MKKCLR?PW ML GQQSCQ a. As movement happens in the industry provide some video commentary about it.

Sometimes nothing has happened – the RBA hasn’t changed interest rates. Then put out a video to explain why they haven’t changed interest rates and what this means from a borrower’s perspective. b. If the property market is on the move, then explain why now is a good time to acquire property.

DECEMBER 2014 | 11

BUSINESS STRATEGY / VIDEO MARKETING

4

*LRCPTGCU QSAACQQ QRMPGCQ a. If you have customers who are doing great things with their investments then share the love! Interview them about their strategy. How did they get into the market? When did they decide to make property a key point in their financial goals?

What influences their buying decisions? Do they mix negatively geared with positively geared properties?

5

$?QC QRSBGCQ a.You can also include case studies. These might be stories from different customers about how you provided the ideal facility for them – often in spite of themselves. If someone else can sing your praises with a specific story it is extremely powerful. b. The typical case study will follow the following format: G What was happening in the customer’s life before you? What was their need? Why did they go looking for you?

GG What did you do for them? (Asked the right questions, showed options they didn’t know existed, explained solutions they hadn’t considered… ) GGG How is their life now? How relieved are they? How happy are they? How are they feeling? How excited are they that they have their new home?

A I’m a bit of a fan of case studies because it is subtle selling with great power. The story should focus on the journey of the customer. It is about them. It just happens that at a critical time in the story you were there to provide a solution they needed. And then at the end they are in a much better place because of it.

B Remember it doesn’t always have to be about you.

It’s about providing quality content that your audience will find valuable.

(CMç "LBCPQML is owner of Sonic Sight, a corporate video production company.

He presents on using video in business and is the author of the Amazon Bestseller “Shoot Me Now – Making videos to boost business”. Visit www.sonicsight.com.au

12 | DECEMBER 2014

6

5CQRGKMLG?JQ a. Hearing your customers explain how your service enabled them to get their dream home is very powerful. Video testimonials are more energetic and credible than the written word. A video testimonial can give your viewer the reassurance that you understand the individual needs of each customer and can provide the right facility for their situation. A testimonial is different from a case study. A testimonial will usually focus on the quality of the service you provided and less

Video allows you to build rapport before you have even met your customer. It allows you to show some personality and build trust in an authentic way on how it impacted on them.

Be smart if you embark on the video production route. Plan your videos and book the video production company so that you can create many videos in the one booking. Generally production companies charge for a half day or a full day shoot. If you ask your clients to come by to provide testimonials or case studies then you could easily fill up the day with filming. This will provide you with plenty of content.

If you film your customers then ask them to supply photos of their homes. At the end of the day this is what you are selling and by seeing the end result of your work, your prospects will be more emotionally connected to you.

If you are presenting to camera then consider using a teleprompt. This will enable you to focus on how you deliver the information without the pressure of having to remember the lines. The teleprompt can have the text loaded up for you to read. With a piece of glass that acts as a two way mirror you can read the text while looking straight down the lens of the camera to the audience beyond.

Once you have your content, then be strategic with how you deliver it. Regularity is the key. If you have enough content then provide a video every month, fortnight or week to your audience. Whatever it is, stick to it. It has been proven that regular content builds and maintains an audience.

With regular, quality, relevant video content, your business will grow as the word spreads of your expertise and brand.

NEWS ANALYSIS / COMMISSION VS SERVICE

NEWS ANALYSIS / HOUSE PRICES

At the crossroads

+OUSE PRICES HAVE PEAKED RECENT Ă GURES SUGGEST AND THE PHENOMENAL GROWTH OF THE PAST YEAR NOW APPEARS UNSUSTAINABLE Sam Richardson INVESTIGATES WHAT THE FUTURE HOLDS FOR BROKERS

Spring, for the housing market, has perhaps better resembled the build-up to a monsoon. From Reserve Bank governor Glenn Stevensâ&#x20AC;&#x2122; comments in July onwards, it seems the tension has mounted, with prices rising at faster and faster levels, debt-toincome ratios spiralling, and brokers processing ever more impossible volumes. Now the storm has ďŹ nally broken, and news of falling loan volumes is reminding investors and brokers that the housing market is indeed â&#x20AC;&#x2DC;unbalancedâ&#x20AC;&#x2122;, but in a far more comprehensive way than Stevensâ&#x20AC;&#x2122; use of the term suggested.

Octoberâ&#x20AC;&#x2122;s ABS report, showing a 1.2% drop in the value of new property loans in August, also revealed a number of underlying trends that threaten to fragment the market. Even if Novemberâ&#x20AC;&#x2122;s update shows a slight improvement (such are the perils of writing a monthly magazine), the divide between investors and owner-occupiers, domestic and foreign, metropolitan and regional will continue to grow.

Weâ&#x20AC;&#x2122;ve drawn on the latest ďŹ gures and asked leading economists and of course top brokers what the volatility of the past months means for brokersâ&#x20AC;&#x2122; business.

WHAT THE REAL ECONOMY LOOKS LIKE Unemployment rate

Employment growth

CPI growth

GDP growth

Percent

6 5 4 3 2 1 0

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016 FORCAST

14 | DECEMBER 2014

2017

MPAMAGAZINE.COM.AU

INVESTORS AND THE BLAME GAME Ostensibly, it all started in Hobart on 3 July when Stevens told a conference of economists that “investors should take care” in the Sydney market.

He warned: “People should not assume that prices always rise. They don’t; sometimes they fall.”

Media focus has changed little since then, with good reason: refinancing aside, the proportion of loans going to investors hit 49.7% in August. “This is the highest share on record,” ANZ economist David Cannington told the Sydney Morning Herald.

“It has risen from around 40% when the RBA started cutting rates in November 2011.”

Clearly, investors are not all the same, and public opinion is a poor guide to the sector.

“Foreign investors are probably responsible for between 5% and 10% of investment purchases; “self-managed super funds probably about 3% of purchases; and negative gearing, which is the biggie, is responsible for probably 70–80% of investor property,” insists Martin North, principal of research firm Digital Finance Analytics (DFA).

But abandoning negative gearing would cause ‘havoc’, Aussie Home Loans chief John Symond recently told Australian Broker.

It’s obvious that investors are driving out first home buyers, who now have their lowest share of the market since records began. More surprising, as AMP chief economist Shane Oliver reminds us, investors and first home buyers can be difficult to separate: ‘rentvestors’ purchase first investments ahead of first homes while continuing to rent.

Perhaps the plight of rentvestors – competing with far wealthier investors – goes some way towards explaining August’s 0.1% fall in the value of new investment loans. But that explanation doesn’t go far enough – we need to look at the wider economy.

WHAT’S DRIVING INVESTMENT? Australia’s housing market is less of a bubble and more of a greenhouse: built on reasonably solid foundations, it does a good job of trapping heat.

But when we look out of the window we can see that the Australian economy has had nothing but rain (metaphorically speaking) for some time now.

Australia’s ‘misery index’ – a sum of employment and inflation rates – is at its highest level since 2008, after wages declined relative to inflation for the second year in a row, and the IMF rates Australian house prices as the third most overvalued on earth. “House prices,” argues DFA’s

North, “are out of kilter with any measure you choose to think about”.

Rising unemployment, forecast by BIS Shrapnel to go from 6.1% in August to 6.3% by the end of this year, is one of many reasons why the Reserve Bank has been so reluctant to raise interest rates in response to house prices. Instead they have resorted to what commentators term ‘jawboning’ (veiled threats), with RBA assistant governor Dr Malcolm Edey telling the Senate on 2 October that “I expect there will be … an announcement before the end of the year” regarding interest rates.

Potential macroprudential tools are subject to similar uncertainties: penalising investors while protecting first home buyers and cooling some but not all regions is easier said than done.

Yet jawboning seems to be working, in that it is making potential investors take notice of the world beyond the housing market. One indication of this is the recent Westpac/Melbourne Institute Index of Consumer Sentiment, which recorded an alarming 4.6% fall in the month of September.

Although the proportion of respondents expecting house prices to rise increased, there was an 8.2% fall in those believing that now is the ‘time to buy a dwelling’, a 23% drop from last year. Crucially, says chief economist Bill Evans, “respondents remain nervous around the labour market”.

The original and long-term aim of low interest rates was not to benefit investors only but instead to boost the construction industry. “The last thing the Reserve Bank wants,” CommSec’s Savanth Sebastian told Australian Broker TV, “is [to] curb development.” Now numbers suggest development is picking up: the performance index of the Australian Industry Group/Housing Industry Association hit a nine-year high in September, led by house building. And QBE’s recently released Australian Housing Outlook optimistically claims that the level of new home commencements – ie supply – is now above the level of demand in all states except Queensland.

Housing deficiency is therefore starting to be tackled, but the sheer size of the supply-demand gap in certain states will mean development won’t reduce prices for years (until around 2016/17 according to QBE’s report). If for some reason no more houses came up for sale, explains CommSec’s Sebastian, Sydney would “effectively run out of the stock that’s for sale in 1.8 months”. So construction could explain price correction in the long term, but the decline in the value of loans

MPAMAGAZINE.COM.AU

AUGUST’S ALARMING FIGURES

IN THE VALUE OF ALL HOME LOANS

IN THE NUMBER OF HOME-LOANS FOR OWNER-OCCUPIERS (EXCLUDING REFINANCING)

IN THE VALUE OF INVESTMENT HOUSING LOANS Source: ABS – Housing Finance Aug 2014 (published 10 October k ALL ÁGURES SEASONALLY adjusted)

DECEMBER 2014 | 15

NEWS ANALYSIS / COMMISSION VS SERVICE

NEWS ANALYSIS / HOUSE PRICES recorded by the ABS seems to have come a few years early.

A NATION DIVIDED So far this article has referred to the Australian housing market, but in practice there’s no such single entity. Over the past 12 months Sydney’s house prices have grown by 14.3%, Melbourne’s by 8.1%, and all other capitals by an average of just 4.8%, according to RP Data’s CoreLogic September report. Just as house prices seem to be detached from the real economy, Sydney’s housing market seems to have detached itself from the rest of Australia, and is heading in a very different direction.

MPA spoke to two expert brokers based less than three hours away from each other but who have had very different experiences: Raymond Xue of Sydney CBD-based ACA Mortgage Solution, and Laurie Parkes of Bathurst’s FrontRunner Finance Solutions.

Xue has had a record-breaking year in all senses, writing $247m worth of loans. In contrast, says Parkes: “What is going on in Sydney is not being translated into Bathurst at all. We’re going through a quiet period. Since October last year we’ve only been doing average business … there’s certainly no boom going on here; if anything it’s slowed down a little bit. It’s extraordinary, considering low interest rates.”

Interestingly, Bathurst used to be prime investor turf, Parkes says. “I might be wrong, but I think it’s a lack of confidence. Bathurst is a city where investment has been really good; it’s a university town.”

You might also expect a trickle-down effect between the two areas as overpriced Sydneysiders look for cheaper property in surrounding regional suburbs. Undoubtedly, given fundamental questions of land supply and demand, you wouldn’t expect Bathurst investor appetite to keep pace with Sydney’s, but you also wouldn’t expect the two cities to go in such different directions.

Xue is confident of growth for the next two to three years, until housing development makes a serious impact on Sydney’s housing deficiency.

The reason? His Chinese clients won’t be affected by natural correction or RBA measures; they’re guided by wider international developments.

“At the moment, dollars are low in comparison to Chinese money, so more money will come to Australia,” Xue says. “Chinese property is not as good as before, so they’re thinking of buying property elsewhere to diversify their risk … with this trend, I can’t see any signs of slowdown.”

GO YOUR OWN WAY A two-speed economy is emerging, between the vast majority of Australia where housing is starting to

THE RISE OF THE TWO-SPEED HOUSING MARKET Brisbane

Melbourne

Perth

Source: QBE Australian Housing Outlook/BIS Shrapnel

Sydney

% change

35 30 25 20 15 10 5 0 -5

Quarter ended June

2007

16 | DECEMBER 2014

2008

2009

2010

2011

2012

2013

2014

2015

2016 FORCAST

2017

MPAMAGAZINE.COM.AU

reflect economic realities, and Sydney and Melbourne where it reflects international trends.

Although we can expect the latter cities to dominate top-volume lists over the next few years, quality brokers outside these areas may also have reasons for confidence. With housing becoming less of a guaranteed money-maker, it’ll give certain brokers, and certain areas, a chance to distinguish themselves.

Take the example of Tiffen and Co., a brokerage based in Canberra. By the numbers, Australia’s capital has a relatively quiet housing market, with prices rising just 1.7% over the last year, the weakest increase of all capitals. Yet Gerard Tiffen is highly optimistic. “The residential market is really booming along … clearance rates are going through the roof,” he says.

Although units are struggling in Canberra, renovation finance is beginning to play a more important role, Tiffen says. “It’s a big part of our business right now, and it’s really changed dramatically over the last six to eight months … we’re not targeting that market, but we find more and more people are falling into it.”

Bryan Coleman of Priority Home Loans adds another voice to the debate. His stomping ground, Tamworth, in regional NSW, is doing surprisingly well. “We are enjoying some of the return to confidence in the economy … prices here are just so much better than Sydney it’s just ridiculous. It asks the question for people: why wouldn’t you try to move to a county area? It’s just so much more affordable to live.”

Broking in a place like Tamworth requires a deep understanding of the local economy. “[Confidence] is driven by different things here: if it doesn’t rain

here, people aren’t confident … it’s devastating.

We’ve got a lot of mining industry that’s growing here, and that pushes the market up,” says Coleman.

Finally, it would also be wrong to assume that the increase in foreign investors is a phenomenon exclusive to Sydney and Melbourne. “Chinese buyers are discovering Brisbane,” declared September’s McGrath Report, and Xue agrees. “If I have a chance I want to expand to Queensland in the next two years; it’s going to boom up. Sydney prices are too high.”

Another broker who specialises in foreign clients, Kiran Thapa of CAPKON – Property Investment Specialists, says Darwin is his biggest client base outside of Sydney, and he’s organising seminars in Dubbo, Wagga Wagga and other regional areas in NSW. Ignore the cynics: we’re not at a tipping point, but we are at a crossroads. A two-speed housing market might seem bewildering to brokers (and frustrating to regulators), but it gives the rest of Australia a chance to leave the sweltering greenhouse of Sydney-Melbourne prices and actually reflect the real economy.

In the long term, perhaps this is a more sustainable situation that gives good brokers a chance to distinguish themselves, even if the short term may seem like a rude awakening.

Gerard Tiffen sums up the situation well: “I think people just keep using brokers and going [direct] to the banks less and less. So our market share is growing, even though maybe the pie is getting a little smaller.”

“House prices are out of kilter with any measure you choose to think about”

DECEMBER | 17

HEAD TO HEAD / SIOBHAN HAYDEN

Siobhan Hayden: Listening & Learning After 12 years with Phil Naylor at the helm, itâ&#x20AC;&#x2122;s time for the MFAA to start a new chapter. New CEO Siobhan Hayden, previously of Finware, tells MPA how members will drive that change 18 | DECEMBER 2014

MPAMAGAZINE.COM.AU

MPA: What do you think the MFAA were looking for when they hired you?

Siobhan Hayden: I couldn’t say exactly what they were looking for; I only know what they chose.

My career background is quite well rounded: I started in people management, in human resources; moved for a time to Ireland, working for Guinness in corporate governance; returned for a strategic role with Woolworths, in logistics and blue-collar environments, and then moved into a project management role, building a warehouse; then in Finware for the last eight years, designing software for the market and technical solutions.

Coupled with my educational background I’m probably a well-rounded candidate, aware of the industry, very involved in broker businesses, and I’m the successful candidate, so I could probably say they were looking for someone with my skills.

MPA: How will you get the views of MFAA members in a structured way?

SH: The first step would be to work with the team to put out an online survey, which will be distributed to all members, which would be giving us an aggregate view of general responses and the hot topics I’d like to focus on. I’m then looking at something around a two-hour session in all the different areas – all the different states and regional areas – with a goal, personally, of about 10% of our members attending.

The first part would obviously be [based] around what the survey initially showed us; what the hot topics were. And then I’d like to spend the next hour and a half working in teams or groups, workshopping what those challenges are, not only in their businesses today but over the next three to five years. Those findings will be put through into a consolidated report, to then be provided back to the members.

MPA: Is input from lenders and aggregators less important at this stage?

SH: No, not at all. The mission of the MFAA is to support, promote and represent professional credit advisers. We don’t operate in a vacuum: credit advisers or mortgage brokers are a microcosm of

“The best compliment I’ve ever received is ‘how long have you been a broker for?’” aggregators, lenders, or other key stakeholders, so their viewpoints are equally important. It’s like a 360-degree feedback when you do appraisals of people: you need to look at them from every angle.

Talking to all people, all stakeholders, is equally important.

MFAA SELECTION PROCESS

MPA: How are you going to go about talking to lenders and aggregators?

SH: I’ve already established, through my time at Finware, great relationships. We’re an independent provider of technology to the market, so I have a great relationship with many aggregator heads already. Lenders … we represent lenders on our software platform, so I’ve met lots of lenders … It’s about getting in front of people and having a chat with them. And again, this would be in a group environment, ideally four to five people in that session. But with the mortgage advisers I’d like to have about 40 people in that session.

MPA: "PC RFCPC ?LW QNCAG¿ A EPMSNQ UGRFGL RFC broking community, for example commercial brokers, who perhaps deserve special attention or special sessions devoted to them?

SH: At this stage, I wouldn’t suggest anyone particularly needs special attention: everyone has a particular viewpoint on what they want to achieve from their industry body. We represent a diverse range of stakeholders … and I think a great thing about workshopping ideas and challenges for business is that it may seem like a commercial finance orientated issue, or equipment finance, but effectively the challenges are generally similar: diversification, technology, where the market is.

We’re in a mature market at the moment; we’ve

DECEMBER 2014 | 19

HEAD TO HEAD / SIOBHAN HAYDEN

SIOBHAN HAYDENâ&#x20AC;&#x2122;S CAREER TIMELINE

1997 -OINS LOGISTICS Ă RM 0AYNE 1ICKLESS IN +5 ROLE

2002 0OVES TO :OOLWORTHS AS A PROJECT MANAGER

2008 2PERATIONS MANAGER AT )INWARE WHICH WAS FOUNDED IN BY HER HUSBAND -ASON +AYDEN

2014 6ELECTED AS THE 0)$$gS NEW &(2

Education 2000 %ACHELOR OF &OMMERCE +UMAN 5ESOURCE 0ANAGEMENT AND ,NDUSTRIAL 5ELATIONS 8NIVERSITY OF :ESTERN 6YDNEY

2005 0%$ 0ACQUARIE 8NIVERSITY

2005 'IPLOMA IN 3ROJECT 0ANAGEMENT $USTRALIAN ,NSTITUTE OF 3ROJECT 0ANAGEMENT

20 | DECEMBER 2014

gone through a growth phase, and a business in any environment thatâ&#x20AC;&#x2122;s about maturity has different requirements.

MPA: Given that the MFAAâ&#x20AC;&#x2122;s board has recently changed to prioritise loan writers, how would you respond to criticism that you havenâ&#x20AC;&#x2122;t QNCAGÂżA?JJW @CCL ? KMPRE?EC @PMICP WMSPQCJD SH: In Finware, my most recent role, albeit as a business owner, has been out in the market with my clients; my customers. That involves all different aggregation models, all around Australia and New Zealand, where our business is. So in that capacity Iâ&#x20AC;&#x2122;m involved in going into broker businesses, and that often is across a kitchen bench, in their own home, and identifying what their challenges are, and maybe how the technical solutions from our business can help beneďŹ t their business or solve that problem or make them more efďŹ cient. Equally, I sit in front of 15 brokers, or 30 brokers, in a boardroom, that have 70 ďŹ nancial planners attached to them. The challenges are somewhat similar. The businesses are very different, of course, but the best compliment Iâ&#x20AC;&#x2122;ve ever received is â&#x20AC;&#x2DC;how long have you been a broker for?â&#x20AC;&#x2122;, when Iâ&#x20AC;&#x2122;ve never actually been a broker. So I feel criticism, if that exists, will probably dissipate; itâ&#x20AC;&#x2122;s based on performance, and my ďŹ rst goal is to get out there and talk to people, and deliver solutions that meet their needs.

MPA: What do you believe was Phil Naylorâ&#x20AC;&#x2122;s single greatest achievement in his time at RFC .'""

SH: Iâ&#x20AC;&#x2122;d have to reference the National Consumer [Credit] Protection Act, and those changes at that time. Obviously there was a lobbying component to that piece of legislation, which he was heavily involved in, and also the bedding of educational requirements that advisers have to come up to standard with to continue operating.

MFAA continues to be the leading industry body, both from an adviser point of view but also from a legislative point of review: politicians, government still liaise directly with the MFAA in relation to changes and the impact of the industry, and I think thatâ&#x20AC;&#x2122;s a great achievement. Also, from my experience travelling to broker businesses, they are [working] ďŹ&#x201A;at out every day, doing their job, so any deviation to have to come up with a certiďŹ cate IV qualiďŹ cation, and do RPL training, was a huge deviation off their core business. So

the fact that that was all bedded down fairly well, and I think we now have a higher standard and higher appreciation of our industry, I think thatâ&#x20AC;&#x2122;s a great thing.

MPA: With regard to those MFAA educational QR?LB?PBQ F?Q RF?R F?NNCLCB LMU %M WMS RFGLI RFC QR?LB?PBQ ?PC FGEF CLMSEF LMU ?LB BM WMS U?LR RM KMTC RFC ?ECLB? ML SH: Itâ&#x20AC;&#x2122;s deďŹ nitely too early to tell, and extrapolating from my own experiences is not really valid.

Whatâ&#x20AC;&#x2122;s more important is asking the members what they think they need as they look to move forward into the industry, and I think it may come through training in relation to diversiďŹ cation and helping businesses diversify and grow. That would be how I feel coming from a Finware perspective at this point in time, but I could be completely wrong, so itâ&#x20AC;&#x2122;s up to members to inform me and the MFAA team.

MPA: Where is the next big challenge RM RFC @PMICP AF?LLCJ EMGLE RM AMKC DPMK SH: Itâ&#x20AC;&#x2122;s my opinion only at this point in time, and itâ&#x20AC;&#x2122;s my feelings from being around the market, and again itâ&#x20AC;&#x2122;s diversiďŹ cation. Itâ&#x20AC;&#x2122;s been consistently talked about, how we best introduce that to businesses. Aggregators are trying to support their members in that way, and I think the body should be committed to supporting our customers in that way. I think technology will also be a challenge over the next three to ďŹ ve years, not only in relation to managing their own business and being more efďŹ cient, but, in the mature stage of a business, business owners need to achieve more with less output of money. And I think youâ&#x20AC;&#x2122;ll also probably see a growth in that really, really small sector at the moment: consumers going straight to a product via the internet. Theyâ&#x20AC;&#x2122;re the main things, in addition to consolidation.

MPA: 8FCPC UMSJB WMS JGIC RM @C MLC WC?P DPMK LMU 8FCPC UMSJB WMS JGIC RFC .'"" RM @C MLC WC?P DPMK LMU SH: Itâ&#x20AC;&#x2122;s very high level, and thereâ&#x20AC;&#x2122;s no speciďŹ cs, but for me itâ&#x20AC;&#x2122;s around having satisfactorily engaged a minimum of 10% of our members; for that to have fed into a strategic plan that then has initiatives and programs that underlie that; and that the MFAA team is resourced and well versed on what we need to achieve, and weâ&#x20AC;&#x2122;re well down the track of doing that.

FEATURE / SHORT-TERM LENDING

Short-term lending presents big challenges but bigger rewards. Here short-term lenders show how brokers can make short-term deals simple, and make impossible deals happen, through real-life examples You can’t get around the fact that short-term lending can be hard work; brokers must contend with limited time, demanding clients and complicated scenarios. However, it is also an opportunity to do major business and earn a client for life. In many ways, short-term lending allows enterprising brokers to break from the crowd.

Recognising the challenge, short-term lenders are increasingly eager to demonstrate the back-end support they offer brokers and businesses, and this article is for those brokers who are looking to move into short-term lending but are unsure where to start. We’ve used real-life scenarios to show how different types of short-term deals work, and how brokers fit into the process.

It’s important to note that different short-term lenders offer very different services. That’s why we’ve used two scenarios and included a table showing lender standpoints on certain issues. Be wary of comparing lenders on the basis of a single criteria, ie turnaround times. Instead look at the types of clients and deals they’re used to working with, and their attention to due diligence and responsible lending.

22 | DECEMBER 2014

CONTENTS

PART 1

Interim Finance: A routine construction loan

PART 2

Semper Capital: More complicated commercial restructuring

PART 3

A comparison of short-term lenders in the market today

MPAMAGAZINE.COM.AU

A routine case

Drawdowns

Interim uses the term â&#x20AC;&#x2DC;drawdownsâ&#x20AC;&#x2122; to denote the payment of funds in instalments to the borrower, which allows them to monitor construction progress. Rarely are funds delivered in one lump sum, Littleford explains. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re not going to give the guy $260,000 AND Ă ND A NEW )ERRARI IN HIS GARAGE and he hasnâ&#x20AC;&#x2122;t made any progress on the property. Heâ&#x20AC;&#x2122;s going to get ON THE Ă RST DRAWDOWN call me two weeks later and say, â&#x20AC;&#x2DC;Andrew, can you look at it?â&#x20AC;&#x2122;... [If] it looks OK to me, weâ&#x20AC;&#x2122;ll get more funds in 24â&#x20AC;&#x201C;48 hours.â&#x20AC;?

In this case there were six drawdowns.

PROPERTY DEVELOPMENT COMPLETION An established residential construction company that specialises in customised projects in Sydneyâ&#x20AC;&#x2122;s lower North Shore required a short-term facility to assist with the completion of their latest project in Northbridge. Funding was crafted to provide a series of drawdowns for the client as the development progressed.

Loan type: Construction caveat/second mortgage (funds advanced by way of a series of drawdowns) Loan amount: $260,000 Loan term: 6 months Borrower: Incorporated entity

Due diligence and turnaround times

h7HERE ARE A NUMBER OF DIĂŠERENT styles of lenders within this space, and that due diligence phase can be compressed,â&#x20AC;? Littleford warns. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s where cowboy lenders can come in, go there, shortcut that process; but, as a result of that, the process becomes much less transparent and can have legislative implications if that isnâ&#x20AC;&#x2122;t done correctly.â&#x20AC;?

Is six days average?

This case was fairly straightforward, says Littleford, WHO SUGGESTS THAT Ă VE TO DAYS is fairly typical for short-term lenders. He argues that shorter advertised turnaround times, ie two days, disguise extra processing that all lenders need to do.

Turnaround: 6 business days

â&#x20AC;&#x153;Things donâ&#x20AC;&#x2122;t go wrong at the end; they go wrong at the start,â&#x20AC;?

Littleford explains. Hereâ&#x20AC;&#x2122;s where the typical problems arise: Incorrect valuations by the short-term lender (it helps if the broker has an idea of this) Delays in getting information from THE LENDER OF THE Ă RST MORTGAGE Documents lacking: short-term lenders need evidence of building PERMITS AND CERTIĂ CATE OF occupation (in NSW) The deal canâ&#x20AC;&#x2122;t be made to suit the client: â&#x20AC;&#x153;If the deal doesnâ&#x20AC;&#x2122;t work for the client, itâ&#x20AC;&#x2122;s not a deal; weâ&#x20AC;&#x2122;re not going to get repeat businessâ&#x20AC;?

How did the process work?

1. Within three days Interim visited the construction site and valued it themselves.

7HEY CHECKED THE Ă RST

mortgage amount with the existing lender.

3. They looked at the approvals.

4. They did checks on the borrower and their company.

5. Mortgage documents were sent to the client (this takes about 24 hours for Interim to turn around).

Upfront fees

Outcome: The property was completed and listed for sale, and sold at its $3.6m target price

Where can things go wrong?

Small construction jobs like this one, worth between $1m and $3m, often go over budget, Interim director Andrew Littleford explains: â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;ll always be a 5â&#x20AC;&#x201C;10% contingency which is contemplated by the builder but PUT OĂŠ UNTIL THE END OF THE PROJECT ... there are some things which crop up which canâ&#x20AC;&#x2122;t be accounted for.â&#x20AC;? Banks are very reluctant to provide extra funds in addition to their loans, he adds.

Interim doesnâ&#x20AC;&#x2122;t charge initial upfront fees, which Littleford CLAIMS hIS A MASSIVE CONĂ DENCE boost for the borrowerâ&#x20AC;?. He says: â&#x20AC;&#x153;We do all our work on spec until we know we can fund it. I can be upfront if itâ&#x20AC;&#x2122;s going to work, because I donâ&#x20AC;&#x2122;t want to put a week of my time into a deal I canâ&#x20AC;&#x2122;t fund.

A borrower doesnâ&#x20AC;&#x2122;t want to pay FOR A LENDER TO Ă ND AN excuse not to do a deal.â&#x20AC;?

Keeping the broker in the loop

Brokers get paid by Interim within 24 hours of the deal settling, but Interim is keen to maintain a lasting relationships with brokers. â&#x20AC;&#x153;If the broker is a broker WHOgS DONE THE WORK THEYgLL CONSISTENTLY BE NOTIĂ ED every time and remunerated every time [the client goes directly to Interim],â&#x20AC;? Littleford says. â&#x20AC;&#x153;If itâ&#x20AC;&#x2122;s a careless broker, whoâ&#x20AC;&#x2122;s a one-time-only transaction guy, and we never hear from them, then the prospects of them being remunerated are a little slimmer.â&#x20AC;?

He is keen to point out that working with Interim is an â&#x20AC;&#x153;educational processâ&#x20AC;?; they want to help brokers diversify and take on more of the workload (and rewards) of successive deals over time.

DECEMBER 2014 | 23

FEATURE / SHORT-TERM LENDING

MPAMAGAZINE.COM.AU

PART 2 A MORE COMPLICATED RESTRUCTURING DEAL

From a real-life scenario submitted by Semper Capital, in which a broker was involved

AN $8M LOAN FOR A STRUGGLING FRUIT FARM A Queensland fruit farming business was placed in RECEIVERSHIP BY ITS BANK FOR FAILING TO REĂ NANCE AT the end of the loan term, having posted three YEARS OF DECLINING INCOME AND PROĂ TS 7HIS IS common given the pressure on banks to meet NEW CAPITAL ADEQUACY GUIDELINES Just prior to the GFC, the company had started to ramp up production by buying tracts of farming LAND WITH BANK GEARING 7HEN THE *)& HIT FOLLOWED BY Ă&#x20AC;OODS IN 4UEENSLAND WHICH WIPED OUT TRACTS OF LAND WITH THE EARLIEST PLANTINGS ,NCOME DROPPED and the increased cost of debt caused CATASTROPHIC EĂŠECTS ON CASH Ă&#x20AC;OW AND PROĂ TABILITY The appointment of a receiver resulted in monthly fees of $170,000, and as the receiver sought to recover debt from the sale of plant and equipment vital to the business, fruit was left UNHARVESTED AND CASH Ă&#x20AC;OW DIED AS CREDITORS GREW 7HE BUSINESS OWNERS FACED RUIN 5EĂ NANCING through the bank while in receivership was not possible, and the company needed to deleverage back to sensible levels of serviceability in order to BE BANKABLE AGAIN The application for $8m as a short-term loan TO CLEAR BANK DEBTS DID NOT PRESENT WELL INITIALLY ,T WAS RURAL A FARMING BUSINESS WITH DECLINING INCOME %UT A CLOSER LOOK AT THE HISTORY INCOME TRENDS AND REASONS FOR CASH Ă&#x20AC;OW PRESSURE (increase in debt and costly lead time to harvest), plus the existence of a number and variety of security assets, shone a brighter light on PROSPECTS +OWEVER A STRATEGIC AND STRUCTURED APPROACH WAS REQUIRED 7HE PROPERTIES COMPRISED

Semperâ&#x20AC;&#x2122;s business

SEPARATE TITLES LOCATED FROM NORTH OF %RISBANE TO %UNDABERG WITH A PREDOMINANCE OF LAND LAID with fruit plantings, as well as four residential PROPERTIES AND ONE COMMERCIAL PROPERTY 7HE TOTAL VALUE OF THE PROPERTIES WAS M We considered one of the parcels of land, which was not productive at the time, as eligible for RESIDENTIAL DEVELOPMENT )URTHER THE COMPANY HAD ALMOST IN CREDITORS As a short-term lender we look for 1) asset coverage, 2) capacity to repay or exit, and 3) proof OF THE BENEĂ T OF BORROWING :E DECIDED A STRATEGY to support development approval and subdivision of a parcel of land would help realise an exit WITHOUT THE NEED TO SELL PRODUCTIVE PROPERTY Our strategy was to work with a partner debtor Ă NANCE BUSINESS IN ORDER TO PROVIDE SUĂŞCIENT funds to retire the receiver but retain them in a standby administrator role in case the company faced pressure from other creditors during our LOAN TERM :E WOULD REPAY THE BANK CENTS IN the dollar and work with the client to prepare the unproductive parcel of land for development AND OR SALE The loan was structured as a six-month bridge, with interest for the period accumulated for the LOAN TERM TO REDUCE PRESSURE ON CASH Ă&#x20AC;OW AND allow the company to retire debts to existing CREDITORS )URTHER AN INVOICE DISCOUNTING FACILITY would help the company realise dependable CASH Ă&#x20AC;OWS 7HE EARLY RETIREMENT OF THE RECEIVER meant the company would keep its plant and EQUIPMENT WHICH WE COULD ALSO Ă NANCE IF NEED Continued on page p26

24 | DECEMBER 2014

Founders Andrew Way and Kieran Gill believe their type of business has been overshadowed by the more commonplace everyday short-term loans of $50,000 to h$ MUCH bigger space is the true commercial Ă NANCE STRUCTURE and bridging space which we play in; brokers donâ&#x20AC;&#x2122;t even touch that! Thereâ&#x20AC;&#x2122;s probably 20 brokers in the country that touch that, and thereâ&#x20AC;&#x2122;s hundreds of brokers that should or could, with just a BIT OF EDUCATION i

FEATURE / SHORT-TERM LENDING

PART 3 A COMPARISON OF SHORT-TERM LENDERS Restructuring scenario continued from p24

be) to enable operations to continue uninterrupted.

The rate was 2% per month for six months, or 12% for the loan term. This cost was similar to that expected by an equity partner (which was the client’s only alternative) but without the encumbrance of an equity partner hangover.

Once the loan was retired the company would continue without diluting its stakeholding, and with its productive assets intact.

In terms of meeting our conditions for lending: 1) the LVR was relatively low; 2) the sale of the land would allow for a majority retirement of debt down to a level of serviceability that would enable the company to seek BANK ÁNANCE AND THE COST of 12% plus fees was far lower than the cost of the receiver, who would have remained in situ for at least 12 months, and without loss of the capacity to operate.

WHO’S IN CHARGE?

WHY CHOOSE US FIRST?

SERVICES OFFERED

INTERIM FINANCE

Andrew Littleford, director and founder

Interim Finance is the leading provider of short-term loans nationwide. The COMPANY IS INCREASINGLY BROKERSg ÁRST choice based on: consistently providing best-in-market rates; providing a complete back-end support service in which brokers can elect to have the loan written and managed on their behalf at no cost, which guarantees the loan’s compliancy with NCCP legislation; and its reputation, corporate business model and corresponding credibility as a professional lender for over 20 years, in turn providing assurance and certainty.

Caveat loans, second mortgages, ÁRST MORTGAGES

QUANTUM FINANCE

John Broadway, director

$LTHOUGH SHORT TERM ÁNANCE CAN BE complex and is usually needed in a hurry, this need not stress the broker – at Quantum Credit we keep it simple.

Our information requirements are explicit and we don’t prevaricate on decisions – the time to ‘yes’ or ‘no’ is fast because we lend our own funds.

If preferred, the broker can simply ‘introduce’ the borrower and we’ll do the running directly – couldn’t be easier!

Commercial/ business/ investment loans only – always mortgage secured

SEMPER CAPITAL

Andrew Way, credit, investor relations, corporate strategy; Kieran Gill, credit, accounting, marketing and business development

For loans of $250,000–$10m we are ABLE TO OéER THE LOWEST RATE FOR RISK IN the short-term and bridging sector.

Caveat loans, second mortgages, ÁRST MORTGAGES

PRIME FINANCE

Merrick Malouf, The simple fact is that Prime Finance managing director has been around for 10 years.

Australia-wide there are not many lenders that can do what we do. Rates start at 1.6% per month and our fees are low. Why? Because we are the lender.

3RIME )INANCE IS VERY ÀEXIBLE WITH THE client and we try to accommodate the broker-client relationship.

Complicated deal turnaround times

Andrew Way insists that turnaround times are less important to customers in his SORT OF MARKET h7HIS ÁXATION that people have with turnaround times – yes, it exists in the $50,000 to $100,000 market ... Where people are looking to grab an opportunity, I can understand 24–48 hours, but at $7m people understand it’s going to take a little bit of time.”

26 | DECEMBER 2014

60-day loans for residential purposes; business loans,. commercial loans; house and land package loans

MPAMAGAZINE.COM.AU

TYPICAL CLIENT

STANDARD RATES FOR LOANS

TURNAROUND TIMES

CAPS ON LOAN AMOUNTS

AVERAGE LOAN SIZE

SMEs are a core market for Interim Financeâ&#x20AC;&#x2122;s short-term loans and represent a high-growth sector internationally and domestically. Suitable loan purposes INCLUDE WORKING CAPITAL BRIDGING Ă NANCE business expenses, creditor payments, ATO/BAS assistance, joint ventures, business investment and expansion, commercial and residential construction Ă NANCING AND REĂ NANCING

â&#x20AC;˘ Rates remain consistent regardless of loan term â&#x20AC;˘ First mortgages from 11.95% â&#x20AC;˘ Caveats/second mortgages 17.95%

3â&#x20AC;&#x201C;10 business days

No loan cap

Typical examples: â&#x20AC;˘ Property development completion: $260,000 â&#x20AC;˘ Providing working capital to facilitate business growth: $505,000 â&#x20AC;˘ ATO payment liabilities alleviated: $1,836,000

Any business borrower with an urgent but temporary funding need is a prospective customer for Quantum Credit.

Our common loan scenarios cluster into Ă VE BROAD CATEGORIES PROPERTY development and construction; equity release in owned and geared property; protection of reputation by settling with creditors; special business opportunities; AND Ă NALLY SITUATIONS WHERE A BRIDGE TO bank funding is required.

Short-term lending does not generally come with â&#x20AC;&#x2DC;standardâ&#x20AC;&#x2122; rates because every loan is priced for risk. As a generalisation: â&#x20AC;˘ First mortgage secured loans â&#x20AC;&#x201C; interest from 1% per month plus establishment fees â&#x20AC;˘ Second mortgage secured loans â&#x20AC;&#x201C; from 2% per month plus establishment fees

Loan applications can be processed and a credit decision provided â&#x20AC;&#x2DC;in principleâ&#x20AC;&#x2122; within 24 hours. However, every short-term business loan scenario is unique and requires a customised solution

First mortgage secured â&#x20AC;&#x201C; $10m; second mortgage secured â&#x20AC;&#x201C; $500k

First mortgage secured â&#x20AC;&#x201C; $ 1.5m; second mortgage secured â&#x20AC;&#x201C; $300k

Clients needing to: â&#x20AC;˘ Deleverage â&#x20AC;&#x201C; sell down assets to reduce debt before returning to a bank â&#x20AC;˘ Unbundle â&#x20AC;&#x201C; exit a bank that has equity locked up in cross-collateralised loans â&#x20AC;˘ Restructure â&#x20AC;&#x201C; clients whose bank funding or amortisation models are CRIPPLING CASH Ă&#x20AC;OW â&#x20AC;˘ Classic bridge â&#x20AC;&#x201C; clients caught in a sell and purchase chain and seeking to conclude a purchase before a sale

From 8.5% per annum FOR Ă RST MORTGAGE AND from 12% per annum for second mortgage, depending on risk

Time is never an issue for us. We are always waiting for others at settlement

Anything over $10m needs SPECIĂ C consideration

$2m

Typical client is a self-employed owner of a business with a wage of around $90,000 to $250,000 a year and a tax debt. Also typical is the small builder who need funds for project completion or purchasing stock.

â&#x20AC;˘ 60-day loan term: 2% per month â&#x20AC;˘ Business loans: 1.6% per month for one to 24 months â&#x20AC;˘ Commercial loans: 1.6% per month for one to 24 months â&#x20AC;˘ House and land package loans: 1.6% per month for one to 12 months

â&#x20AC;˘ Two to three â&#x20AC;˘ Maximum loan DAYS FOR A Ă RST AMOUNT FOR Ă RST mortgage mortgage is $2m â&#x20AC;˘ 7HREE TO Ă VE DAYS â&#x20AC;˘ Maximum for a second for second mortgage mortgage is $1m â&#x20AC;˘ 7HREE TO Ă VE DAYS â&#x20AC;˘ Maximum for a for a caveat loan caveat loan is $500,000

$450,000

DECEMBER 2014 | 27

SPECIAL REPORT / MPA TOP 100

REDEFINING EXTRAORDINARY Forget what you thought was possible in broking: this year’s Top 100 have hit numbers that have never been seen before. It’s time to unveil the mortgage brokers at the forefront of the industry

28 | DECEMBER 2014

MPAMAGAZINE.COM.AU

O

ver most of its 10-year existence, MPAâ&#x20AC;&#x2122;s Top 100 has reďŹ&#x201A;ected the gentle ďŹ&#x201A;ourishing of the broker channel.

This year, on the other hand, has been more like an explosion: weâ&#x20AC;&#x2122;ve seen a jump in numbers that has made all other years simply pale in comparison, including pre-GFC days.

The Top 100 brokers of 2014 are extraordinary at every level.

Ranked purely on the total value of residential loans in the 2013/14 ďŹ nancial year, veriďŹ ed by aggregators, the average individual total has jumped to just shy of the $100m mark.

Indeed the new elite broker club is now at the $200m mark, a ďŹ gure no broker in our list had ever achieved for purely residential business until this year. And at the top of the list, 2014â&#x20AC;&#x2122;s number one broker accomplished a settlement total of $247m, MPAâ&#x20AC;&#x2122;s highest-ever total by more than $70m.

Packed with data and infographics, MPAâ&#x20AC;&#x2122;s Top 100 list has always provided valuable insights into our industryâ&#x20AC;&#x2122;s elite, but this year weâ&#x20AC;&#x2122;ve made it even better. On pages 7 and 8 youâ&#x20AC;&#x2122;ll ďŹ nd a special double-page spread devoted to the Top 100â&#x20AC;&#x2122;s Top 10, with features on staff numbers, advertising and broking excellence, followed by their individual proďŹ les.

Read on to ďŹ nd the story of a truly extraordinary year, one which reďŹ&#x201A;ects an industry and a profession that refuse to be limited.

A MESSAGE FROM OUR SPONSOR Westpac is proud to return as the sponsor for the 2014 MPA Top 100 Brokers list. As Australiaâ&#x20AC;&#x2122;s First Bank weâ&#x20AC;&#x2122;ve been around for 197 years, but weâ&#x20AC;&#x2122;ve always had a simple philosophy - if itâ&#x20AC;&#x2122;s worth backing, weâ&#x20AC;&#x2122;ll back it, and the ongoing recognition of professional brokers at the front line is essential to the industryâ&#x20AC;&#x2122;s continued evolution.

By highlighting the industryâ&#x20AC;&#x2122;s top performers, we set a benchmark of excellence that can be celebrated, respected, and emulated by brokers.

Australiaâ&#x20AC;&#x2122;s leading brokers are vying for a coveted Top 10 place, and with a larger volume of settlements recorded this year than ever before, the listing is hotly contested, with record-breaking results.

Over the last 12 months brokers have harnessed the power of a healthy property market - the number one settlement total this year of $247m represents an uplift of 51% when compared to last yearâ&#x20AC;&#x2122;s highest settlement total of $163m. The average settlement total for a Top 100 broker has also increased by 32%, jumping from an average of $75m last year to an average of $99m this year. $LL BROKERS THAT HAVE Ă NISHED IN THE 7OP IN HAVE achieved settlement totals of more than $200m, capitalising on a low interest rate period and record auction clearance rates in Melbourne and Sydney. Furthermore, brokers in NSW occupy nine of the Top 10 places in this yearâ&#x20AC;&#x2122;s listing, clearly leveraging exciting local market conditions.

Now more than ever, Australian consumers are looking for the right broker to suit their needs. Finishing within the MPA Top 100 Brokers list is an invaluable accolade for brokers, to reinforce their position as leading retail mortgage brokers to customers.

As independent advisers in todayâ&#x20AC;&#x2122;s economy, these successful BROKERS WILL CONTINUE TO FOSTER GROWTH IN CUSTOMER CONĂ DENCE PROVIDING ADVICE AND SUPPORT TO FULĂ L THE DREAMS AND ASPIRATIONS of their customers.

On behalf of Westpac, I would like to congratulate the brokers who have made this yearâ&#x20AC;&#x2122;s MPA Top 100 Brokers list, and for stretching yourselves to achieve no THE MORTGAGE AND Ă NANCE INDUSTRY

FAST FACTS

$62,705,142 was the number to beat if you wanted to be in this yearâ&#x20AC;&#x2122;s MPA Top 100

268

the number of loans written by the average Top 100 broker in 2013/14

Tony Macrae Tony MacRae general manager, Westpac broker distribution

DECEMBER 2014 | 29

SPECIAL REPORT / MPA TOP 100

MPA TOP 100 (100–75) Rank

State

Total value of loans FY 2013/14

Total number of loans

100

Matthew Kerr

Name Hudson Institute

Company

QLD

$62,705,142

177

99

Neil Massingham

Shirt First Mortgages

NSW

$63,725,152

181

98

Daniel Lanna

Centric Lending Services

NSW

$63,940,906

210 198

97

John Lucci

Loan Market Ascot Vale Vic

VIC

$63,950,353

96

Simon Orbell

Smartmove

NSW

$64,277,276

181

95

Trevor Shand

Loan Market Bendigo Vic

VIC

$64,564,005

485

94

Neil Christie

Aussie Oxenford

QLD

$65,276,185

173

93

Leon Spadavecchia

$ÁRM )INANCIAL

SA

$65,408,281

224

92

Richard Hoenig

Arleon Capital

NSW

$65,435,500

99

91

Navjeet Matta

Gain Home Loans

NSW

$65,809,080

563

90

Nicholas Don

Odyssey Financial

VIC

$65,861,000

270

89

Adrian Lee

Resource Financial Group

NSW

$66,209,400

107

88

Brett Dickie

Oxygen Home Loans

NSW

$66,501,788

108 198

87

Paul Prindiville

Blackburne Money

WA

$66,594,000

86

Quentin Grofski

Aussie Morley

WA

$66,988,385

178

85

Scott Cameron

Home Loans

ACT

$67,274,077

255

84

Troy Cameron

Statique Finance

WA

$67,871,748

183

83

Eugene Sholomov

0INÁN $USTRALIA

VIC

$67,874,000

95

82

Ian Simpson

Smartline

NSW

$68,000,000

152 148

81

Mardee Thomas

1st Street

NSW

$68,000,000

80

0AX ,VANOé

Mortgage Fair

VIC

$68,000,103

127

79

Rodney Holt

Oscar Investments WA

WA

$68,045,064

228

78

Cameron Wiles

Smartmove

NSW

$68,646,757

153

77

Trevor Ryan

Aussie Mobile Qld

QLD

$69,013,836

214

76

Daniel Hustwaite

Aqua Financial Services

VIC

$69,206,447

235

75

Alex Nochar

Shore Financial

NSW

$69,361,107

86

74

Joshua Egan

Astute Melbourne City Central

VIC

$69,768,898

250

73

Hank Hong

Home Loan Experts

NSW

$71,232,000

155

72

Chris Bibby

Accurate Financial

VIC

$73,716,252

220 176

71

James Wang

Credit Asset Management

NSW

$74,225,259

70

Jia Sheng Zhu

Janz Financial

VIC

$74,950,851

116

69

Andrew Algie

Addisons Advisory Group

NSW

$75,472,941

150

68

Abel Cabrera

Aussie Home Loans

VIC

$76,000,000

76

67

James Henwood-White

eSelect Finance

VIC

$77,431,264

212

66

Grant Renshaw

Advantage Finance

SA

$77,862,273

393

65

Daniel Esposito

Loan Market Manningham Vic

VIC

$78,110,011

341

64

Mark Nguyen

IFG Home Loans

WA

$78,275,000

217

63

Jason Zhao

LMW Finance

NSW

$78,958,666

179

62

James Hasselle

Mortgage Choice

QLD

$79,059,632

295

61

Serge Scekic

Aussie Balgowlah

NSW

$79,104,064

154

60

Adam Bourke

Mortgage Choice

QLD

$79,197,781

262

59

Tracey Imbuldeniya

Property Finance Online

WA

$79,976,357

221

58

Peter Goldberg

Pinnacle Capital

NSW

$80,348,883

182

57

Anthony Muir

Mortgage Choice

QLD

$80,435,637

295

56

Mark Polatkesen

Loan Gallery

VIC

$82,339,083

269 254

55

Bhavesh Shah

Loan Gallery

VIC

$82,775,942

54

Leteisha Pileggi

Mortgage Choice

WA

$84,061,241

255

53

Peter Gwynne

Financing Property

QLD

$84,304,851

292

52

David Pearse

Astute East Brisbane

QLD

$84,658,499

249

51

Darren Comerford

Mortgage Choice

QLD

$85,706,483

340

30 | DECEMBER 2014

MPAMAGAZINE.COM.AU

FAST FACTS

THE YEAR TO BEAT ALL YEARS The Top 100 (combined value) and this year’s No. 1 broker have both achieved record total settlements

$10

$9,907,057,066 $247,200,000

8

$250

200

Volume 26,846 loans written by the Top 100 this year – a 25% rise

$7,545,399,030

$163,400,000

Loan size

$163,800,000 $5,849,249,041

6

150

$5,862,456,137

$415,512 was the average loan size – a rise of 18%

$123,600,000

4

$3,956,532,757

100

$85,900,000

Top 100 combined value of loans ($) Top broker total value of loans ($)

2

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

50

33

Brokers in this year’s Top 100 settled more than $100m in business over the past financial year

DECEMBER 2014 | 31

SPECIAL REPORT / MPA TOP 100

MPA TOP 100 (100–75) Rank

State

Total value of loans FY 2013/14

50

George Samios

Name My Address Finance

Company

QLD

$85,960,228

Total number of loans 173

49

0ATT &UNLIéE

Mortgage Choice

QLD

$86,000,000

262

48

Andrew Kelly

Astute Finance Consulting

NSW

$86,050,873

194

47

Brett Amos

7 Point Finance

VIC

$87,000,000

273

46

Jason Basseal

Loan Market Earlwood NSW

NSW

$90,037,132

281

45

Glenn English

Aussie Carnegie

VIC

$92,758,032

250 244

44

Scott Partridge

Mortgage Choice

NSW

$93,583,386

43

David Friend

7IéEN &O

ACT

$95,000,000

313

42

Rogan Yates

Yellow Brick Road

NSW

$95,100,000

132 338

41

Daniel O'Brien

PFS Financial Services

NSW

$95,148,062

40

Joshua Bartlett

Loan Market Cheltenham Vic

VIC

$95,858,562

559

39

Scott Marshall

The Loan Arranger

SA

$95,910,035

463 382

38

Andrew Heath

Mortgage Choice

NSW

$96,905,765

37

Jack Wei

Financial Genius

NSW

$97,000,000

176

36

Addison Tay

Ausin Group Finance

VIC

$97,609,858

207

35

Ross Le Quesne

Aussie Parramatta

NSW

$98,003,030

362

34

Kelly Cameron Tull

Get Real Finance

QLD

$98,680,472

423

33

Deslie Taylor

Mortgage Choice

QLD

$100,081,700

291

32

Barnabas Chan

Unite Financial Group

NSW

$100,297,340

162 202

31

Alex Lambros

Home Loans

NSW

$101,142,887

30

Warren Dworcan

Rate Detective

WA

$101,589,917

201

29

Anthony Alabakov

My Mortgage Freedom

VIC

$102,463,000

243

28

Katrina Rowlands

Mortgage Success

NSW

$103,094,470

289

27

Todd McVee

Smartline

WA

$103,922,683

485

26

Veki Brdjanin

Uniq Finance Australia

VIC

$105,700,000

203

25

Theo Chambers

Shore Financial

NSW

$107,431,748

123

24

Vivian Wei Wang

V Money

VIC

$107,516,582

227

23

Colin Mason

Mortgage Choice

QLD

$109,545,359

425

22

Wendy Higgins

Mortgage Choice

SA

$111,355,477

418

21

*ERARD 7IéEN

7IéEN &O

ACT

$113,000,000

313

20

John Dornom

Connect Finance

VIC

$114,500,000

217

19

Hany El'Sadre

Amani Finance

WA

$115,667,659

340

18

Kevin Gomer

Nicheliving Wealth and Finance

WA

$116,540,778

344

17

Paul McCombe

McCombe Finance

VIC

$127,000,000

172

16

Kevin Agent

7HE $USTRALIAN /ENDING ,NVESTMENT &ENTRE

VIC

$127,792,332

471

15

-AMES &HATÁELD

&HATÁELD &ONSULTING

WA

$131,000,000

295

14

Nixon Alex

Newera Finance P/L

NSW

$141,500,000

300

13

Grant Lai

6YDNEY 3ROPERTY )INANCE 6ERVICES

NSW

$143,219,341

360

12

Colin Lamb

Mortgage Solutions

WA

$144,000,000

290

11

Rael Bricker

+OUSE +OME /OANS

WA

$147,000,000

478

“You have to be a successful broker first and then become a successful businessman”

“Honour your promises and do not ever promise clients something you can’t deliver”

“This year more than ever before we have reinvested profits back into the business”

(Raymond Xue)

(Louis Kovanis)

(Jeremy Fisher)

32 | DECEMBER 2014

MPAMAGAZINE.COM.AU

FAST FACTS

WOMEN IN THE SPOTLIGHT There were nine female brokers in the Top 100 this year, with Kellie Lam placing within the Top 10.

That’s slightly fewer than in 2013, when 16 women made the list.

MPA TOP 100 (100–75) Rank

Name

Company

10

Yip (Kellie) Lam

Abacus Home Loans

22

Wendy Higgins

Mortgage Choice

State

Total value of loans FY 2013/14

Total number of loans

NSW

$157,000,000

403

SA

$111,355,477

418

24

Vivian Wei Wang

V Money

VIC

$107,516,582

227

28

Katrina Rowlands

Mortgage Success

NSW

$103,094,470

289

33

Deslie Taylor

Mortgage Choice

QLD

$100,081,700

291

34

Kelly Cameron Tull

Get Real Finance

QLD

$98,680,472

423 255

54

Leteisha Pileggi

Mortgage Choice

WA

$84,061,241

59

Tracey Imbuldeniya

Property Finance Online

WA

$79,976,357

221

81

Mardee Thomas

1st Street

NSW

$68,000,000

148

STATE BY STATE

Unsurprisingly, NSW has the highest number of brokers in the Top 100: 40 this year – a rise of 7 on last year’s share. But to see the shift in power away from mining and towards housing, you need to look at the share of the Top 10: NSW had 9/10 brokers in 2014, compared to 4/10 last year.

41

Biggest rise Theo Chambers, director of Shore Financial, rose a stunning 41 places this year, from 66 to 25. Chambers co-founded Shore Financial with Alex Nochar (No. 75 in the Top 100)

$1,315,198 0

Biggest annual loan size

14 14 4 40 3 25

Louis Kovanis’ average loan size is a formidable $1,315,198, over 133 loans. Kovanis operates on a maxim of ‘work smarter, not harder’ and focuses on medical professionals

DECEMBER 2014 | 33

SPECIAL REPORT / MPA TOP 100

TOP 10

ADVERTISING

THE SECRETS OF

7/10 brokers advertise

SUCCESS FOREIGN CLIENTS

Foreign language newspapers With high deposits and a taste for high-end properties, foreign clients contributed disproportionately to many brokers’ settlement totals

,T CAN BE DIê CULT TO CROSS SELL TO FOREIGN clients, despite most of these brokers placing considerable importance on holistic service

Sponsored Google links Social networks (including WeChat)

WHAT’S THE DIFFERENCE BETWEEN A GOOD BROKER AND A GREAT BROKER? INNOVATION “Great brokers can adapt to a changing market and changing client needs, and therefore you must be a ‘change agent’ and change with the times, as it waits for no one” (Louis Kovanis)

34 | DECEMBER 2014

DIVERSIFICATION “A good broker is there to service a client’s mortgage needs well, while a great broker is there to provide a holistic approach to look after clients, that being diversifying the business into other areas such as helping clients get protected and/or manage their taxation or superannuation strategy such as SMSF” (Ren Wong)

CUSTOMER SERVICE “A great broker will make the process seem very simple for every client. Clients like all interactions and formalities to be easy, and the better the broker, the easier it will feel for the client” (Jeremy Fisher)

TECHNICAL ABILITY “Anyone can just ‘sell’ a home loan. A great broker is able to not just arrange the loan but ensure that the structure of the loan is the right one for their client. The correct loan structure can save the client a lot more money than a cheaper interest rate by itself” (Justin Doobov)

MPAMAGAZINE.COM.AU

ARE SUPPORT STAFF CRITICAL?

10

1O OF SUPPORT STAé

Kellie Lam Abacus Home Loans Sydney, NSW $157,000,000

What, if anything, have you changed this year which may have contributed to your high settlements total?

Self-improvement is the key to our success, together with the restructuring of company training programs, and undoubtedly the opening of our Melbourne office has been the driving force behind our improved position. The key contributing factors have been: listening to our customers, listening to our employees, listening to our partners, and listening to our competitors.

*Q RFCPC ? AML¾ GAR @CRUCCL PSLLGLE ? QSAACQQDSJ @SQGLCQQ ?LB being a successful broker?

Top 10 position

CHALLENGES FOR THE INDUSTRY

We see no conflict between operating a successful business and being a successful broker. The success of one business complements the other, and competition between the two contributes to the overall success of the business. Our business plan is aligned to our long- and short-term objectives equally to a dream of running a successful and well-respected broker network.

How important are foreign investors to your settlements total?

“I am confident I can adapt to any changes, but I hope there are no knee-jerk reactions by regulatory bodies” (Justin Doobov) “As long-term mortgage brokers we are clearly very concerned about the issue of housing affordability and how it is going to affect the mortgage market over time” (Kellie Lam) “Commission payments and banks’ margins will change a lot, which will create competition and banks not knowing how to operate correctly in the investment space” (Mark Davis)

It is no secret that, predominantly, Abacus intended to service the needs of the Asian community, and although a large portion of our business and commitment remains focused on this segment of the market, we have in recent times diversified our approach and business model to service a broader section of the community.

What are the biggest challenges for the mortgage industry over the next 12 months?

It is no secret that the biggest concern confronting the mortgage industry for some time has been over-regulation, resulting in huge compliance and regulatory costs. The other and most pressing concerns for the industry are that the race for market share is increasing credit risk, and low interest rates are increasing household leverage too quickly, with property prices in real danger of overheating.

Demand is overstripping supply and forcing prices out of reach of first home buyers.

As long-term mortgage brokers we are clearly very concerned about the issue of housing affordability and how it is going to affect the mortgage market over time.

DECEMBER 2014 | 35

JOINT SPECIAL REPORT / MPA TOP 100

9

Donald Tang Alliance Mortgage Solutions Sydney, NSW $162,000,000

8

Louis Kovanis Genius Loan Solutions Sydney, NSW $174,921,276

What, if anything, have you changed this year that may have contributed to your high settlements total?

8F?R GD ?LWRFGLE F?TC WMS AF?LECB RFGQ WC?P UFGAF K?W F?TC contributed to your high settlements total?

One big life change that I have for this year is that I married a wonderful woman who has helped me a lot in terms of taking care of every personal aspect of our life. The mutually supportive and understanding relationship has allowed me to devote more efforts to work. Most importantly, she is always encouraging and stands by my side when I face difďŹ culties in work and in life.

During the past 12 months the Sydney property market has had tremendous growth, and the volume of loans correspondingly increased, particularly in the investor market ... To cater for the increased volume my company has hired additional resources to meet the challenges of the volume of business. Client referrals and networking: existing clients have referred to me more business over the past 12 months. I have been regularly contacting more existing clients, and, given that, they were happy with my service and provided to me a consistent ďŹ&#x201A;ow of referrals.

*Q RFCPC ? AMLž GAR @CRUCCL PSLLGLE ? QSAACQQDSJ @SQGLCQQ ?LB being a successful broker?

First of all, I have my own way of client management, and I found it very effective in helping me become a successful broker. When I became a successful broker, I started to evaluate my management system and have tried to use this system on my business through our in-house training program. Therefore, I think in the mortgage broking industry you have to be a successful broker ďŹ rst and then become a successful businessman.

)MU GKNMPR?LR ?PC DMPCGEL GLTCQRMPQ RM WMSP QCRRJCKCLRQ RMR?J About 50% of my total settlements come from foreign investors.

They are mostly referred to me by our companyâ&#x20AC;&#x2122;s overseas partners.

Foreign investors have played a signiďŹ cant role in my settlement total in 2013/14.

What are the biggest challenges for the mortgage industry over the next 12 months?

The biggest challenge and uncertainty is the possibility of the Australian government changing policies and regulations with respect to foreign investment.

36 | DECEMBER 2014

)MU GKNMPR?LR ?PC DMPCGEL GLTCQRMPQ RM WMSP QCRRJCKCLRQ RMR?J Zero â&#x20AC;&#x201C; my business is 100% sourced domestically and not overseas.

What are the biggest challenges for the mortgage industry over the next 12 months?

I believe that the major players should be careful to not overregulate our industry and cause additional costs to be incurred in running a small mortgage broking business. I am not against having a prudent standard of lending in Australia, but we should have a sense of balance, and not overreact. [Another potential problem is] government authorities such as APRA and RBA introducing tighter credit controls to stem the ďŹ&#x201A;ow of credit growth and artiďŹ cially containing the housing market in Australia. [Finally,] if the economic situation both domestically and overseas deteriorates, then this will have an adverse effect on consumer sentiment and a ďŹ&#x201A;ow-on effect on the housing market and the mortgage broking industry.

MPAMAGAZINE.COM.AU

7

Ren Wong N1 Finance Sydney, NSW $188,000,000

6

Eric Cui Alliance Mortgage Solutions Sydney, NSW $191,000,000

What, if anything, have you changed this year which may have contributed to your high settlements total?

What, if anything, have you changed this year which may have contributed to your high settlements total?

In the past, my marketing has been very generic. But I have changed my focus to younger generations who are at the age of buying a home or investments. That works better for me as we are similar in age and overall it does improve productivity because we communicate with each other using the same tools, such as messaging apps and SMS. That has also indirectly improved my market coverage in a more cost-effective way.

This year our firm has expanded its operations and employed more support officers, leading to better teamwork performance.

Our company also focuses on developing more efficient working procedures and management systems, which has significantly increased my efficiency. We devoted resources to building a postsettlement service team, which has helped us maintain long-term relationships with our clients. Finally, the newly established referral program has also contributed to my high settlements total.

*Q RFCPC ? AML¾ GAR @CRUCCL PSLLGLE ? QSAACQQDSJ @SQGLCQQ ?LB being a successful broker?

In the beginning there wasn’t. But after reaching a certain volume a difference did become apparent. Being a successful broker requires knowledge, compliance and productivity, while running a successful business is more about helping the team grow their careers.

How important are foreign clients to your settlements total?

Foreign clients, although not significant in settlements total, do represent a significant growth rate. The challenge, however, is more to do with compliance and cross-selling. A foreign client takes more time to service and it is more difficult to offer other services such as protection and credit cards.

What are the biggest challenges for the mortgage industry over the next 12 months?

The major challenge would probably be striking the balance between tightening certain policies to cool the overheating real estate market, while not hurting the stillneeded investment activity that keeps the market alive. The other challenges include resolving the long-time channel conflict, especially via branch networks, and also improving brokers’ reputation.

*Q RFCPC ? AML¾ GAR @CRUCCL PSLLGLE ? QSAACQQDSJ @SQGLCQQ ?LB being a successful broker?

Maintaining the balance is a challenging task. However, after a while I realised that running a successful brokerage was more about nurturing other successful brokers. As a mentor, I need to be a successful broker so that I can share my expertise and knowledge with my colleagues. From the director perspective, running a successful business helps me to have a team of successful brokers. Therefore I see no conflict but a careful allocation of time and planning.

How important are foreign investors to your settlements total?

Foreign clients account for 30%–35% of my total portfolio. The majority of these foreign investors are wealthy clients who possess more than one property in Australia. Most of these investors come from referral programs, as well as the seminars and workshops that we have held overseas.

What are the biggest challenges for the mortgage industry over the next 12 months?

The biggest challenge is increasing competition in the industry ... Therefore it is crucial that existing brokerages need to be more professional and to devote more resources to customer relationship maintenance.

DECEMBER 2014 | 37

SPECIAL REPORT / MPA TOP 100

5

Jeremy Fisher 1st Street Home Loans Sydney, NSW $218,000,000

4

William Chen 3ACIÁ C 0ORTGAGE &ENTRE Sydney, NSW $220,359,573

What, if anything, have you changed this year which may have contributed to your high settlements total?

What, if anything, have you changed this year which may have contributed to your high settlements total?

This year more than ever before we have reinvested profits back into the business, creating a better experience overall for clients.

We have always known that our existing client base is valuable, as much of our business is referral based, and we feel that our clients deserve a premium service that continues to improve.

Loan writers’ support, and performance recognition and appreciation.

*Q RFCPC ? AML¾ GAR @CRUCCL PSLLGLE ? QSAACQQDSJ @SQGLCQQ ?LB being a successful broker?

Being a broker and running a business are two different tasks, but I feel that they complement each other rather than being in conflict. As an owner and broker, I get to see both sides, and for me they go hand in hand. I enjoy working in the business with staff and clients, and also working on the business, implementing our strategies and plans.

How important are foreign clients to your settlements total?

Foreign clients make up only a small percentage of our business currently, but it is a growing market. As most of our foreign clients are purchasing higher-value properties, if this section of our market grows it could have a more significant impact on our settlements.

What are the biggest challenges for the mortgage industry over the next 12 months?

There has been a lot of heat in the property market, and this should continue through the next 12 months. The mortgage industry needs to continue to manage this growth. Brokers and banks rely on each other, so it is important for brokers to have good systems and time management to keep their side flowing smoothly.

38 | DECEMBER 2014

*Q RFCPC ? AML¾ GAR @CRUCCL PSLLGLE ? QSAACQQDSJ @SQGLCQQ ?LB being a successful broker?

Yes. Being a successful broker is not necessarily the same as running a successful business. They are two completely different issues.

How important are foreign clients to your settlements total?

Foreign clients do contribute significantly to the settlement volumes, as they have high disposable income and immense savings.

What are the biggest challenges for the mortgage industry over the next 12 months?

The heat will start to cool, and the biggest challenge to investors is whether their valuations will prove to be realistic.

8F?ReQ RFC BGç CPCLAC @CRUCCL ? EMMB @PMICP ?LB ? great broker?

A good broker follows all the guidelines of disclosure to processing loans until settlement. A great broker recognises the importance of the relationship with a customer/network, over and above a good broker.

MPAMAGAZINE.COM.AU

Mark Davis

3

The Australian Lending & Investment Centre Melbourne, Vic $234,576,000

2

Justin Doobov Intelligent Finance Sydney, NSW $235,516,410

What, if anything, have you changed this year which may have contributed to your high settlements total?

What, if anything, have you changed this year which may have contributed to your high settlements total?

This year we have worked a lot around capturing clients at a far greater level, as well as being far more proactive, with constant contact with them. Overall, our service level has been far better over the last 12 months.

Our business has traditionally been very client focused and customer service based, with almost all new business coming from existing clients and their referrals. This year we have stripped away inefficiencies from the processing and administration side of things, which has given us the opportunity to be even more client touching. The result has been an even larger number of referrals from our clients, and more repeat business.

*Q RFCPC ? AML¾ GAR @CRUCCL PSLLGLE ? QSAACQQDSJ @SQGLCQQ ?LB being a successful broker?

Yes, I believe there is. A successful business could mean you earn more revenue; earning more revenue does not mean you run a better brokering business. Again, it is the specialisation that I believe strongly in, and ensuring your business is not operating like a one-stop-shop model; and that is what I believe success is.

How important are foreign clients to your settlements total?

Moderately; we service all clients but our focus is mainly within Australia.

*Q RFCPC ? AML¾ GAR @CRUCCL PSLLGLE ? QSAACQQDSJ @SQGLCQQ ?LB being a successful broker?

It’s important to divide your time as a broker to meet your clients’ needs as well as the company’s. In this past year, I’ve had the opportunity to give my team more autonomy, which has freed up my time and allowed me to achieve the balance between successfully servicing our clients and the business itself.

How important are foreign clients to your settlements total?

What are the biggest challenges for the mortgage industry over the next 12 months?

Commission payments and banks’ margins will change a lot, which will create competition and banks not knowing how to operate correctly in the investment space.

8F?ReQ RFC BGç CPCLAC between a good broker and a great broker?

t h a t i s

One who lives, breathes and is passionate for the industry. Isn’t like every industry and how greatness achieved?

All clients, be they foreign or local, are important to my monthly settlements. I don’t just focus on one particular market, and I think this has helped me be more resilient and flexible as the market has changed over the years.

What are the biggest challenges for the mortgage industry over the next 12 months?

This past 12 months has seen incredible growth in the housing market. The biggest challenge to the mortgage industry will come if the RBA and other government bodies begin changing the regulation to slow the market down. I am confident I can adapt to any changes, but I hope there are no knee-jerk reactions by regulatory bodies.

DECEMBER 2014 | 39

SPECIAL REPORT / MPA TOP 100

1 Raymond Xue ACA Mortgage Solution Sydney, NSW $247,205,639 The walls of Raymond Xue’s office tell a story in themselves. They’re adorned with the usual trophies, mementos from a 12-year rise through broking, and, more surprisingly, a variety of peculiarly coloured ornamental cats. These cats, maneki-neko, are a Japanese-Chinese good-luck charm, and judging by Xue’s numbers this year, they seem to be working.

Xue himself attributes this year’s numbers, the highest ever in MPA’s Top 100, to much more conventional means.

Xue, or rather his wife, Canna Cao, runs an extremely tight ship, particularly in the way ACA Mortgage Solution processes loans. Previously, different staff members were assigned to each stage of the process.

“Now each staff member handles a single file from the start to the end … they contact the client, collect the document, and submit the loan,” Xue says. Moving to this system, first suggested by CBA’s Kaizen program, required extensive retraining,

40 | DECEMBER 2014

or as Xue puts it: “a transition period … which is why last year my volume went down” (albeit only to 7th place).

That said, nearly doubling one’s volume can’t be explained by paperwork alone.

Where other brokers discuss the Sydney foreign property investment wave in hushed tones, Xue has actually harnessed it, with stunning results. ACA Mortgage Solution advertises in Chinese-language newspapers and magazines, in addition to working with real estate agents: “Some people walking around Chinatown, they go into a real estate agent and buy the property on the spot – and get referred to us.”

Yet of all Xue’s lead generation methods, his favourite is simple to use, available to everyone, and doesn’t cost a cent. The Chinese social network WeChat, reported by Xinhua last year to have 600 million users worldwide, allows Xue and his staff to leave voice and text messages for clients, which helps with

the time difference, Xue explains. “In that way we shorten the distance; it’s very handy,” he says. “Social media is a trend; it’s very powerful … many people all around the world can see it at the same time. And WeChat is free!”

Lying behind it all, nevertheless, is hard work, extremely hard work, and it’s impacting on Xue and his wife’s health, he readily admits. Indeed, a recent AFG conference in Barcelona proved the unlikely setting for a moment of self-realisation: Xue is worried about ‘burning out’.

“I’m going to slow down,” he tells me.

“Spend more time with family, studying, doing exercise.” He’ll work on growing the burgeoning network of brokers under ACA’s brand, but his focus will turn to studying theology. It’s a field of study that is well suited to Xue’s new temperament: “Now I’ve reached the top, I’m not interested in number one or number two.

This is it.”

MPAMAGAZINE.COM.AU

DECEMBER 2014 | 41

PROFILE / KIRAN THAPA

Dr Kiran Thapa, 3H' ')6 )3 0(NG6C %( IS A BROKER WITH A DIĂŠ ERENCE COMING FROM AN ENGINEERING BACKGROUND IN 1EPAL AND STUDYING Ă NANCE at UTS, heâ&#x20AC;&#x2122;s now taking the skills he learnt to the world of broking

42 | DECEMBER 2014

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How many brokers have written a book? Or have a PhD? Of course, many would say that such qualifications have little to do with day-to-day broking. But Kiran Thapa, CEO of CAPKON Investments, shows that a technical background is no bar to entering the profession, and that investing in education can pay dividends.

CAPKON Investments is based in Summer Hill, in Sydney’s Inner West. However Thapa spent his early years and professional life in a somewhat more exotic destination: Nepal. He comes from Nuwăkot, just 70km from Kathmandu but a gruelling three hour drive to the capital. He made the journey for university – earning a degree in engineering – before working as an engineer in remote parts of the country, writing a Nepali-language textbook on engineering in 2005. In fact Thapa only arrived in Australia in 2006, to do a Masters in Engineering at the University of Melbourne.

“I’m just going with the community sentiment and the development of the community” Nuwăkot to Melbourne is no small journey and in 2007 Thapa was still working as a traffic engineer and not interested in broking. The GFC changed all that, he recalls: “everyone was talking about finance, it was all over the TV, wherever you go doctors, engineers, all were talking about finance. It was then I realised, it doesn’t matter what field you are in, this is something that affects everyone, and I thought this is something I need knowledge of.” Thapa’s unorthodox reaction – which he describes as a moment of ‘self-realisation’, led him to Sydney’s UTS, doing a Finance PhD in the utility of social media forums for stock market investors (apparently they’re not very useful). Finally in 2011, after two years of deliberating, CAPKON settled its first loan.

Broking certainly doesn’t require a finance PhD, but Thapa is convinced the letters after his name are not wasted: “I think it is one of the

THAPA’S TIPS FOR DEALING WITH FOREIGN CLIENTS 1. UNDERSTAND THE CULTURE “The best thing is to understand their culture, their attitude to money. It’s not about investing in Australia because property prices are going through the roof, it doesn’t work that way. You should know back home what they think about property and what they think about their money and how far it will go.”

2. PROVIDE EXTRA SERVICES “We are dealing with overseas people, and they MIGHT BE WELL QUALIÁ ED TO GET A LOAN BUT MAY NOT BE ABLE TO Á ND A PROPERTY 5ATHER THAN SPENDING MY time on the home loan only, I go out with them to the property inspection; I sit and negotiate with the real estate agent, kind of like a buying agent, guiding them through the whole process. People who want to specialise in this need to put in this extra mileage.”

main attracting factors for people to come to my door. There are two things: one, even if I’m not near my laptop or computer, I can still calculate what your repayments are going to be like, what the banks are doing … and second I think it’s about integrity as well. [Clients think] ‘if this guy has to spend his life and his savings on education for 30 years he’s in it for the long run, he’s not going to get the money and run away’.”

Teaching undergraduates during his years in academia has also helped Thapa deal with confused clients.

CAPKON’s clients, Thapa tells me, are mainly Nepali immigrants. His engineering links help here; “in 2006 and 2007 we had a lot of engineers coming over to be permanent residents … other people came over to do their studies and now they are permanent residents.” In many ways these Nepali immigrants are ideal clients: “dual income, no kids, 20% savings” – and most of them, Thapa points out, speak excellent English because of their occupation.

Thapa’s strategy for CAPKON is closely tied to the Nepali community. While his qualifications might point him towards commercial broking, he doesn’t feel his clientele are ready: “We may have one or two cases of people trying to buy commercial property and needing loans, but in general more than 80% of

DECEMBER 2014 | 43

PROFILE / KIRAN THAPA

MPAMAGAZINE.COM.AU

my clients are still trying to find their first home … I’m just going with the community sentiment and the development of the community and from that I can see [commercial] could be the future, but not at this stage.”

Australia’s flourishing Nepali community is also taking Thapa far from the confines of Sydney. Indeed his second biggest client base is located in Darwin, and I talked to him on the way back from a barbeque-based seminar for potential clients in Dubbo. He dismisses the idea that migrants tend to stick to the big cities: “what has happened recently is because of permanent residency issues, people who have qualified based on their education and experience alone have to go to regional areas … they go out there, and once they are out there they want to buy a house, raise a family and stuff like that.” Thapa does however insist that trips must be worth his while: five or six potential clients in a distant location doesn’t interest him.

In Thapa’s view, CAPKON’s communitydriven approach is a success story “doing eight to nine million dollars a month, 23–24 loans a month, and considering we’ve got just one broker and I’ve never worked for anyone [in broking] before … this is a great achievement and I’m very happy”. Now he wants to combine the three threads which have so far defined his career: his Nepali links, his engineering experience and his academic education.

“In the next five years, since we have the background of engineering and working at local council, we’ll be definitely heading to more commercial finance,” Thapa explains. “I think that’s the right combination for my education, knowledge and skillset.” He’s still involved in engineering, in an infrastructure company called Fusion Technology Group, on the corporate and strategy side. The company employs 45 engineers, and uses some of its

“It’s about integrity as well.

[Clients think] ‘if this guy has to spend his life and his savings on education for 30 years he’s in it for the long run’ ” 44 | DECEMBER 2014

LEAD GENERATION AT CAPKON • Newspaper column Thapa has written a fortnightly money advice column in a local Nepalese-language newspaper for the last three years

• Facebook Regularly updating Capkon’s Facebook page, Thapa insists, helps keep the brokerage in the minds of its followers, resulting in referrals

• Community organisations Despite a stint in a local Nepali group, Thapa is sceptical of the business case for community involvement: “I don’t think it helps at all; as a businessman you need a smart marketing technique to get to your client”

revenue to buy investment properties, utilising Thapa’s broking expertise.

Secondly, Thapa wants to start another venture to help CAPKON retain clients. It is about collective investment, he loosely explains: “all my CAPKON clients will become automatic stakeholders, and I’ll be giving them part of trail commission in return for them buying a stake in a company. If they want to buy more, they can do that.” The funds he raises will be invested in infrastructure and commercial property. The key element is that if clients want to leave CAPKON for another brokerage, they have to sell their stake in Thapa’s collective investment vehicle. The plan’s just ‘in the pipeline’, according to Thapa, but he want to get it moving over the next five years.

Hearing Thapa’s story, one could get an impression of someone making up for lost time – time, some might cynically suggest, wasted in education. Then again, you could see Thapa’s experience and expertise outside of broking as directly benefitting him within broking, not least his curiosity: when he’s not taking his kids for long drives or attending community events he spends time reading the financial papers.

Perhaps it’s the desire to learn, rather than learning itself, which really makes Kiran Thapa a broker with a difference.

Loud & Proud Returning to Sydney’s Town Hall, 2014’s AMAs were a lively celebration of the industry’s elite, with plenty of highlights FCPC ?PC TCPW DCU NJ?ACQ WMSeJJ ¿ LB such a concentration of mortgage greats as the AMAs. Indeed the crowd at Sydney’s Town Hall included everyone from 30-year veterans to sharp-suited young guns, drawn from across Australia. With such a gathering, little prompting was needed to make this year’s ceremony a truly memorable evening.

An exciting year for brokers was reflected in a highly excitable crowd, a fitting counterpart to MC Michael Slater and musical acts The Diamonds and Boys in the Band. The three-course dinner,

accompanied by free-flowing wine, was another highlight. But the real stars, as ever, were this year’s winners, who beat a record number of nominees and a panel of expert judges to get their hands on a coveted crystal trophy.

Winning an AMA is among the industry’s greatest accolades, and we at MPA would like to congratulate this year’s winners on their achievements. But we’d also like to thank all the finalists, nominees, attendees and sponsors, without whom this unforgettable event could not have taken place.

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MPA

MOST EFFECTIVE INTERNET PRESENCE Westpac “Technology’s the facilitator – the real essence of the internet is being able to put really interesting content on there” Tony MacRae

Picture: Tony MacRae, GM mortgage broker distribution, and Nina Ivanovic, senior manager strategy, Westpac

Australian Broker

BEST INDUSTRY ADVERTISING CAMPAIGN National Australia Bank “We really showed that we listened to our brokers – their primary concerns of how we develop our business. And we want to continue to commit to the industry”

BEST INDUSTRY SERVICE RP Data “Brokers are really looking for information on what’s going on in the property market. We provide access to 96% of the market and give the brokers that tool to really understand it”

Picture: Peter Bromley, CEO, RP Data

WESTPAC

BEST COMMUNITY ENGAGEMENT Sam White, Loan Market “The key thing is to start with something you’re passionate about. In our case it’s homelessness; we want to be part of a solution to that problem … it’s very easy to think the solution is someone else’s problem, and I think we should be better than that” Picture: Sam White, chairman, Loan Market (right), with Stephen Leahy, CEO, Westpac Life Saver Rescue Helicopter Service

DECEMBER 2014 | 47

AUSTRALIAN MORTGAGE AWARDS 2014 / LOUD & PROUD

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Pepper

BROKER OF THE YEAR - NON-CONFORMING Giulio Avian, director, Fundsnational k&HUWDLQ o OHV DQG FHUWDLQ FLUFXPVWDQFHV UHTXLUH D ORW PRUH DWWHQWLRQ WR GHWDLO DQG WKDW V ZKHUH \RX JHW PH DQG P\ FRXQWHUSDUWV LQ WKLV DUHD ZKR DUH DEOH WR XQGHUVWDQG WKH H[WUD DWWHQWLRQ WR GHWDLO WKDW LV UHTXLUHGy Picture: Giulio Avian, Fundsnational (right), with Mario Rehayem, Pepper

COMMONWEALTH BANK

BROKER OF THE YEAR â&#x20AC;&#x201C; PRODUCTIVITY Mardee Thomas, 1st Street Home Loans k7KLV LV YHU\ XQH[SHFWHG DQ DPD]LQJ QLJKW DQG MXVW D JUHDW LQGXVWU\ WR ZRUN LQ { 3URGXFWLYLW\ WKLV \HDU KDV GHo QLWHO\ EHHQ DERXW NHHSLQJ LQ WRXFK ZLWK FXVWRPHUV DQG PDNLQJ VXUH WKH\ UH XS WR GDWH ZLWK WKH FXUUHQW HQYLURQPHQW DQG PDNLQJ VXUH WKHUH V FRPPXQLFDWLRQ DORQJ WKH ZD\y Picture: Mardee Thomas with Simon Elwig, Commonwealth Bank

BROKER OF THE YEAR â&#x20AC;&#x201C; FINANCE Mark Davis, The Australian Lending & Investment Centre k:H YH GRQH D ORW RI ZRUN JHWWLQJ WKH ULJKW SHRSOH RQ WKH ERDW VR UHDOO\ ZRUNLQJ RQ FRQVLVWHQW VWDII HIIHFWLYH VWDII WKDW o W RXU PRGHO { WKH DZDUGV DUH JUHDW ZH ORYH EHLQJ KHUH ZH ORYH FRPLQJ /RRN DW WKH QXPEHUV ODVW \HDU q WKH\ UH DPD]LQJ 6R , WKLQN WKH DZDUGV UHDOO\ >KHOS@ JHQHUDWH WKH QXPEHUV DQG JHQHUDWH WKH YROXPH DQG JHQHUDWH D JUHDW LQGXVWU\y

Picture: Finance broker Mark Davis, ALIC

48 | DECEMBER 2014

NEW TO

MPA ONLINE MOVERS AND SHAKERS: A once a month update on new BDMs, managers and other support staff at lenders and aggregators

LENDERS WANTED: Our popular forum where brokers can post difficult scenarios and get advice from the broking community

MPA 3O SECONDS: our express round-up of product updates, every Friday

BDM IN THE SPOTLIGHT: Find out more about your BDM – or find a BDM who suits you – with our weekly BDM Q and A on Wednesdays

visit www.mpamagazine.com.au

AUSTRALIAN MORTGAGE AWARDS 2014 / LOUD & PROUD

QUALITY YOUNG GUN OF THE YEAR – FRANCHISE

QUALITY YOUNG GUN OF THE YEAR – INDEPENDENT

George Farmer, Aussie Bundaberg “It’s a great industry to be part of: there’s plenty of RSSRUWXQLW\ LI \RX UH ZLOOLQJ WR JHW LQ DQG ZRUN KDUGy

David Ray, Elite Finance Professionals “I thought it was a real challenge to get into broking and to do something different … and I’m absolutely excited for the challenges ahead of me and to do more and more in broking. It’s fantastic to be at an awards like this, and to DFWXDOO\ ZLQ DQ DZDUG DW P\ oUVW HYHQW LV DPD]LQJy

50 | DECEMBER 2014

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BROKER OF THE YEAR â&#x20AC;&#x201C; FRANCHISE

BROKER OF THE YEAR â&#x20AC;&#x201C; INDEPENDENT

Josh Bartlett, Loan Market k, P DQDO\VLQJ P\ EXVLQHVV GLIIHUHQWO\ DQG SUREDEO\ ZKDW , need to do for productivity, and looking after the customer o UVW DQG IRUHPRVW { , WKLQN LI \RX FRQWLQXH WR GR WKH ULJKW WKLQJV GD\ LQ GD\ RXW \HDU LQ \HDU RXW LW V DOZD\V JRLQJ WR happenâ&#x20AC;?

Raymond Xue, ACA Mortgage Solution â&#x20AC;&#x153;I often get asked what do you do every day and what do you do differently? The answer is I care. I put customer QHHGV o UVW q WKDW V WKH RQO\ WKLQJ , P KDSS\ WR EH participating in these awards, and to win this award is fantasticâ&#x20AC;?

DECEMBER 2014 | 51

AUSTRALIAN MORTGAGE AWARDS 2014 / LOUD & PROUD

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NEW BROKERAGE OF THE YEAR Alliance Mortgage Solutions “we – me and my business partners - had been in the industry for more than three years before we set up this company, so we ghave a lot of dreams and we’ll continue to work hard to make these dreams come through. We will surprise you – all of you!” (Cissy Fang, codirector)

ANZ

BROKERAGE OF THE YEAR (<5 STAFF) – INDEPENDENT Intelligent Finance “we don’t advertise – all our business comes from referrals, so our philosophy is if we do a fantastic job for each of our current clients, they’ll feel compelled to refer us to another clients….we make sure that every client we hug and kiss the whole way through, not just during the process, but after the settlement as well” (Justin Doobov, Managing Director)

La Trobe Financial

BEST CUSTOMER SERVICE FROM AN INDIVIDUAL OFFICE KeyInvest Lending Services “All my guys across the country just love their clients, and that is the secret of mortgage broking, that is the secret of business”

Picture: Chris Burns, CEO, KeyInvest Lending Services (right), and Craig Robertson, national senior manager client partnerships, La Trobe Financial

52 | DECEMBER 2014

AUSTRALIAN MORTGAGE AWARDS 2014 / LOUD & PROUD

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Bankwest

AUSTRALIAN BROKER

BEST AGGREGATOR BDM

BEST MAJOR BANK BDM

Peter Bryant, Vow Financial â&#x20AC;&#x153;Keeping brokers happy â&#x20AC;Ś one of the main things is youâ&#x20AC;&#x2122;ve actually got to grow their business for them. You can save them money in other areas, but you need to offer them a ZLGH UDQJH RI o QDQFLDO VHUYLFHVy

Craig Dunning, Westpac â&#x20AC;&#x153;Brokers are very respectful people: return their calls; be honest with expectations â&#x20AC;&#x201C; thatâ&#x20AC;&#x2122;s the main thing. I love the venue â&#x20AC;Ś the entertainment is good; the speakers are good, IDQWDVWLFy

Picture: Peter Bryant, Vow Financial (right), with Ian Rakhit, head of broker sales, Bankwest

Picture: Peter Bryant, Vow Financial (right), with Ian Rakhit, head of broker sales, Bankwest

BEST NON-BANK BDM

BEST NON-MAJOR BANK BDM

Nicole Campbell, Pepper â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m amazed; so thankful for everyone that nominated me, thankful for my peers that were nominated, and thankful for the team behind me at Pepper. You have to treat brokers like they are part of your family; do everything you FDQ IRU WKHP EH WKHUH ZKHQ WKH\ QHHG KHOSy

James Brett, ME Bank â&#x20AC;&#x153;The award was very unexpected, so Iâ&#x20AC;&#x2122;m extremely grateful for all the people that voted for me. Iâ&#x20AC;&#x2122;m having a great night: great dancing, great MC, great awards FHUHPRQ\y

54 | DECEMBER 2014

AUSTRALIAN MORTGAGE AWARDS 2014 / LOUD & PROUD

MACQUARIE BANK

BROKERAGE OF THE YEAR – DIVERSIFICATION Astute Sydney City Central “There’s a lot more that you can look for in a client; there’s a lot more in terms of service that you can do other than a home loan”

Picture: Moshe Moses, company director, Astute Sydney City Central (right), with Dino Pesce, state sales manager NSW/ACT, Macquarie Bank

ME BANK

BROKERAGE OF THE YEAR (>6 STAFF) – INDEPENDENT The Australian Lending & Investment Centre k7KLV \HDU ZH YH VSHQW D VLJQLoFDQW DPRXQW RI time getting the right people in the business, and the rest of the time we’ve spent getting WKH SURFHVVLQJ DQG HIoFLHQFLHV ULJKWy

Picture: Jason Back, managing director, ALIC (right), and Stewart Saunders, national manager brokers, ME Bank

FRANCHISE BROKERAGE OF THE YEAR Choice Home Loans Blue Mountains “We’re just normal people wanting to help normal people, so we don’t try and do anything more than what we are, and I think that stands out … It’s been a great night. Michael Slater is awesome; we’re loving the music – it’s been an awesome time”

Picture: Peita Davies (left) and Katrina Couchman, Choice Home Loans Blue Mountains

56 | DECEMBER 2014

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COMMONWEALTH BANK

AUSTRALIAN YOUNG GUN OF THE YEAR George Farmer, Aussie Bundaberg â&#x20AC;&#x153;Give broking a shot. It requires a lot of hard work and dedication. If youâ&#x20AC;&#x2122;re focused, care about your clients, you can make a living out of it, get a lot of satisfaction out of it. Itâ&#x20AC;&#x2122;s a really good industry to be part of, so get in and have a crackâ&#x20AC;?

Picture: George Farmer, Aussie Bundaberg, with Lyn Cobley, executive general manager retail products and third party banking, Commonwealth Bank

BLUESTONE MORTGAGES

AUSTRALIAN BDM OF THE YEAR Craig Dunning, Westpac â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve been a BDM for quite a long time, so Iâ&#x20AC;&#x2122;ve had a lot of brokers, and over a period of time Iâ&#x20AC;&#x2122;ve continued to deliver on what Iâ&#x20AC;&#x2122;ve told them and built up a bit of a reputation, and I think they trust me â&#x20AC;&#x201C; thatâ&#x20AC;&#x2122;s the main thing Iâ&#x20AC;&#x2122;ve gotâ&#x20AC;?

Picture: Craig Dunning, Westpac (left), with Campbell Smyth, $&0 "QG? 1?AGÂż A Bluestone

DECEMBER 2014 | 57

AUSTRALIAN MORTGAGE AWARDS 2014 / LOUD & PROUD

58 | DECEMBER 2014

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NAB BROKER

AUSTRALIAN BROKERAGE OF THE YEAR The Australian Lending & Investment Centre â&#x20AC;&#x153;Whether youâ&#x20AC;&#x2122;re a great broker or a great brokerage, itâ&#x20AC;&#x2122;s our customer experience which GHo QHV XV { LW V HYHU\WKLQJ IURP RXU 3$ WR RXU DQDO\VWV DQG RXU EDFN RIo FH VWDII WR WKH managing director; we all contribute something to the customer experienceâ&#x20AC;?

Picture: Jason Back, managing director, ALIC (right), with Chris Carn, regional manager NSW/ ACT, NAB Broker

WESTPAC

AUSTRALIAN BROKER OF THE YEAR Raymond Xue, ACA Mortgage Solution k, P RYHUZKHOPHG , G OLNH WR WKDQN $)* P\ DJJUHJDWRU IRU WKH SDVW \HDUV WKH\ YH KHOSHG my business grow; Iâ&#x20AC;&#x2122;d like to thank my BDM who helped pull deals through, and Iâ&#x20AC;&#x2122;d like to thank my teamâ&#x20AC;?

Picture: Raymond Xue (left) with Jason Yetton, General Executive, Westpac Retail and Business Banking Picture: Raymond Xue, ACA Mortgage Solution (left), with Jason Yetton, general executive, Westpac retail and business banking

DECEMBER 2014 | 59

AUSTRALIAN MORTGAGE AWARDS 2014 / LOUD & PROUD

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DECEMBER 2014 | 61

THE DATA / HOUSE BUILDING

THE HOUSING SHORTAGE: RELIEF ON THE HORIZON? Bricks and mortar has never been so fascinating, nor construction statistics so eagerly awaited. Thatâ&#x20AC;&#x2122;s because house construction matters â&#x20AC;&#x201C; to the economy, to rising prices in Sydney and Melbourne, to the RBAâ&#x20AC;&#x2122;s policy over the next few months. Its numerous rises and falls tend to disguise the underlying trends, so MPA has drawn up a step-by-step guide to help identify these for you

Residential construction is experiencing its strongest growth in

According to the Australian Industry Group/Housing Industry Association Performance of Construction Index, which jumped 4.1 points to 59.1 in September

62 | DECEMBER 2014

Approvals for new dwellings are also up 3%, according to the ABS. However, not all states have beneďŹ ted equally

VIC QLD Number of new dwellings approved

WA NSW

6OURCE $%6 %UILDING $PPROVALS $UG k ALL Ă GURES SEASONALLY ADJUSTED

MPAMAGAZINE.COM.AU

At current approval rates, supply is starting to catch up with demand Some types of dwellings are driving growth more than others Source $%6 %UILDING $PPROVALS $UG k ALL Ă GURES seasonally adjusted

12

Dwellings (1,000s)

10 8

Why?

6 4

9.6%

Unit approvals (excluding houses) UP

2 0 60

Prices in NSW will continue to hit the roof

SA

TAS

NT

ACT

VIC

OLD

WA

Dwellings (1,000s)

50 40 30

Because the NSW housing shortage wonâ&#x20AC;&#x2122;t peak until 2015, according to the QBE Housing Outlook report

20 10

1.8%

House approvals DOWN

0

NSW

Dwelling Commencements 2013/14 Average annual underlying demand 2014/15 to 2016/17

Sources: QBE Australian Housing Outlook 2014-17, ABS, BIS Shrapnel. Forecasts: BIS Shrapnel

DECEMBER 2014 | 63

LIFESTYLE / FAVOURITES

MPAMAGAZINE.COM.AU

Favourite things Tim Brown, CEO, Vow Financial, and president, MFAA

Favourite drink: Must say Iâ&#x20AC;&#x2122;m partial to a nice red with good friends.

Favourite sport : 3LAYED RUGBY MOST OF MY LIFE BUT TOOK UP SURĂ NG later in life and love it. Canâ&#x20AC;&#x2122;t beat watching a morning sunrise on your board before work.

Movie: The Raiders of the Lost Ark series, Patriot, Braveheart â&#x20AC;&#x201C; really anything action-packed with a good storyline.

Tim Brown

Favourite book: Reading a lot of the Jack Reacher series written by Lee Child at the moment.

Place to be in Australia : Manly Wharf or Bryon Bay Hotel on a sunny afternoon.

Favourite music: Most people might be surprised, but I am a big fan of â&#x20AC;&#x2122;70/â&#x20AC;&#x2122;80s rock. Love AC/DC and a lot of the heavy rock bands such as Free, Bad Company, Uriah Heap, Yes, Deep Purple, Police, just to name a few. Of more recent, Creed, Linkin Park, Foo Fighters.

64 | NOVEMBER 2014

Favourite food: Just about anything really. Brought up in a family of seven, you learn to quickly eat what is in front of you or someone else will.

I am partial to Italian.

Favourite bar/restaurant: Machiavelli, Cafe Sydney, Rockpool; Flower Drum or Stokehouse, Melbourne; Michaelâ&#x20AC;&#x2122;s, Brisbane; Cocoâ&#x20AC;&#x2122;s, Perth; Chianti, Adelaide.