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MPAMAGAZINE.COM.AU ISSUE 16.12

GOING FOR GOLD Meet this year’s Top 100 Brokers AMA WINNERS Highlights from the 15th Australian Mortgage Awards

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MAJOR BANKS First annual grilling by Parliament

SIMONE TILLEY ANZ’s new head of retail broker distribution

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DECEMBER 2016

CONNECT WITH US

CONTENTS

Got a story or suggestion, or just want to find out some more information? twitter.com/MPA_Australia facebook.com/Mortgage ProfessionalAU

UPFRONT 04 Update

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FEATURES

AUSTRALIAN MORTGAGE AWARDS 2016

Highlights, pictures and interviews with the winners of the ‘Oscars of the Mortgage Industry’

TOP 100 BROKERS 2016

16 ANZ’s new head of retail broker distribution on education, property investment and more

Debating the likely outcomes of ASIC’s remuneration review

08 Statistics

Property investors are back, and they don’t just want your advice on finance

12 News analysis

Key points from the major banks’ grilling by Parliament, and why brokers could be dragged in

38 Greg Wells

It doesn’t get bigger than this: meet the industry’s top performers, with interviews, analysis and more

SIMONE TILLEY

06 Head to head

MORTGAGE INSIDERS

FEATURES

THE BIG INTERVIEW

A look at regulation and representation in broking, with advice from the Credit Industry Ombudsman

36 FEATURES

Discusses insights and broking know-how accumulated over 40 years in finance

62 Malcolm Watkins

AFG co-founder on the industry’s technological journey, from Excel to Flex and electronic lodgement

COMMERCIAL TO RESIDENTIAL

64 Peter Gwynne

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MPAMAGAZINE.COM.AU

Looking at a growing trend on the other side of diversification

FEATURES

DEBTOR FINANCE How expert brokers make debtor finance an essential part of their business

Get on your bike and ahead of the competition with this Gold Coast Top 100 broker

NOW ONLINE: Highlights from our livestreamed aggregators roundtable Advice and expertise from MPA’s High Performance Business Summits Top brokers and brokerages in Leading Mortgage Professionals

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EDITORIAL www.mpamagazine.com.au

CARRYING THE WEIGHT OF THE WORLD

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t’s Top 100 Brokers time of year again and, yet again, the numbers are hugely impressive, with two brokers each writing more than $300m in residential loans over the financial year. That begs the question: how exactly does a lone broker write that many loans, with just 24 hours in a day? The answer is they don’t, and haven’t done for some time. Every single broker in this year’s Top 10 – and the vast majority of the remaining 90 – has at least one assistant. Several top brokers, talking to MPA, picked out residential lending totals ranging from $25m to $50m, beyond which they believed a broker would have to get an assistant, to cope with everincreasing compliance requirements. In short, being a top broker has never been so incompatible with being a lone broker. This poses two questions. One: as a moderately successful broker, should you take that leap of faith and hire that analyst and continue the climb up the charts – or settle for a steady income? Two: does having employees, as all top brokers will soon have, make you a boss? The answer to the first question is

Being a top broker has never been so incompatible with being a lone broker up to the individual; the answer to the second is clearly yes. And being a boss brings with it certain responsibilities. Many brokers experience the pressure of being responsible for the livelihood of their employees. One multi-award-winning broker noted he was cautious about taking on staff in case he then had to let them go because of poor volumes; one of his employees had four children. Yet having company can also enliven the job: another Top 10 broker, previously working by himself, hugely enjoyed mentoring his new assistant while adding $30m to his settlement totals. Balancing entrepreneurialism and managerial responsibility used to be a decision brokers put off until that day when they hit the big time. Now it’s something you need to start thinking about the day you enter the industry. Sam Richardson, editor, MPA magazine

DEC 2O16 EDITORIAL Editor Sam Richardson Journalist Maya Breen Production Editor Roslyn Meredith

ART & PRODUCTION Design Manager Daniel Williams Designer Loiza Caguiat Traffic Coordinator Freya Demegilio

SALES & MARKETING Publisher Rajan Khatak Account Manager Simon Kerslake Marketing and Communications Manager Lisa Narroway

CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley Managing Director Justin Kennedy Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

EDITORIAL ENQUIRIES

tel: +61 2 8437 4720 sam.richardson@keymedia.com.au

SUBSCRIPTION ENQUIRIES

tel: +61 2 8011 4992 • fax: +61 2 8437 4753 subscriptions@keymedia.com.au

ADVERTISING ENQUIRIES

rajan.khatak@keymedia.com.au simon.kerslake@keymedia.com.au

Key Media Regional head office Level 10, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 • fax: +61 2 9439 4599 www.keymedia.com Offices in Sydney, Auckland, Denver, London, Toronto, Manila, Singapore

Mortgage Professional Australia is part of an international family of B2B publications and websites for the mortgage industry CANADIAN MORTGAGE PROFESSIONAL justin.darosa@kmimedia.ca T +1 416 644 8740

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 the magazine can accept no responsibility for loss.

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UPFRONT

REGULATION AND REPRESENTATION NEWS BRIEFS Fraud costs Australia $8.6bn a year Fraud and cybercrime are costing Australians around $8.6bn a year, according to government financial intelligence agency AUSTRAC. Speaking at a financial crime conference organised by the Association of Certified Fraud Examiners, AUSTRAC CEO Paul Jevtovic emphasised that “industry is our first line of defence”, and pledged to work closely with businesses and particularly fintech businesses. He also noted that AUSTRAC had recently conducted risk assessments on sectors deemed to be particularly at risk, which included financial planning and superannuation. Also speaking at the conference was Ralph Tursi, FBI attaché to the US Embassy, who said that business and industrial espionage was second only to counter terrorism in the Bureau’s top concerns. He was followed by John Langdale, an associate professor at Macquarie University, who warned that Southern China was becoming a hub for money laundering. The region was “almost out of control”, Langdale said, with casinos and banks – including the Bank of China – being used to launder the proceeds of drug trafficking and other crimes. He also mentioned a recent story in which a general from South Sudan, accused of human rights abuses, paid cash for a $1.5m Melbourne mansion.

New RBA governor says interest rates not to blame for house prices Transport infrastructure and an increase in home building are the solution to worsening affordability in Australia, new RBA governor Philip Lowe has told the House of Representatives Standing Committee on Economics. Asked if the RBA was concerned about house price growth outstripping wages, Lowe said the cause of high house prices was the locational value of land, rather than low interest rates. “We can do something about that through zoning and through transportation. That is the

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best thing to do about it. Again, that is not something the central bank has any involvement in. So, my day-to-day focus is on what is happening right now in the market – and I am a bit more comfortable about that.” But he said that as a father he was concerned about house prices. “The other issue – I worry about it really as a parent.” Lowe argued that interest rates only affected house prices in a month-bymonth sense, The effects were merely “ripples around a longer-term trend”, that trend being caused by easy access to credit, as well as by where Australians want to live, and location and zoning restrictions. Lowe refused to say whether he thought housing was overpriced.

MFAA further shrinks national conference The MFAA has rebranded and shrunk its national conference series. The 2017 MFAA Business Builders series will be a one-day state-based event in all states, excluding Tasmania and the Northern Territory, but unlike its predecessor, the Broker 2020 series, it will be shorter and cheaper. The move represents a further shrinking of the MFAA’s events portfolio. In 2015 the association still ran a single national convention over multiple days. MFAA head of marketing and communications Stephen Hale told MPA’s sister-title Australian Broker that the shorter timeframe – from just 9am to 2pm – was due to popular demand. “Quite a few are regional brokers who come in for it and have meetings set up with lenders and that sort of thing, so this gives them a bit more time for that sort of thing as well.” The FBAA still runs a single national event per year which is free to members, but Hale claimed that having state-based day events worked out as more cost-effective for MFAA members. He also advocated taking a more business-development focused approach. “It’s no good putting on a presentation about dealing with ASIC. We send out a lot of stuff about that and we meet with them every month.” Disclosure: MPA’s publisher Key Media runs its own event, the MPA High Performance Business Summit

NOTHING TO SEE HERE ASIC’s interest-only lending review has been interpreted as a thumbs-up but it flags up serious issues, for both brokers and ASIC As the clock ticks ever closer to the publication of ASIC’s remuneration review, brokers need all the good publicity they can get. The publication of Report 493, ASIC’s review of interest-only home loans, has been widely seen as providing some of that good publicity, and as an encouraging dress rehearsal for the larger remuneration review, which will be published in December. Report 493’s headline figure – that the proportion of brokers providing proper evidence of meeting consumer requirements has risen from 70% to 80% – was quickly welcomed by the industry. “The report supports the positive impact that brokers have on providing credible credit advice to consumers,” commented MFAA chairman Cynthia Grisbrook, “by ensuring that interest-only loans are only offered after the strictest of compliance standards are met.” The FBAA also welcomed the findings. ASIC itself is pleased with the results, though it points out that “there is still room for improvement”. While 80% of brokers provided a statement explaining why an interest-only loan met the customer’s requirements, that means 20% – one in five brokers – did not. Even within that 80%, however, ASIC said “the level of detail in these statements varied considerably, and in some cases where an interest-only loan was specifically sought by a consumer, the reason for this was not clear”. Furthermore, ASIC is concerned that although many brokers write detailed notes, recordkeeping is not always centralised. Additionally, it wants brokers to move away from broad statements (giving as an example “Client is refinancing to a lower rate”) to “a logically set out

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and detailed narrative account of the consumers’ short and longer term requirements and objectives”. For advice on how to write such an account ASIC directs brokers to Regulatory Guides 205 and 209, and includes examples of good statements in Report 493. Finally, ASIC’s review does not actually say that 80% of all brokers are doing a good job with interest-only lending. In fact, ASIC

Focusing on large franchises, rather than sole-operator businesses, risks overlooking problems caused by individuals surveyed around 63% of mortgage broking credit representatives from 11 large mortgage brokers of sizes ranging from 347 brokers upwards. But while 63% is a representative sample size, focusing on large franchises rather than sole-operator businesses risks overlooking problems caused by individuals acting without the compliance support and documented processes that franchises provide. Evidently, ASIC’s scope may need to expand before it can close the book on interest-only lending.

CREDIT OMBUDSMAN Raj Venga CEO CREDIT AND INVESTMENTS OMBUDSMAN

Fast fact The CIO received 299 complaints about brokers and aggregators in FY2015/16, more than the number of complaints about financial planners but fewer than those related to lenders

Brokers, as financial service providers, are required to sign up to a dispute resolution scheme, and most are with the Credit and Investment Ombudsman (CIO). MPA spoke to ombudsman Raj Venga about the latest CIO statistics, and where brokers were going wrong. Complaints about brokers are going up: in the 2014/15 financial year aggregators and brokers were the subject of 6.1% of complaints to the ombudsman; in 2015/16 that proportion rose to 6.1%. Yet when you look at the actual numbers involved, that increase is shown to be negligible: 299 complaints were made this financial year, just five more than last year; hardly a cause for alarm. Brokers are still far behind residential lenders (689 complaints; 14.5% of the total) and debt collectors (1,996 complaints; 42.0% of the total) as the main subjects of complaints received by the CIO. For brokers not wanting to end up on the wrong side of the CIO, understanding why consumers complain is important. While the 2015/16 figures were not yet available at the time of writing, in 2014/15 the main cause for complaints about brokers was ‘Inappropriate finance, including responsible lending’ (11.4%), followed by ‘Failure to act with due skill, care and diligence’ (10.6%) and ‘Complaint about the credit provider’s fee or interest rate’ (7.6%). What Venga could tell us about this year’s figures is that “we receive very few complaints about brokers related to commissions having an effect on the broker’s choice of lender or product”. The CIO is facing its own review: in August the Minister for Financial Services, Kelly O’Dwyer, announced that the government would look at Australia’s three dispute resolution bodies, including the possibility of merging them into a single organisation. Venga rejects the merger, pointing out that “CIO’s FSP members are generally not supportive of being in a single financial services EDR scheme which is, and has historically been, generally geared towards large institutional members such as banks and insurers”. Instead, Venga proposes that the dispute resolution schemes jointly fund a single consumer-facing help desk which could direct them to the appropriate scheme, give them information on how to resolve a complaint, and put them in touch with other services, such as financial counsellors.

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UPFRONT

HEAD TO HEAD

What’s the most likely outcome of ASIC’s remuneration review?

John Flavell

Michael Russell Managing director MoneyQuest

Principal Digital Finance Analytics

While the trail commission is unlikely to be banned, all parties associated with the mortgage industry will be reviewed, and we believe this is an appropriate line of enquiry. Borrowers have the right to know what their brokers are being paid by their lenders, and how that level of remuneration may differ from lender to lender. At Mortgage Choice, we already have a similar policy in place for our brokers and believe that regardless of the outcome this will only strengthen the industry. We support the need for transparency when it comes to commissions, especially when you now consider that mortgage brokers are responsible for more than 53% of all loans written in Australia. We look forward to the results of the review and see this as a positive opportunity for both brokers and consumers, highlighting the tremendous job this industry does for consumers each and every day.

The most likely outcome is that we won’t learn anything this year! The sheer volume of data requested is almost certain to breach the timelines announced by ASIC to collate, interpret and provide their initial findings and recommendations. When they do, I have no doubt that mortgage brokers will be found to be operating in the best interests of their clients, with no evidence of any correlation between client lender recommendations and lender commissions. Notwithstanding this outcome, I am anticipating a raft of additional regulation designed to provide a greater level of reforms consistency across retail financial services. This will most likely manifest in changes in lender volume bonuses and soft dollar incentives. I don’t, however, foresee any change to the overall remuneration structure of mortgage broking commissions, which continues to serve consumers well and provide for a healthy and highly competitive home loan market.

ASIC’s ‘behind closed doors’ remuneration review will probably focus on the various ‘soft commissions’, including volume discounts and other incentives such as bonus payments, broker awards and prizes, rather than addressing head-on the question of whether commissions should be paid at all. They will also most likely insist on better disclosure of commissions at the point of first advice so consumers can be fully informed as to whether they are receiving cross-market advice, or a narrower set of possible options based on the broker-lender alignment and the various incentives in play. The current low bar of ‘not unsuitable’ advice will likely remain, rather than moving to best advice. This is despite the fact that in the UK, for example, broker commissions have been banned in favour of a fee-for-service model. The regulator concluded there were too many inherent conflicts when advisers were paid on commission, and no tweaking of the model, or enhanced disclosures, could solve this contention.

CEO Mortgage Choice

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Martin North

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UPFRONT

STATISTICS

ALL ABOUT INVESTORS

PROPERTY INVESTORS WANT YOU With all the talk about online disruptors, it’s easy to forget that brokers are still the disruptors in Australian finance, at least in the property investor space. In fact these stats suggest property investors are becoming even more likely to use a broker.

A new report from Property Investment Professionals of Australia asks what investors are buying, and how they’re financing it

THANKS TO APRA, the banks and concerns about oversupply, property investors have been the ‘bad news story’ of the last 12 months. And investment lending figures, while improving in July this year, are still 19% below their peak of $14.6bn in April 2015. Nevertheless, investor lending still totalled $11.8bn in July, and investors remain important to many brokers. Property Investment Professionals of Australia’s (PIPA’s) 2016 Annual Investor Sentiment Survey report also suggests that brokers are just as important to investors. The report indicates that sentiment is recovering, shrugging off concerns about finance, oversupply and changes to negative

STILL POSITIVE ABOUT PROPERTY PIPA’s report suggests brokers should get back in contact with their investor clients, because investor sentiment has improved markedly since 2015.

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71%

believe now is a good time to invest (63% in 2015)

58%

are looking to buy a property in the next 6–12 months (56% in 2015)

72%

haven’t put plans on hold because of proposed changes to negative gearing

75%

haven’t put plans on hold because of concerns around oversupply

gearing. Property investors appear increasingly likely to use a broker and indeed hold brokers in high esteem, choosing them for property investment advice above financial planners, buyers’ agents and property educators. Yet this also suggests that brokers will find themselves pushed to provide property advice. PIPA’s report found that 93% of investors thought at least some education should be mandatory for those giving advice, and that brokers working in this area could potentially attend such a course. But the potential conflicts of interest and blurred lines surrounding brokers providing property investment advice will require a longer-term solution.

Through a mortgage broker Directly from a bank Directly from a credit union, building society, specialist lender, etc Other N.A. (paid cash)

DID THE INVESTOR LENDING CRACKDOWN WORK? In 2015, banks made major changes to their investment lending policies, prompted by APRA’s 10% growth limit on investment lending., and PIPA’s report suggests the impact of these was substantial. But as many leading brokers indicated at the time, many investors were still able to secure finance, some through other lenders.

Unsure

With a considerable minority of property investors saying they were ‘unsure’ about lending impacts, brokers have a considerable opportunity to give them that information 22%

YES

NO 32%

Have recent changes to lenders’ investor lending policies impacted on your ability to secure finance for an investment property?*

42%

*N.A. 4%

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65%

71% 2% 3% 3%

3%

How do you intend to secure finance for your

How did you secure your

last investment loan?

3%

next investment loan?

4%

27% 19%

WHAT INVESTORS WANT FROM THEIR LENDERS

IN NEED OF ADVICE

In 2015 banks drew a line between investors and owner-occupiers, giving the latter more preferable interest rates. PIPA’s findings suggest that investors want that situation reversed; two thirds of investors would go for a lender willing to take that step. The report also suggests that interest-only loans continue to be enormously popular in the investment space.

Brokers are among the top professionals that investors turn to for property investment advice:

YES

80% 70% 60% 50% 40% 30% 20% 10% 0%

YES

Unsure NO Would you choose a lender or refinance with a lender if they offered the same interest rates for investors as owner-occupiers?

NO Unsure Would you choose a lender that offered the option of an interest-only repayment period, as opposed to a lender that didn’t?

1

Property investment adviser

=2

Mortgage broker

=2

4

Buyer’s agent

5

Property educator/coach

Accountant

Interesting, 93% of respondents believed that any person providing information or advice on investing in property should have some level of formal property investment training. Source: PIPA Annual Investor Sentiment Survey 2016

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NEWS ANALYSIS

MAJOR BANKS

OVER HOT COALS After a grilling in Parliament, Australia’s major banks have never been so under fire from regulators, politicians and the public. MPA editor Sam Richardson asks if brokers will be the next to feel the heat

IT WAS meant to be smooth sailing for the banks. Compared to the threat of a royal commission, a day out in Canberra addressing the Parliamentary Standing Committee on Economics looked to be a soft punishment for the banks under fire over BBSW rate rigging, financial advice and not passing on full RBA rate cuts. But what started out as smooth sailing quickly turned hostile. “Structure a sentence for me,” said Liberal MP Scott Buchholz, addressing Commonwealth Bank CEO Ian Narev, “about how fairness fits into a 21.43% cash advance in that credit card space, because, to me, that is gouging”. Narev left Parliament having admitted that the bank’s explanation of its interest rate decision in August appeared “opaque” and was “overly technical”. That was just day one. Over three days of questioning ANZ conceded that they would take “leadership” in reducing credit card rates, NAB made public its decision to stop funding political parties, and by the end of the week an irritated Brian Hartzer, CEO of Westpac, told his inquisitors that “it seems an interesting route to go down where governments were in the business of regulating what products were offered in the market”. It’s rare to see major bank CEOs forced to publicly defend themselves en masse, yet the Standing Committee’s annual review of Australia’s four major banks is just the tip

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of the iceberg. The Australian Bankers’ Association (ABA) lists seven current reviews or regulations being considered by regulators and the government that could affect them (in addition to the ABA’s own review). Yet brokers shouldn’t get too comfortable. What the ABA’s list doesn’t include is ASIC’s remuneration review, which will report in December. With the publication of that report approaching, MPA asks: in a political environment so hostile to banks, could brokers be next in line?

“One of the biggest mistakes we can make in banking is to look at default rates now, assume that they are going to continue, and price for those default rates” Ian Narev, Commonwealth Bank Mortgages Firstly, it should be noted that brokers were mentioned just once in the Standing Committee’s review, in a dead-end question about RAMS directed by Nationals MP Kevin Hogan at Westpac’s Brian Hartzer. The question led nowhere; indeed brokers got off extraordinarily lightly from the whole affair, given financial planners and the remuneration of branch staff were two big topics of discussion.

August’s cash rate cut and the banks’ reaction to it did take up much of the sessions, but it didn’t prompt any new responses from the banks that the market hadn’t already heard. CBA’s Narev warned the committee that the current low default rate shouldn’t mean prices coming down. “One of the biggest mistakes we can make in banking is to look at default rates now, assume that they are going

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MAJORS STILL DOMINATE MORTGAGE MARKET In August 2016, 72.2% of loans written by AFG came from majors and their non-major subsidiaries. ANZ CBA NAB Westpac Other

27.8%

16.9%

21%

24.6%

9.6%

Source: AFG Competition Index, September 2016. Note: Figure includes subsidiaries of major banks, including St. George Banking Group and Bankwest.

to continue, and price for those default rates,” Narev said. And Hartzer flatly denied the committee’s suggestion that Westpac’s interest rate was determined by the cash rate, emphasising the importance of wholesale and internal funding. More interesting than the cash rate discussion were the resulting questions concerning tracker mortgages – mortgages that are directly indexed to the cash rate. Tracker mortgages are common in the UK and Europe but aren’t currently offered in Australia. That could be about to change. ANZ CEO Shayne Elliot told the committee: “I think there is a very valid place for that product in Australia. In fact we have looked at it and we continue to look at it to see whether there would be a market proposition for us”. Narev

also said CBA had “no specific objection” to tracker mortgages, although he noted that the take-up of these in the UK had recently fallen. The problem with tracker mortgages, according to all the banks, is the cost. “Tracker mortgages are really quite fraught from a risk point of view, and we saw this in the GFC in particular,” explained Westpac’s Hartzer. The premium required to cover this risk would make a tracker mortgage more expensive than a standard variable rate, he said. Tracker mortgages offer certainty for borrowers, but ANZ boss Elliot argued that fixed rates provided a better solution. “If people want certainty in Australia, they have tended to choose to have a fixed rate, so they do have an option of certainty. We are not

convinced that there is a market to pay more for certainty.”

Remuneration Scrutiny is of course a double-edged sword, no more so than in the case of remuneration. During ASIC’s review, brokers have constantly argued that the remuneration of bank branch staff should also be investigated (ASIC confirmed this would be the case), and again and again the Standing Committee returned to the question of staff remuneration at board and branch levels. Labor MP Matt Thistlethwaite questioned all four bankers on “the issue of the remuneration structures in your bank and incentivising products being pushed on customers when they may not be in their best interests”.

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FEATURE / BROKER EDUCATION NEWS ANALYSIS

MAJOR BANKS “I think there is a very valid place for that [tracker mortgages] in Australia. In fact we have looked at it and we continue to look at it” Shayne Elliot, ANZ BRANCH STAFF REMUNERATION The Standing Committee on Economics pressed the major banks to reveal the incentives on offer for frontline branch staff connected to selling products. Of total employee compensation, the following proportion could come from selling products:

10%

ANZ

CEO Shayne Elliot said that on average 10% of employees’ total compensation came from sales-driven incentives; however, tellers cannot sell products and can only refer customers to specialists.

5%

Commonwealth Bank

Incentives for selling products are branch based, CEO Ian Narev told the Standing Committee. Another 5% worth of incentives are connected to customer satisfaction.

10%

NAB

0%

Westpac

Tellers are not authorised to sell products themselves, noted CEO Andrew Thorburn, and can only refer to specialists.

Westpac have removed all product sales incentives from tellers, although this hasn’t yet been extended to the St.George Group.

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Asking about incentive breakdowns and incidences of missold products, Thistlethwaite was clearly trying to link staff remuneration and the inappropriate pushing of products. He was not alone in doing this, and remuneration also came into increasingly heated discussions about financial planning. These questions had their desired effect, putting the bank chiefs on the defensive. Not only did the CEOs reveal their frontline employees’ compensation packages but they hurriedly insisted that pushing products wasn’t the main determinant of incentives. As CBA’s Narev put it, “at the core of everyone’s remuneration and assessment, from that time up until today, is customer satisfaction”. ANZ’s Elliot noted that “only a third” of incentives were related to selling products. While the banks resolutely defended their right to offer products to customers, it’s clear the issue of branch staff remuneration is an embarrassing one for them. NAB CEO Andrew Thorburn told the committee, “I acknowledge more needs to be done in the area of product sales incentives.” NAB has looked to end incentives for branch staff poaching NAB Broker loans. And Westpac says it has removed incentives for tellers to sell products, without confirming whether it would extend this to the St.George Group. Across all three days, one thing was abundantly clear: remuneration is a pain point for the major banks. They need some good news in this space, and so at the board level, curtailing broker commission could be seen as a way to show the public they’re taking action. A critical verdict on broker commission from ASIC could give them the licence to do just that.

Brokers Barring some miraculous revival in the banks’ fortunes, Parliament’s annual review of

Australia’s four major banks will be an ongoing, annual affair, presumably looking at other areas of financial services, including brokers. A disturbing indication of how the broker channel might emerge from a parliamentary grilling came from the harsh questioning about financial planners. Recounting the many tragic cases of misconduct over the last few years, with pressing questions about how many planners had actually been sacked, the Standing Committee ensured this topic would be prominent in the news, and it was. From NAB’s 2.5% of financial planners sacked to CBA’s $11m in payouts for problematic financial advice, this topic

“I acknowledge more needs to be done in the area of product sales incentives” Andrew Thorburn, NAB overshadowed rate rises in attracting terrible publicity for the banks. Clearly, brokers and financial planners are in quite different positions. Commercially, the major banks have good reasons to engage with brokers, and they do – most notably NAB’s reintegration of NAB Broker in September and its accompanying efforts to end channel conflict. The issue for bank CEOs is about control and publicity. Unlike investment products, mortgages have not inflicted much pain in recent years, but rising defaults in mining areas could change that. Add to that a critical ASIC review of commissions, and a few criminal cases involving brokers, and it’s not that difficult to imagine banks being criticised for their relationship with the third party channel. Public and parliamentary scrutiny of the major banks is essential, revealing, and already appears to be creating better outcomes for consumers – a banking tribunal was announced the day after the sittings. Yet brokers must be aware of the pressure it puts on the banks to avoid controversy, and shouldn’t imagine the broker channel won’t be involved.

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THE BIG INTERVIEW

SIMONE TILLEY

“Because I am new I have an open mind about how we can make this business the best one we can”

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SIMONE TILLEY: A FRESH PAIR OF EYES ANZ’s new head of retail broker distribution tells MPA editor Sam Richardson why she’ll be listening to her BDMs on the ground as she makes education her core focus

MPA: How does your experience in finance equip you to work with brokers? SIMONE TILLEY: My background obviously is in business: I’ve had the benefit of working with small businesses, through to medium businesses, right through to our institutional, more complex end of town. I do have deep subject matter expertise in agribusiness and I’ve enjoyed over my career being part of industry. I don’t just come to work to sell finance; I come to work to be part of something greater. Really, from a broking landscape viewpoint I can see this is an industry, not just a job, and I look forward to contributing; whether it be in broking or across the industry, I’m more than happy to play a role.

MPA: Have you worked with brokers in your previous roles? ST: I’ve worked with brokers both as a relationship manager, where I’ve personally gone to brokers for business, and in a leadership role, working with brokers as part of what we term our ‘circle of influence’ in the broader marketplace. My first assistant manager at Westpac has become a successful commercial broker. Her name is Belinda Gibson, and I’ve had the good fortune of watching her career blossom over time. She’s now a commercial broker, and I’ve mentored other people at

the bank who’ve gone on to become brokers, so I’ve got a fairly good idea of what brokers do. I get the landscape; I respect people have choice, and we’ll work hard to listen and serve the market in the best manner [we] can.

MPA: What immediate changes have you made since you came into this role?

to be the number one bank from a service proposition, in terms of responsiveness, proactiveness and fixing root causes of problems so we can drive greater productivity with our people, our brokers, and ultimately our speed to market, from a customer experience viewpoint. We always have a ‘need for speed’, and I think it is something we are famous for in

“It’s one thing that differentiates ANZ from its peers, that residential and commercial third party has a very strong united front” ST: There are not many changes; ‘areas of focus’ is a good way to put it. Really it’s about ongoing education in this space and how we lead with insights. One thing we do exceptionally is educate our BDMs, our ‘feet on the street’. It’s something that I want to continue to invest in; it’s something that yields great returns and I’m very proud of our great people, and it’s a real differentiating point for ANZ. We also want to continue our investment in the broker space as well as the aggregators. For me this is about how we work in partnership with each other, which is how we make the industry a more prosperous one over time. The other one is service: our aim is

the market and something we continue to do well. [Then there’s] simplicity: we have a responsibility to make sure that both from a bank and a customer experience we do make things simple for others. One of the things that I have ignited since my time in the role is an internal program that I term ‘Broker Innovation ThinkTank’, where I’ve nominated a BDM – or they’ve nominated themselves – representing a state so  … we can make things simpler and propel forward our technological advancements. It’s something we really want to advance over the coming 12 months … Because I am new I have an open mind about how we can make this business the best one we can.

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THE BIG INTERVIEW

SIMONE TILLEY SIMONE TILLEY’S CAREER TIMELINE

1995 Starts first job as an agribusiness field officer at the Wool Finance Corporation

1996 Moves into banking with Westpac as its agribusiness manager for Gipplsand, Vic

2004 Promotes to senior relationship manager at Westpac

2006 Manages Pack to the Future, a family business specialising in packaging

2010 Returns to banking, this time at ANZ, first as head of strategy and business execution, global agribusiness, and later holding the dual title of head of global utilities and infrastructure and director, institutional business

2013 Becomes ANZ’s state head of regional business bank Vic and Tas and national head of commercial regional bank

2016 Succeeds Keiran Evans in May as national head of retail broker, ANZ

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MPA: Are commissions going to be an area of focus for ANZ, and if not, why not? ST: We believe that our commissions are competitive and are in line with our focus on responsible lending practices. I guess the key is finding the right balance with all market participants, and the best possible way to do that is to listen and engage with others. It’s something that we need to constantly evaluate. MPA: Is it that commissions are simply becoming less important as a way to get business? ST: Interest rates are important, but fortunately for ANZ this is not the only area we want to excel at. As any good broker will tell you, those areas are product mix, service proposition, our BDMs, our credit operations, our ability to be consistent with our service level agreements, and consistency is king. It’s about the full spectrum … looking at things with a more holistic lens and in a more collective manner.

things we do really well is educate the marketplace … [We had] a masterclass last Friday with Mortgage Choice, and one of the things they explained to me is what they love about the ANZ education proposition is that our education is centred around the brokers, not necessarily around the bank. There’s transparency around credit policy changes, the way we communicate those to brokers so there’s clarity and transparency of message so brokers are able to navigate our systems so much more fluidly than other lending institutions. One of the other things I think is worth highlighting is our broker webinars. It’s something we’ve done digitally, in addition to our face-to-face proposition, just so we are able to have a greater reach in our national marketplace. In August we had 600 registrations; last month we had over 2,000 brokers register on our webinars, which is a proof point that the market feels this is a valuable tool from an engagement and

“I would like to strongly emphasise property investors are a highly attractive statement, and we’re open to all ideas around how we can continue to prosper in this space” MPA: BDMs and credit policies have been an area of strength for ANZ. Are we likely to see any further improvements over the coming year? ST: That’s something we’re working hard towards, and certainly from a technological advancement viewpoint that’s of huge focus in our wider business as we have a greater interest in customer experience from end to end. One thing that’s really clear to me since starting this role is the success of our BDMs, and the reason we are successful is because we invest in them. Our BDMs go above and beyond, and I think it’s because they have the appropriate product knowledge, service, they’re very responsive and have the ability to navigate the appropriate systems and stakeholders to get a job done. ... One of the

education viewpoint. [The webinars are available to brokers who deal with ANZ.] There’s a reason we have [Saturday processing]; it’s to allow customers to obtain pre-approval on Saturday morning and head out to auction day with certainty, so we feel this has a real impact on customers and is an example of a pragmatic improvement we‘ve made in terms of what our customers expect from the bank.

MPA: ANZ recently cracked down on loan guarantors. Why did you make these changes, and how will you be helping first home buyers over the next year? ST: First home buyers are a critical and very attractive segment for ANZ. First home buyers have a critical set of needs, and we had noticed that the incidence of guarantees had

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increased over time and many participants are trying to overcome the deposit hurdle given current housing prices. In reviewing our own policies and key benchmarks we recognised we needed to review our own

stronger than in our commercial division, and it’s something we’re growing steadily year in, year out. What we are doing is almost taking a two-up approach where a residential BDM will take out a commercial BDM so

“One thing that’s really clear to me since starting this role is the success of our BDMs, and the reason we are successful is because we invest in them” policy in order to obtain the right balance between customers, the guarantor and the banks. Guarantors are often parents or people that have a close attachment to the borrower. All we’re trying to do here is ensure we have the right balance between guarantors and offering them the right level of protection.

they can take the market as one, and make things simpler for our brokers. It’s certainly something we’re good at. We have a dual app process to make things simpler for the brokers so there’s not two applications should there be a commercial application and a residential application … [it’s] really a proof point of our unity across the divisions.

MPA: Are we likely to see more tightening in the property investor space? Is this still a useful group of customers for ANZ and for brokers? ST: Absolutely. The property investor space is very important and a strategically important area for us. It’s a dynamic marketplace and a function of both supply and demand. I would like to strongly emphasise it’s a highly attractive statement, and we’re open to all ideas around how we can continue to prosper in this space. Having said that, there are various pockets of asset classes, particularly geographies, where it may be prudent to consider attractiveness, but by no means are we pulling out of the property investor space.

MPA: What can ANZ offer beyond residential mortgages?

ST: ANZ is a Tier 1 bank, one of the few AA-rated companies in the country, and what differentiates us from a credit union is we have a differentiated portfolio, and we are able to offer all participants, whether it be a person buying a home, saving for a life goal, creating wealth for retirement, starting a new business, building a business or stepping into the ring of larger, more international businesses, we are a home for each of these categories.

MPA: How would you like ANZ to be

ANZ’S BROKER INNOVATION THINKTANK To better understand the broker market, ANZ has set up a Broker Innovation ThinkTank which will periodically present ideas to Simone Tilley and the National Leadership Broker Retail Leadership Team. National partnerships manager Tim Carroll will be guiding the team, which will be made up of BDMs representing the different states, rather than executives. This was a deliberate tactic, says Tilley. “We saw a need to create a forum where seniority didn’t get you a seat at the table, rather your willingness to participate and make a genuine difference did.” The ThinkTank will present ideas on how to raise BDM productivity and improve speed to market for brokers and customers. They are currently compiling a list of apps with the potential to disrupt the market, and apps that the market would value. Tilley says ANZ’s senior management will be involved in discussing these ideas and taking them through to reality. “We want to ensure that the broader company understands this is a business worth investing in.”

perceived by brokers 12 months from now?

ST: As the most innovative, the most MPA: Is your role mainly focused on residential rather than commercial lending? How are you making it easier for brokers to write commercial loans? ST: Correct … at the moment my role is specifically residential, but I am working very, very closely with [commercial]. I think it’s one thing that differentiates ANZ from its peers, that residential and commercial third party has a very strong united front. What we do is joint calling together. The maturity in our residential division is far

educated in the market, and really taking education of our BDMs, our brokers and our aggregators to a new level. From a service viewpoint, to be regarded as best in class – [to be recognised for] our responsiveness, our proactiveness, our ability to fix root causes and really drive productivity in the market, second to none; [for] our speed, so that we are the reliable and consistent bank and doing a much better job, making it easier for our bankers and attracting the best and brightest in the marketplace.

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SPECIAL REPORT

6

TOP 100 BROKERS

Out ahead of the pack, our Top 100 Brokers this year have built resilient businesses that can last the distance, no matter what the market throws at them

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Sponsored by

FOR ALL those hours spent training, a sprinter’s career comes down to a single measure: time – whether it’s their personal best, meeting qualifying statistics, or winning the gold medal at the highest level. The MPA Top 100 is our attempt to bring that singular focus to broking, looking specifically at the value of residential loans written by a broker over the financial year. That, and only that, is the sole basis for the rankings you’ll see over the next few pages. Clearly there are other ways to measure success. In this magazine you’ll also find the winners of the Australian Mortgage Awards, who are selected by a panel of expert judges based on a wide range of factors. Other rankings reports look at all types of lending, or particular specialist groups, such as commercial brokers or new brokers. Yet the Top 100 continues to grab brokers’ attention because using a single figure makes it all the more transparent. We’ve made a number of changes to this year’s report, including additional analysis sections on top aggregators and regional brokers, as well as a range of data, interviews with the Top 10 and of course the list itself. This year demands extra analysis because, for the first time since 2011, the total volume written by the Top 100 has fallen, and a number of brokers from last year’s Top 100 have not made it into this year’s list. In our interviews with the Top 10 brokers this year, we’re focusing on the role of supporting staff. With loan numbers moving into the thousands, the lone broker model is becoming increasingly unviable. If you’re considering taking on support staff – or want to do more with those you have – these top brokers reveal the inside workings of their brokerages. Before reading this feature, take a moment to find out your own annual total volume: could you be in this list? If so, we urge you to apply next year. For now, we’d like to thank all the brokers who applied, whether or not they appear in this list, those brokers’ aggregators and our sponsor Suncorp Bank, and we congratulate Australia’s top performers.

$101,481,319

$335,973,416

Total value of residential loans written by an average Top 100 broker

Total value of residential loans written by 2016’s No. 1 broker

MESSAGE FROM OUR SPONSOR Suncorp is thrilled to sponsor and support the 2016 MPA Top 100 Brokers list, a tremendous initiative recognising our best and brightest in the industry. Suncorp was established in 1902 and has built deep connections with customers and communities throughout rural, regional and metropolitan Australia, and remains committed to supporting their growth. We see our service as an extension of our broker partners and aim to deliver an exceptional experience to customers. We understand that the foundation of any good broker business is relationships. I think all the brokers on the list can attest to that and be commended for their commitment to serving and satisfying their customer base. While overall this year’s Top 100 total value fell slightly (still higher than 2014), it’s extraordinary to celebrate and recognise this year’s No. 1 broker who achieved a record $335,973,416 total loan value. This year incorporates a large number of MPA, AMA and other young guns. Special recognition goes to No. 11 broker George Samios, who is setting records alight in his 20s. It’s also sensational to celebrate younger female brokers who are beginning to make an impact high up the table, such as Rachelle Eyndhoven in 19th place. I’d like to congratulate the brokers who’ve made it on to this year’s Top 100 list, as well as the brokers and aggregators who applied. High achievers share similar attributes across industries: they work hard, are driven and passionate; they believe in themselves and they don’t give up. I’m proud to be part of this group of driven, highperforming professionals. Steven Degetto, Head of Suncorp Bank Intermediaries, Suncorp Group

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SPECIAL REPORT

TOP 100 BROKERS

100-81

MPA TOP 100 BROKERS: 100-81

ALL UNDER THE ONE ROOF

Rank

Name

Company

State

Total value of residential loans FY 2015/16

Total number of residential loans FY 2015/16

100

Xavier Quenon

Go Mortgage Corporation

QLD

$64,820,000

161

Choice Capital, the brokerage of 90th placed broker Joshua Durrant, has brought financial planning in-house, and has another legal business specialising in estate planning. “[Customers] don’t expect it," says Durrant, "but once we explain the various different services that we provide, they come to appreciate the benefit of having one team under the same roof working together for them.”

99

Seuj Baura

The Australian Lending & Investment Centre

NSW

$64,869,492

246

98

Champika Herath

CLN Home Loans

VIC

$65,000,000

162

97

Max Ivanoff

Mortgage Fair

VIC

$65,303,986

116

96

Scott Le Quesne

Aussie Parramatta

NSW

$66,211,262

162

95

Jarrod Carland

Aussie (mobile broker)

VIC

$66,279,207

151

94

Chris Crook

Aussie Shellharbour

NSW

$66,290,356

161

93

Richard Hoenig

Arleon Capital

NSW

$66,508,000

136

92

Whitlam Malkoun

Aussie (mobile broker)

VIC

$66,701,729

168

91

Anthony Walsh

Aussie Carina

QLD

$66,752,545

178

90

Joshua Durrant

Choice Capital

VIC

$66,922,731

122

89

Aden Williams

Alert Finance

NSW

$67,201,000

123

88

Jon Somers

Aussie Bondi Junction

NSW

$67,474,964

100

87

Neil Massingham

Shire First Mortgages

NSW

$67,725,021

162

86

Sharon Bal

Loan Market Cannington

WA

$68,000,000

201

85

Jarrod Simpson

SOL Financial Group

NSW

$68,033,824

129

84

Brett Dickie

Oxygen Home Loans

NSW

$69,400,364

118

83

Pei Chen

Aussie (mobile broker)

NSW

$69,435,869

151

82

Kapil Nepal

Smartline

NSW

$70,380,819

230

81

George Tzilantonis

Aussie Berwick

VIC

$71,389,837

178

17 YEARS IN THE MAKING Neil Massingham, No. 87 in this year’s Top 100, has been running his brokerage, Shire First Mortgages, since 1999. He now helps the grandchildren of his original clients, and still has his first client on his books. Longevity is about relationships, he says. “Look after your clients … rather than them having the relationship with the bank, get them to have the relationship with you.”

AT WHAT POINT SHOULD YOU TAKE ON SUPPORT STAFF? Hiring support staff can transform a broker’s business, but many see it as taking a ‘leap of faith’, with the stakes being your livelihood and that of your staff. We asked brokers from our Top 10 when a broker should consider taking on support staff.

$3m “Anyone who’s writing

over $3m a month should be considering a PA … I’ve had PAs for the last 10 or 12 years, and basically a mortgage broker should never be licking the back of a stamp” Colin Lamb, Mortgage & Finance Solutions

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$4–5m “You can’t write

more than $4–5m a month doing it well and consistently without some help” Andrew Mirams, Intuitive Finance

$25m "If you’re ever

going to write more than $25m, you’ve got to get rid of paperwork” Kevin Agent, The Australian Lending & Investment Centre

$50m “I’d say you’d be

pushing it at $50m …you’d be working very, very long hours, depending on what your average loan size is and where your market is” Peter Ellis, Century 21 Home Loans

$150m “Once it gets to a

certain stage, say $150m, we work just as hard as a $50m writer or a $70m writer; it’s just that we have more support” Josh Bartlett, Loan Market Cheltenham

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Sponsored by

A BUMP IN THE ROAD After five years of successive increases, this year saw a 5% decrease in the combined value of settlements by the Top 100, to a not-insubstantial $10,148,131,878. However, this year’s No.1 broker set a new record with a staggering settlement total of $335,973,416.

Top 100 – Combined value of settlements

Top broker’s total $500,000,000

$12,000,000,000 Top 100 – Combined value of settlements

$11,000,000,000

$450,000,000

Top broker’s total

$10,000,000,000

$400,000,000

$9,000,000,000

$350,000,000

$8,000,000,000

$300,000,000

$7,000,000,000

$250,000,000

$6,000,000,000

$200,000,000

$5,000,000,000

$150,000,000

$4,000,000,000

$100,000,000

$3,000,000,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

$50,000,000

Productivity 24,418 loans were written by the Top 100 this year – a 7% decrease on last year – although this year’s top broker set a new record of 1,097 loans

Average loan size $459,288 was this year’s average loan size – a 1% increase – and one broker averaged over $1.5m

The $300m mark Two brokers wrote more than $300m in residential loans over the year, although the number of brokers writing $100m+ fell slightly

ANALYSIS: 2015-16 IN BROKING Numbers this year took a dip in terms of the combined value of settlements and the individual total required to make the Top 100, down from $70.7m to $64.8m this year. Is 2016 merely a bump in the road, or the beginning of a decline for Australia’s elite brokers? One huge short-term factor must be considered. Earlier this year banks cracked down on lending to borrowers with foreign incomes or based abroad. Evidently this hit some brokers hard; indeed five of our Top 10 brokers in 2015 didn’t even make it into this year’s overall Top 100. Note, however, that lending to foreign investors has not ceased altogether, and there are Top 100 brokers who still work in this space. What had an impact was the speed of changes made by the banks, often overnight, catching out brokers. Foreign investor-focused brokers may well recover, even if that market never gets back to its previous strength. APRA’s changes, on the other hand, seem to have had quite a different impact on elite brokers. Many investors, frustrated at being unable to get finance from their banks or brokers, have gone looking for investor specialists, a group that includes this year’s top broker.

Other investors, sensing opportunity, have decided now is the time to buy, with a little help from their brokers. Less positively, many brokers told MPA that APRA’s changes had increased the work required on each loan, with repercussions for profitability and brokerage structure. Australia’s housing market growth is slowing, and our Top 100 are not immune. The average loan size written by this year’s Top 100 broker has barely increased, by just 1% – a figure that reflects the mixed fortunes of Australia’s housing markets. Looking at CoreLogic’s Home Value Indices, we find that the year-on-year rate of growth fell in Sydney from 18% in July 2015 to 9% in July 2016, and in Melbourne from 11% to 7.5%; prices fell even faster in Perth, accelerating from -0.3% to -5.6%. Slowing growth does not equate to a decline, and so while there’s still growth we’d expect to see the Top 100’s numbers increase next year. That assumes, of course, no further bank lending restrictions – not to mention changes to broker commissions – but with increasing concerns over apartment oversupply in capital cities, next year’s Top 100 look unlikely to have a smooth run.

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SPECIAL REPORT

TOP 100 BROKERS

80-46 WASTING NO TIME An MPA Young Gun in 2015, Holly Bundy has risen extraordinarily quickly to get to 66th place. Based in Melbourne, Bundy Financial mainly deals in residential lending but also has a presence in commercial and asset finance. Bundy is also a supporter of local charities, including the Heart Kids charity and the Royal Children’s Hospital in Melbourne, and has been a finalist in the Australian Mortgage Awards.

TIME TO REBUILD In 58th place, David Thomas is a director of Trilogy Funding, an MPA Top 10 Independent Brokerage, and a specialist in property investors. After a tough year coping with APRA changes, Thomas’s success – jumping 35 places since 2015 – suggests that property investors are back on the up. Indeed, Thomas told MPA that he was preparing for the release of pent-up investing demand over the next 12 to 24 months.

ON THE ROAD AGAIN It’s certainly been a good year for mobile brokers, with five in the Top 100, and Trevor Ryan is leading the pack. In clinching 51st place Ryan has not only defied the time challenges of mobile brokers but also the low average property values that hold them back, as his clients are based along the Sunshine Coast. If that wasn’t enough, Ryan is also one of the fastest risers in this year’s list, improving 48 places on his 2015 performance.

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MPA TOP 100 BROKERS: 80-46 Rank

Name

Company

State

Total value of residential loans FY 2015/16

Total number of residential loans FY 2015/16

80

Quentin Grofski

Aussie Morley

WA

$72,070,754

212

79

Peter Goldberg

Pinnacle Capital

NSW

$72,606,859

131

78

Mathew Crossley

Coronis Mortgage and Finance

QLD

$73,555,774

292

77

Paul Wright

Choice Home Loans Woolongong

NSW

$74,558,638

336

76

Pamela Mangafas

Aussie Narellan

NSW

$74,735,757

174

75

Mario Borg

Mario Borg Strategic Finance

VIC

$74,923,823

133

74

Norm Moon

Aussie (mobile broker)

NSW

$75,460,491

171

73

Natalie Tinecheff

Q Mortgage Australia

WA

$75,757,821

188

72

Mohammed Azeem

Mortgage Choice Carnes Hill

NSW

$76,219,956

182

71

Alex Ralec

Aussie Mona Vale

NSW

$76,457,149

132

70

Deanna Ezzy

Trilogy Investment Property Funding

ACT

$76,584,841

247

69

Leigh Deledio

UFinancial

VIC

$78,666,992

157

68

Anthony Knight

Mortgage Choice Erina

NSW

$78,944,596

243

67

Neil Christie

Aussie Oxenford

QLD

$79,266,183

195

66

Holly Bundy

Bundy Financial Services

VIC

$79,600,000

206

65

Cameron Morgan

UFinancial

VIC

$80,663,400

185

64

Theo Chambers

Shore Financial

NSW

$81,000,000

106

63

Vivian Wei Wang

V Money

VIC

$81,362,168

128

62

Tim Leonard

Broad A Scope

VIC

$81,820,582

176

61

Kevin Gomer

Nicheliving Home loans

WA

$82,526,687

218

60

Angelika Darbinian

Aussie Crows Nest

NSW

$83,076,828

94

59

Serge Scekic

Aussie Balgowlah

NSW

$83,248,658

153

58

David Thomas

Trilogy Funding

NSW

$83,356,577

311

57

Marios Rokka

Loan Market North Melbourne

VIC

$83,576,662

210

56

Andrew Baker

Port Finance Group

VIC

$83,808,318

147

55

Ron Lloyd

Aussie Toukley

NSW

$84,059,914

226

54

Matt Mannaert

Acceptance Finance

VIC

$84,143,753

205

53

Stephen Lemm

Mortgage Choice Neutral Bay

NSW

$84,456,612

151

52

Brett Compton

Oxygen Home Loans

NSW

$84,998,331

208

51

Trevor Ryan

Aussie (mobile broker)

QLD

$85,572,043

251

50

Sahdeo Singh

RDN Mortgages

NSW

$87,000,000

195

49

Andrew Kelly

Anasta Finance Consulting

NSW

$88,380,460

154

48

Ian Simpson

Smartline Balmain

NSW

$88,404,285

175

47

Cameron Stillman

Picket Fence Finance

VIC

$89,735,294

137

46

Darren Comerford

Mortgage Choice Arundel

QLD

$90,941,070

312

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Sponsored by

WHERE THE POWER LIES Judging by this year’s Top 100, the lights are going out all over Australia: only NSW, Vic, Qld, WA and the ACT were represented in this year’s Top 100. While we had applications from brokers based in the NT, SA and Tas, these brokers lost out due to a combination of low populations and thus fewer potential clients (particularly in the NT), struggling economies and low average property prices. Indeed it is essential to look at property prices to understand why NSW still leads the pack. Victorian brokers are writing huge numbers of loans, but with the average property price in mid-2015 being $200,000 lower, these brokers were at a disadvantage. Nevertheless, the impact of location should not be overstated: increasingly, top brokers deal with repeat clients nationwide, and so are less affected by regional developments.

Number of brokers Median capital city dwelling price, July

Western Australia

9 brokers $515,000

Queensland

0 brokers $525,000

13 brokers $458,200

Colin Lamb, Mortgage & Finance Solutions

George Samios, Madd Loans

New South Wales

47 brokers $790,000 Justin Doobov, Intelligent Finance

South Australia

0 brokers $400,000

(Source: CoreLogic Home Value Index, July 2015. Note: Figures refer to capital city, not entire state)

Victoria

29 brokers $568,000 Mark Davis, The Australian Lending & Investment Centre

2016 Top Broker

REGIONAL BROKERS

ACT

2 brokers $548,200

Tasmania

0 brokers $305,000

David Thomas, Trilogy Funding

AGGREGATORS IN THE TOP 100

Last year we were asked to look at those regional brokers in the Top 100. Regional brokers face specific challenges, including a much lower average dwelling price – just $358,000, according to Corelogic’s ‘Rest of State’ measure in July 2015, for instance. We used the official list of regional postcodes drawn up by the Australian Department of Immigration and Border Protection, and compared brokers’ postcodes with this measure. We found that only two brokers in the Top 100 qualified as regional brokers: Colin Mason, SMS Finance, Maroochydore, Qld

Northern Territory

Trevor Ryan, Aussie Home Loans, Sunshine Coast, Qld

If you’re a regional broker writing good numbers, we urge you to apply for next year’s Top 100.

Largest franchises 21

13

3

Aussie Home Loans

Mortgage Choice

Loan Market

19

16

11

Connective

AFG

FAST

Largest wholesale aggregators

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28/10/2016 12:42:36 PM


SPECIAL REPORT

TOP 100 BROKERS

45-11 ON THE FAST TRACK Jumping from 96th in 2015 to 43rd this year – an astonishing 53 places – Mortgage Choice’s Leanne Scott is the fastest riser in this year’s Top 100. In fact Scott has been winning awards since 2005, when she was MFAA National Originator of the Year and a finalist for the Telstra Business Woman of the Year award. In 2013 she was recognised as Franchise Broker of the Year at the Australian Mortgage Awards, and this year’s result suggests there could be many more accolades in the future.

THE $1.5M LOAN MAN The broker behind this year’s highest average loan size – $1,525,806.45 – is Chris Foster-Ramsay of Foster Ramsay Finance, who clinched 40th place this year. Foster-Ramsay set up the brokerage in 2012 and aims to be a “professional resource” for its clients, similar to a solicitor or accountant. Foster-Ramsay is also a regular media commentator who has made several appearances in the Australian Financial Review.

YOUNG GUN EXTRAORDINAIRE George Samios will be gutted to have missed out on the Top 10 by just $100,000, but this year is still a huge step up for the Qld-based Madd Loans founder. Furthermore, Samios, who is in his 20s, is one of the two youngest brokers in this list and a fantastic example to young professionals considering joining the industry.

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MPA TOP 100 BROKERS: 45-11 Rank

Name

Company

State

Total value of residential loans FY 2015/16

Total number of residential loans FY 2015/16

45

Josh Egan

Astute Financial Melbourne City South

VIC

$91,848,337

304

44

Luke Torossian

Aussie Engadine

NSW

$93,118,391

172

43

Leeanne Scott

Mortgage Choice North Sydney

NSW

$93,573,807

233

42

Daniel Hustwaite

Aqua Financial Services

VIC

$94,136,917

269

41

Ryan Ewart

R Ewart & N.J Newham

NSW

$94,571,028

193

40

Chris Foster-Ramsay

Foster Ramsay Finance

VIC

$94,600,000

62

39

Shareek Mohammed

Aussie Liverpool

NSW

$95,400,000

228

38

Raymond Teh

Mortgage Choice Pyrmont

NSW

$98,888,315

229

37

Scott Partridge

Mortgage Choice Baulkham Hills

NSW

$99,186,160

214

36

Peter Gwynne

Choice Home Loans Varsity Lakes

QLD

$100,000,000

279

35

George Kanellis

CFC Finance

NSW

$101,892,310

292

34

Andrew Heath

Mortgage Choice Richmond

NSW

$102,730,949

337

33

Dean LaFrenais

InReach Finance

WA

$103,000,000

320

32

Matthew Dwyer

Yellow Brick Road Penrith

NSW

$103,240,963

274

31

Mark Polatkesen

Mortgage Basics

VIC

$105,400,000

339

30

James Chatfield

Chatfield Consulting

WA

$107,797,398

256

29

James Henwood-White

eSelect Finance

VIC

$108,298,844

211

28

Richard Pusey

Switch Now Home Loans

VIC

$108,500,000

279

27

Vishal Gupta

Unique Finance Services

NSW

$108,656,937

266

26

Thomas Hawley

Shore Financial

NSW

$109,033,000

118

25

Darryl Bevan

Direct Financial

WA

$112,217,610

339

24

Deslie Taylor

Mortgage Choice Ormeau

QLD

$118,089,667

394

23

Matt Carr

MC Mortgage Solutions

QLD

$118,412,800

388

22

Lloyd Thomas

Direct Property Network

NSW

$119,503,844

287

21

Andrew Algie

AddisonsAdvisory Group

NSW

$119,680,000

274

20

Rael Bricker

House & Home loans

WA

$121,000,000

320

19

Rachelle Eyndhoven

Sphere Finance

NSW

$124,000,000

282

18

Ross Le Quesne

Aussie Parramatta

NSW

$125,413,388

356

17

Navjeet Matta

Gain Home Loans

NSW

$135,059,029

328

16

Charlie Zhu

Mortgage Choice Sunnybank Hills

QLD

$137,839,775

362

15

Matt Cunliffe

Mortgage Choice Brisbane City

QLD

$140,991,029

339

14

Glenn English

Aussie Carnegie

VIC

$142,118,066

326

13

Anthony Alabakov

My Mortgage Freedom

VIC

$146,400,000

204

12

Colin Mason

SMS Finance

QLD

$147,505,292

411

11

George Samios

Madd Loans

QLD

$151,714,027

346

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28/10/2016 2:03:59 PM


Sponsored by

WOMEN IN THE SPOTLIGHT While the number of female brokers in the Top 10 has barely changed, at 11 compared to 12 last year, there are grounds for optimism. This year’s contingent includes a number of new entrants, including AMA and MPA Young Guns as well as mid-career brokers who have established regular places in the Top 100.

Rank Name

Company

Total value of Total number of State residential loans residential loans FY 2014/15 FY 2014/15

19

Rachelle Eyndhoven

Sphere Finance

NSW

$124,000,000

282

24

Deslie Taylor

Mortgage Choice Ormeau

QLD

$118,089,667

394

43

Leeanne Scott

Mortgage Choice North Sydney

NSW

$93,573,807

233

60

Angelika Darbinian

Aussie Crows Nest

NSW

$83,076,828

94

63

Vivian Wei Wang

V Money

VIC

$81,362,168

128

66

Holly Bundy

Bundy Financial Services

VIC

$79,600,000

206

70

Deanna Ezzy

Trilogy Investment Property Funding

ACT

$76,584,841

247

73

Natalie Tinecheff

Q Mortgage Australia

WA

$75,757,821

188

76

Pamela Mangafas

Aussie Narellan

NSW

$74,735,757

174

83

Pei Chen

Aussie (mobile broker)

NSW

$69,435,869

151

86

Sharon Bal

Loan Market Cannington

WA

$68,000,000

201

LEADING LADIES As Young Gun of the Year at the 2015 Australian Mortgage Awards, Rachelle Eyndhoven certainly had promise, but this year’s 19th place result shows the Central Coast broker has truly arrived. The result is even more incredible given that Eyndhoven only left her BDM role to set up Sphere Finance in 2013. Vivian Wei Wang is establishing herself as a Top 100 regular, as this is her third appearance. V Money was set up in 2009 and serves a largely Asian client base of property investors, working closely with accountants and taxation lawyers for a strategy-based approach.

10

COLIN LAMB Mortgage & Finance Solutions Doubleview, WA Aggregator: LoanKit/Finsure Total value of residential loans FY 2015/16: $151,802,056 Total number of residential loans FY 2015/16: 323

Colin Lamb is back in the big league – not that he ever really left. After topping the list in 2013, when he was also named Broker of the Year in the Australian Mortgage Awards, Lamb had two quieter years in which he still wrote substantially over $100m in loans. What makes Lamb’s success this year particularly interesting is that he’s added over $40m to his total in a year in which WA’s housing market and wider economy took a turn for the worse. “It’s been tough in WA”, Lamb reflects. “There’s a lot of clients shifting and defaulting because of the loss of a job and things like that. The last 12–18 months hasn’t just been writing business; it’s been looking after people who’ve been in trouble.” Lamb has a number of other tasks besides this: guiding his new real estate business The Agency, his broker marketing business Your Client Matters, and taking on a new telesales staff member. Having full ownership of The Agency, he says, has “basically allowed us to have a bit more control over where business is coming from, and set KPIs for the agents to refer”. Meanwhile, the new telesales staff members have been getting back in contact with old clients and generating repeat business. Lamb has been “reaping the rewards” of this combination of changes, he explains. Running multiple businesses while writing loans requires support, and Lamb is one of an increasing number of brokers outsourcing loan lodging and compliance. He also has two PAs and another supporting staff member. Other brokers should do the same, he urges: “Anyone who’s writing over $3m a month should be considering a PA, whether part-time or even sharing a PA with somebody. I’ve had PAs for the last 10 or 12 years, and basically a mortgage broker should never be licking the back of a stamp.” Not licking stamps frees up Lamb to talk to current and potential clients, not just as an initial appointment but throughout the loan process. Being able to face the client throughout the process, including document sign-up, has direct benefits for leads, he says. “I did one this morning and already got a referral from that … every broker that doesn’t do doc sign-ups doesn’t deserve those referrals because it’s not full service.”

www.mpamagazine.com.au

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28/10/2016 12:45:11 PM


SPECIAL REPORT

TOP 100 BROKERS

9

DANIEL O’BRIEN PFS Financial Services Bella Vista, NSW Aggregator: PLAN Total value of residential loans FY2015/16: $155,437,380 Total number of residential loans FY2015/16: 422

Some brokers aspire to international prominence, but Daniel O’Brien’s reach is somewhat more tangible: “Put a pencil on Bella Vista, draw a 30-minute drive circle around it, and that’s where our clients are based,” he says. PFS Financial Services has a mixed group of clients, from blue-collar workers to professionals, and home loans remain the brokerage’s bread and butter although they’re beginning to write more commercial and asset finance business, O’Brien says. The main change last year was putting on an extra staff member, freeing up a more senior staff member to spend more time talking to clients, and improving the level of service. What enables a relatively unspecialised brokerage like PFS to write such numbers is a highly effective office structure. O’Brien gets the deal in the door, talks to the clients, and structures the loan. Then he hands it on to his business partner Josh and his team. “I get the clients in the door; once the deal is structured, I’ve done my cover notes, I’ve essentially wrapped it in a little bow from my staff, I don’t touch it from there. I don’t speak to banks; I just speak to the client, and keep them updated.” For 90% of loans, O’Brien doesn’t need to spend any more time on the deal; his team process the loan and chase up the banks. This system rests on trust: O’Brien had known his business partner for 14 years before he took him on. Nevertheless, not having supporting staff, O’Brien believes, is “not sustainable for a long period of time, depending on what your average loan size is”. Brokers should be cautious in taking on more staff, O’Brien argues. “It’s better to get to a point that warrants support staff rather than getting somebody in and hoping to get to the next level. There are people with families and responsibilities and you don’t want to bring them in on a whim and fail.” In the case of PFS, O’Brien set himself a goal in terms of a client database size and trail income that could cover Josh’s wage and basic office costs before expanding. Trail is crucial, says O’Brien, because “whether I have a good month or a bad month the trail income is still there”.

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8

ANDREW MIRAMS Intuitive Finance Sandringham, Vic Aggregator: Connective Total value of residential loans FY2015/16: $164,988,544 Total number of residential loans FY2015/16: 344

For top businesses, chaos can provide opportunities, as Andrew Mirams' increased volumes demonstrate this year. Crackdowns on investment lending are driving more clients to Intuitive Finance, and although the brokerage remains relatively specialised in high net worth investment lending, Mirams says he can’t rest on his laurels if he is to keep up with demand. “I’m looking at my business growth plan and in the next year or two we’ve got a couple more back-office staff coming and then, in the next 12 to 18 months, [getting] a general manager to run staffing is high on the agenda to free me up to do what I’m good at, which is business development and client relations.” Getting people to do what they do best is central to Mirams’ management of the brokerage. When a client approaches Mirams, his EA will get the client’s information up front. Mirams and his senior analyst then take that information, structure the loan and pass it to the client services team, which in most cases do the processing without Mirams’ involvement, he explains. “I can process a loan, but I don’t do any of that any more.” Brokers need to take a critical look at their own skill set, Mirams believes. “If you think you can do all of these jobs and write good volumes, then you’re kidding yourself; we all have different strengths and weaknesses … you need to get people who can complement and help grow the business and have strengths that aren’t the same as yours.” Taking on staff in order to grow the brokerage is a leap of faith, Mirams admits, one that is made easier for brokerages like Intuitive Finance with its growing number of leads; he now only hires full-time staff. As well as more back-office staff and management support, Mirams wants to give the other brokers at Intuitive Finance a greater role. “We’re starting to diversify our offering out there; it’s nice to be up there, but to be strong it doesn’t have to be me writing the loans.” Growth is crucial to stay ahead of the competition, Mirams argues. “It’s getting a separate set of eyes across things: making sure we’re having more contact, not less … it’s having enough staff here so that the client feels like they’re the only client of Intuitive Finance.”

www.mpamagazine.com.au

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28/10/2016 12:45:20 PM


Sponsored by

7

JASON GUO Centum Mortgage Group Melbourne, Vic Aggregator: Vow Financial Total value of residential loans FY2015/16: $165,400,000 Total number of residential loans FY2015/16: 337

MPA’s Young Guns report recognises the best new entrants to the industry; the MPA Top 100 recognises the best in the industry full stop. The two are at different ends of a broker’s career path, yet Jason Guo has made the jump in a single year, appearing in February’s Young Guns report and now, in November, competing at the highest level. Centum Mortgage Group was set up in 2012, and Guo took over as managing director in 2015. The brokerage specialises in residential and investment finance for professionals, particularly doctors, and the self-employed, with the remaining 50% being a broad spectrum of local PAYG clients. Doctors in particular have become a profitable niche for many leading brokers, but as Guo explains you need to put the work in. “When I started in the mortgage broking business I focused on building up relationships with the business partners, such as the doctors’ association, which brings professional doctors to us, as well as accountants and financial planners.” In January the brokerage saw a major shift as Guo transitioned his team of four supporting staff to a new processing model. Previously the brokerage had a conveyor-belt style model: each staff member took on a different stage of the application. “We found this model doesn’t help efficiency,” says Guo. “If the case transitions from one person to another person, that other person needs to look through the case again.” Now each staff member handles a single file from beginning to end, making them more accountable and helping their training, given that some supporting staff want to become brokers. Guo conducts the initial contact and interviews, and he brings supporting staff members into those interviews to acquaint them with the clients. Guo then checks the progress of the application on a daily basis. The brokerage is continuing to grow, Guo explains. “This year we’ve not just been focused on writing loans; we’ve been focused on growing the business.” They’re taking on bilingual staff and have a highly structured training model in place. And while a $165m total is hugely impressive, Guo is bullish about the year ahead: “I’m confident we can beat that number in the next financial year.”

6

JOSH BARTLETT Loan Market Cheltenham, Vic Aggregator: Loan Market Total value of residential loans FY2015/16: $166,000,000 Total number of residential loans FY2015/16: 390

Currently Australia’s most decorated franchise broker, Bartlett has been in the spotlight for so long it’s surprising to learn that this is his first year in the Top 10. It’s been a long-held ambition of his. “When I started five years ago I kept looking at these MPA results and thinking, ‘You know what, I can do that’.” Much of Bartlett’s approach to broking has been extensively discussed: his alliances with real estate agents, his referral tracking apps. But less is known about his use of support staff. Bartlett has three loan processors, one tracker and a part-time prospector, and he’s aiming to grow this group. “Every year my whole goal, as soon as my trail goes up, is to hire more people.” The goal of hiring staff is to allow Bartlett to do what he does best. “If I’m doing things that aren’t sitting in front of people, then I’m not creating business.” That means not only client interviews but making the initial contact with referred clients. “A lot of brokers who do get busy get their PAs to make those phone calls … my team are so skilled at what they do that it allows me to make that phone call to that client.” Bartlett’s team can handle processing and client contact after the initial interview, and he intends to upskill them further, to keep the team motivated. Additionally, having built up a level of trust among referral partners, Bartlett doesn’t need to sit down with them so regularly. These developments have allowed him to change the ratio of effort to outcome. “A lot of brokers say, ‘I don’t want to work as hard as you’… but I can assure you, once it gets to a certain stage, say $150m, we work just as hard as a $50m writer or a $70m writer; it’s just that we have more support … I wrote $166m easier than I wrote $70m.” Rather than waiting for the trail income to build, new brokers should hire staff now, Bartlett believes, and more experienced brokers should concentrate on training their staff. Changing one’s mindset is hard but necessary, Bartlett concludes. “I sometimes stress if my phone’s not ringing, but if my phone’s not ringing, my staff are doing their job.” www.mpamagazine.com.au

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28/10/2016 12:45:52 PM


SPECIAL REPORT

TOP 100 BROKERS

5

PETER ELLIS Century 21 Home Loans Sydney, NSW Aggregator: AFG Total value of residential loans FY2015/16: $172,617,259 Total number of residential loans FY2015/16: 214

It’s taken Peter Ellis a decade to get back to fifth place, but he’s done it. One of the longest-standing Top 100 brokers, Ellis runs two businesses – his Century 21 broking franchise, using referrals from the real estate group, and Ellis Financial, for other business – along with part-owners Russell and Libby, who he’s worked with for 10 years. This year saw a major change: taking on a new, salaried support staff member, Irene, resulting in a $25m jump in volumes. “Adding another member to the team allowed me to build our referral network and concentrate on growing the business,” Ellis explains. “That was the key: just adding one member.” Getting that extra capacity was crucial for Ellis as he not only writes loans but also trains up new-to-industry brokers who sit in Century 21’s offices. “I think if I wasn’t training, we could have got to $200m. But the long-term goal is for other brokers working here to get traction within the network, and it’s too big for me individually.” Changing regulation has moved the goalposts, Ellis believes, and made having support staff more important than ever. “When I first started I remember a broker could do the whole lot and write significant volume.” Indeed Ellis wrote $86m without support staff before the NCCP changed everything. “When that compliance came in our volumes dropped by 30% ... it took us 12 months to recover and get the right processes in place.” Today a broker working extremely long hours by themselves could manage around $50m, Ellis estimates, depending on their location and average loan size. After years of working with a tight-knit team, Ellis now sees a bigger team as a prerequisite to further expansion. “We want to have the existing people in place so I can go out there and have confidence that when I bring the business in we’ll be able to cope with it. We’ve been under-resourced for a long period of time and it came to the point where I did need to put some salaried staff on to really grow. And I think our results hopefully should be stronger next year.”

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4

KEVIN AGENT The Australian Lending & Investment Centre Melbourne, Vic Aggregator: Connective Total value of residential loans FY 2015/16: $177,627,880 Total number of residential loans FY2015/16: 707

As Australia’s No. 1 brokerage, The Australian Lending & Investment Centre has had no shortage of summit appearances, interviews and exposure in recent years. What’s occasionally forgotten is ALIC is not a one-man band; in fact ALIC has three brokers in this year’s Top 100, with brokerage co-founder Kevin Agent in the Top 10 bringing his own version of the brokerage’s investor-centred approach. ALIC’s structure is akin to a web, with a broker sitting at the middle, referring clients to other specialists as part of a holistic investment strategy. “I see our role not as lenders but as educators,” Agent explains. “We should be teaching our clients how to borrow properly, put them in contact with the right people, and when we’ve done all that, at the end of the process, out pops a loan. The loan should be the last thing that happens, but most brokers make it the first thing that happens.” This approach does take up a lot of time, even on lower net worth clients, and so freeing up the broker’s time is vital. This means bringing in support whenever possible, Agent says. “Our role is to do the strategy and structure, and once we can’t add any more to the client in terms of processing … we push it off to someone who’s much better at processing.” He has one EA and one analyst and is looking at getting another analyst to cope with rising volumes. Moreover, Agent also has access to the resources of the brokerage: a 15-strong back office, plus the expertise of other expert brokers – and the brokerage is constantly hiring (and firing). “Historically, within this business what we’ve always said is, if we find the right person and they’re a good fit for the business, we’ll find a role for them, but if we can’t find the right person we won’t appoint for the sake of appointing,” Agent explains. Finding the right people is difficult, nevertheless, as the pace of ALIC – investment brokers are expected to write $80m a year – is too much for many to handle. Ultimately, while the numbers are important for Agent, he believes that a broker’s role needs to be broader. “It’s different to banking: for me, these are relationship roles; they’re not just flogging products.”

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28/10/2016 2:00:06 PM


Sponsored by

3

LOUIS KOVANIS Genius Loan Solutions Pty Ltd Kogarah, NSW Aggregator: FAST Total value of residential loans FY2015/16: $186,000,000 Total number of residential loans FY2015/16: 162

In 2014 Louis Kovanis burst onto the broking scene, clinching eighth spot with no staff but a secret weapon: a client base of medical professionals. In 2016, Kovanis is still in the Top 10 but now in third place: evidently doctors, unlike other types of clients, are no one-hit wonders. Kovanis continues to exclusively specialise in medical professionals for a good reason. “These doctors have an insatiable appetite for debt, insatiable!” Lenders have long had favourable policies for medical professionals, but in recent years have been increasingly bullish in increasing their exposure in this space, according to Kovanis. That also means recent lending changes left Kovanis and his clients entirely unscathed. “The banks’ policies towards medicos are unchanged: they lend them 90% with no LMI still … the banks have done a massive study into the healthcare sector and discovered they are really AAA; they’re rock solid. Therefore their credit policy hasn’t altered.” What has altered is Genius Loan Solutions. Moving to Kogarah in early 2015 hit Kovanis’s volumes but is now paying off, he says. “It’s dramatically increased my footprint in the Kogarah area, because it’s very much dominated by medicos … word of mouth has increased dramatically.” Additionally, after a career as a lone broker, Kovanis has taken on a supporting staff member, William, who approached Kovanis after eight years at a bank. Kovanis is finding that a hands-off approach to management is working well. “I had a person who was in a big corporation, in a box, and now I’ve made him autonomous and made him feel like he’s got his own little business within my business.” With William taking care of more of the back-office work, it’s freeing up Kovanis. “It’s enabled me to market my services and get out there and write more business.” Medical professionals may appear to be a broking gold mine, but they’re a hard one to reach, with strong links to private bankers and little time or patience for brokers, Kovanis warns. With a vast number of potential clients he’s aiming to write $250m over the 2016/17 financial year, and compete with Australia’s biggest brokers and brokerages. “I want to be No. 1 next year; that’s my target.”

2

JUSTIN DOOBOV Intelligent Finance Sydney, NSW Aggregator: Choice Aggregation Total value of residential loans FY2015/16: $322,225,177 Total number of residential loans FY2015/16: 695

When Doobov broke the $300m barrier last year it would have been reasonable to assume that would be his peak – Intelligent Finance remains a small brokerage, with Doobov the only broker. Yet Doobov, who was named Broker of the Year at the Australian Mortgage Awards, has made a career through an intellectual approach to the industry, constantly analysing how its boundaries can be pushed. Fittingly, he’s added another $7m to his annual total, taking it to over $322m. This year’s innovations have been focused on eliminating any gaps between Doobov and his staff, he explains. “We’re more in sync with each other, so the time taken per application is a lot less and the handover between me and my admin team is a lot smoother.” The brokerage’s focus has also turned to existing clients, Doobov adds. “Whilst we haven’t increased volumes as much as we wanted to, it’s great to remain consistent on new business whilst dramatically improving the way we serve existing clients.” Doobov has seven supporting staff members, and their performance is integral to his own. Consequently they constantly reassess how they work together. “Every week we look at the admin work I’m doing on a deal and try to work out how the admin guys can take that off me; some of the emails I send to clients, chasing clients for documents – pushing that down the line.” This approach even applies to more complicated scenarios, Doobov says. Although the client base is similar to previous years, the lending landscape has shifted around the brokerage, with changes by APRA and the banks having very tangible consequences. “The customer gets the same result, but behind the scenes there’s a lot more admin work required per application; it’s put more cost on the business.” With huge volumes coming through the door, meeting staff costs isn’t a challenge; in fact the reverse equation applies. “The more staff I have the better I can service a client, which means there’s a high chance they’ll refer me to somebody else.” Pushing boundaries, Doobov says, is the best way to raise performance. “Now’s the time to work harder at whatever you do, whether it’s seeing more clients; doing that extra 1–2%; seeing an extra client per week; making one extra phone call a day.”

www.mpamagazine.com.au

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SPECIAL REPORT

TOP 100 BROKERS

6

MARK DAVIS

Aggregator

Connective

Total value of residential loans FY2015/16

$335,973,416

Total number of residential loans FY2015/16:

1,097

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The Australian Lending & Investment Centre Melbourne, Vic You’ve probably guessed it by now: the Top 100 Brokers is about numbers. That doesn’t just mean a broker’s end of financial year result, but also the way numbers can be used to transform a business – and 2016’s No. 1 broker encapsulates this perfectly. After four years Mark Davis is back in the top spot, having used statistics to improve his own approach to broking, and that of his brokerage. Triumph in 2016 has its roots in 2015’s disappointment, Davis recalls. “Last year two people wrote over $300m and I thought, wow – but there must be a way of doing this.” Setting himself $300m as a target, he brought the numbers down, with the principal number being appointments; brokers need to do the appointments themselves to claim a loan. Davis’s work ethic and long hours are already legendary in the industry, but even he has a limit. “I was doing 54 appointments a week at one stage, and I did that for three weeks in a row, and it absolutely slaughtered me.” Settling on 40 appointments per week, an average of 2.2 per client, Davis turned his focus to delegation. “How do you get people to take the work away from you so you can do the appointments and service your clients?” Davis spends around two to three hours on each deal before handing his notes to his two “second-in-commands”, who spend another two hours converting the file into a format that can be handled by ALIC’s 15-strong back office. With this method Davis wrote an astonishing 1,097 loans this year, more than any other broker by a huge margin. It’s not a structure that can be applied to all brokerages. ALIC’s focus on property investors puts certain demands on its brokers. Investor clients bring with them the advantage of regular transactions, and ALIC looks to sign them up and get them committed early on. However, this commitment applies in both directions: David could have several meetings with a client over two years before they actually borrow anything. That said, having a client base of serious

investors has insulated ALIC from APRA’s changes, Davis explains. “When the markets get tough, if you have the right investor clients that’s when they come and play … real investors invest in all markets, but they just know which products to invest into.” ALIC, as Australia’s No. 1 Independent Brokerage, gives Davis certain advantages, but being one of the co-founders of the business imposes certain management and mentoring responsibilities, and Davis is developing his second-incommands to be brokers. “My job is to train them up to be investment lending managers over 18 months, and my job’s to get them to be $100m writers … that takes a lot of time off me but I’m going to get a lot of work out of them.” It also imposes a cyclical rhythm on the brokerage: in December, Davis’s second-incommands will reach their peak experience before moving on to become brokers, requiring him to have new, inexperienced assistants. Davis says he’ll soon have 10 brokers come through this route, but having so many staff in development comes at a cost. This is manageable, Davis explains. “There’s a big cost, but you’ve got that trail coming through, and the book’s about $2.4bn now … even if it drops 30% with the second-in-commands coming through, there’s no pressure on us.” For serious brokers it’s not much of a choice, he insists. “As a broker you’ve got to back yourself … you have to get a support person; you’ve got to get rid of the non-value items.” Despite the mentoring, despite the process and the team, Davis still works tremendous hours. This is unavoidable for brokers at the top for one simple reason, he says: “Customers want to talk to you. They want to talk to me about the lending structure and how we’re going to set up the loans; they want to talk to my other staff about finalising that structure; paperwork, timeframes, refinances, getting transfers of land. We’ve got to be there for the meaty stuff.”

“You’ve got to get rid of the non-value items”

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Sponsored by

Mark Davis (right) is presented the trophy by Steven Degetto, head of Suncorp Bank intermediaries, Suncorp Group

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28/10/2016 12:46:08 PM


FEATURES

DIVERSIFYING INTO RESIDENTIAL LENDING

Coming full circle Top commercial brokers are increasingly looking to diversify – into residential lending. MPA has partnered with FAST to find out how a brokerage can excel in both sectors DIVERSIFICATION HAS typically been seen as a one-way street: experienced residential brokers ‘future-proofing’ their businesses with other revenue streams. Yet increasingly, top commercial writers are also looking to diversify and they’re looking at residential lending – including MPA’s 2016 No. 1 Commercial Broker George Karam of BF Money and Top 10 Independent Brokerage Right Angle Group. They’re not alone, says FAST’s head of the northern region, Rob Ryan. “We see it growing more and more.” While FAST has been vocal about getting residential brokers to try commercial lending, it is also finding that its experienced commercial broking members aren’t content to rest on their laurels. The reason for this has little to do with market strength; indeed after years of lagging behind residential, commercial lending has emerged as a seriously profitable space for brokers to play in. MPA and FAST have teamed up to answer those big questions: why would commercial specialists want to move into an increasingly crowded residential lending market, and how can they do it? Having written $278,920,637 worth of commercial loans in 2015/16, BF Money boss Karam seems to have the least reason to move into residential lending. But the brokerage has always had a white label residential lending operation, and Karam is looking to open the panel to other lenders as

part of a broader expansion. “There’s been a shift to be more of a holistic property finance provider rather than a transaction broker; we don’t want to exclude any of the property finance needs our clients have.” BF Money is the result of a rebranding (the brokerage was previously called Byblos Finance) accompanied by a move to a new office in Sydney’s west. Brand matters, explains Karam, as does being honest about that brand. “We don’t promote ourselves as a purely commercial broker; and we don’t promote ourselves as just a mortgage manager … we’re a specialist property

DIVERSIFICATION BY THE NUMBERS According to the MFAA, in the six months to March 2016:

1,673

brokers wrote a commercial loan

$5.9bn

total value of commercial lending

$3,522,405 average value of commercial loan

FAST claimed that its brokers captured 45% of the commercial loans originated by brokers in the first half of 2016, and that residential settlements had topped $1bn a month for the 15th month in a row. It says:

60%

of FAST brokers now offer an additional service outside of residential finance

lending by $6bn business FAST brokers has doubled to $6bn in two years Sources: MFAA Industry Intelligence Service/ FAST

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Sponsored by

finance broker, and if you want to be fair dinkum about that, you have to offer a range of finance solutions. You cannot ignore residential as a commercial mortgage broker.” But rebranding or setting up a second brand isn’t essential, FAST’s Ryan explains, as commercial brokers may want to leverage off their trusted brand and existing clients in the commercial space. “Given the market is evolving into more of a customer advisory service offering, it’s best to have the one brand to cater for everything. Removing the word ‘mortgage’ allows the business to move beyond mortgages, for example … and to be allinclusive with a brand.” A commercial broker’s existing client base provides an easy and less risky way to move into residential broking, according to Ryan. However, fraudsters and financial crime are a concern, he warns. “My tip would be they need to stick to known referral sources and be wary of customers that approach them from out of their home state and out of the country, because new players in residential lending can be targeted sometimes.” A common solution to this problem is to bring an experienced residential broker or loan writer into the office. This was the route taken by Brisbane-based Right Angle Group, director Guy Hewartson told MPA when interviewed for our Top 10 Independent Brokerages feature. “We probably weren’t very good at residential lending … we made the decision that we had to get someone in our business who knew what they were doing, which we did, and it has been hugely successful.” Alternatively, you need to upskill yourself and your team, as Karam has found. “Just because you do commercial doesn’t mean that you can do residential well, and vice versa. While the skill set is complementary, it’s not quite the same.” Knowledge of NCCP regulation, responsible lending and application software is essential, Ryan says, especially as the latter is now the only way to apply for residential loans in many cases. Brokers shouldn’t feel they’re alone, Ryan observes. “We’ve got very skilled partnership

SPONSOR’S MESSAGE FAST has been supporting businessminded brokers through commercial and asset finance as well as residential lending for the past 16 years. Through this time the industry has evolved, and continues to present exciting opportunities along the way. We aim to provide the best possible products and support to help our brokers grow their businesses across multiple revenue streams, whether that’s from residential into commercial or vice versa. To cut a long story short, commercial and residential loans needn’t be mutually exclusive. As an advocate of diversification, FAST is proud to partner with MPA to bring you this dedicated report. I hope you find it valuable and useful to your business. Rob Ryan, Head of northern region, FAST

managers that can help brokers identify the right structure and help resource it.” FAST facilitates meetings between top commercial brokers and suitable residential lenders that suit its value proposition. It can also introduce brokers to compliance companies to help them make the transition to the more regulated residential sphere; FAST uses QED Risk Services. Whether you’re a commercial broker looking at residential, or a residential broker looking to diversify, it’s vital to recognise how additional services can aid your core business. As Karam sees it, “[residential] is not an add-on; it’s one of the significant pillars of the business”. Offering additional services helps protect what you do best, Ryan concludes. “If a commercial broker isn’t offering residential lending into their stream of business, the chances are that another commercial broker may be, so the customer may go to another broker for this solution, and they may lose the customer from their core business.”

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PROFILE

GREG WELLS

GREG WELLS: FOUR DECADES OF WISDOM A three-time AMA winner and industry veteran celebrating his 40th year in finance, Greg Wells isn’t slowing down yet, writes Maya Breen

LISTENING TO one of Australia’s top veteran brokers reflecting on his journey as he reaches his 40th year in the industry is no doubt a privilege; even more so when this leader and pioneer is only looking forward, promoting the opportunities in broking to attract much-needed young talent. Greg Wells is a multi-award-winning broker and managing partner of NSW brokerage Wells Partners/Mortgage Link Group. He started out in 1976 at just 15 years of age, when the financial services industry looked very different. His first job in what would become a long and decorated career was as a batch clerk at National Australia Bank in Liverpool, where he quickly scaled the ladder in business banking to become a bank manager by his mid-20s and a senior executive by 2000. But after 25 years in banking, Wells decided the time was right to strike out on his own, establishing Wells Partners in 2001. From there he witnessed the exponential growth of the third party channel. “When I started in 2001 the market share for home loans was around 15%; today it’s 55%,” says Wells. “Commercial was virtual zero and today it’s probably around 30–35%.”

Accountant focus In developing his commercial broking model, Wells specifically targeted accountancy businesses, and today they make up 75% of

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the group’s referral partnerships, of which they have 30. “Most accountants today realise that it’s not just about doing tax returns; it’s about providing financial planning, finance and wealth management,” Wells says. “It’s very much a holistic approach that links in what has always been, in my opinion, a key influencer,” he notes, speaking of accountants being privy to a client’s ‘inner sanctum’ of decision-making. “We then become that trusted

residential loans as commercial, but Wells explains that the commercial dollar figure is often about five times the size of the average home loan. “So we’re spending more time on home loans than commercial, but because I’ve been at the beginning of commercial … that’s why we’re more known as a commercial broking group. But the fact is we’re doing it all.” Wells says 75–80% of the group’s business is generated by its referral partners, including

“It’s mind space. If you’ve got someone thinking about your business when they’re at home cooking a barbecue, then you tend to have someone engaged” adviser supporting the accountants where they now have a one-stop-shop approach – they are solving more problems of the client by way of bringing in finance, which is us. “It’s a very good broadening aspect of their business and something that supports the linkage to a stickier client, because the more products and services you have out to a client the less likely they are to leave you.” The group writes approximately $250m per year in loans, split equally in dollar value between commercial and residential. In terms of volume, it writes five times as many

client referrals, and the remainder is repeat business from existing clients. Although the majority of its referral partners are accountants, the brokerage also partners with other professionals, including conveyancing lawyers, solicitors, buyers’ agents in real estate, and financial planners. “Your referral partners can come in all shapes and forms,” Wells says. “A referrer can be simply a loan that you do and you exceed someone’s expectations and they’re happily out there endorsing you – everyone wants to talk about a good experience.”

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“It’s about having a spring in your step – loving what you do. And that’s why you do something for 40 years”

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PROFILE

GREG WELLS

WELLS’ BROKERAGE BY THE NUMBERS Industry under review

75% of its referral partners are accountants

30 are active referral partners 75–80% of business is generated by referral partners (including clients)

Group writes about

$250m/year in loans Residential loan volume is 5x size of commercial side

Over 50 lenders are on its panel

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With an extensive banking career prior to becoming a broker, Wells has seen both sides of the coin but says the growth of the third party is a clear indication that customers are embracing the broker model. “I’m much happier, in fact, having a broker hat on than a banker hat, because I feel that we are an advocate for the client in providing that choice – we’re filling a gap in the market.” Commenting on ASIC’s remuneration review, Wells says regulation brings quality and has improved the quality of brokers overall. But he would like to see more discussion between banks and brokers in moving key people from the first party to the third party as the latter increases its market share. With an ageing demographic, Wells says the industry needs to bring in young talent but also to further promote broking to women. “We need to encourage females into the industry and get a balance in there, and some businesses have done splendidly,” he says, pointing out that the majority of decision-makers in the home loan process are women. “So it’s a natural fit for our market to have females coming through and taking up roles

as finance brokers and moving into senior roles to endorse females. A lot of colleagues I speak to endorse that.” In Wells’ own team of nine staff, four are women, and he doesn’t just talk about change, he makes sure to act on it too; for example he gave a $10,000 donation of the prize money he received for a broking award to a local university and its business students.

Young talent Wells’ donation went towards supporting young students whose studies complement the industry, while at the same time promoting the option of a career in the third party channel rather than starting out in banking. Wells Partners/Mortgage Link Group has four directors and it was the youngest of them and a prior top graduate of the university, Domenic Corigliano, who suggested donating the money to the university. “We thought it was a natural fit to support Western Sydney University and the local people,” says Wells, as they now have three offices between Liverpool, Parramatta and Oran Park. He is also offering the award recipients the opportunity to take up work experience with the group in the coming year. “They can

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come in, spend a couple of weeks with us to get a feel for the business and the operation and what types of opportunities are there,” Wells explains. “To be able to use technology and [understand] the complexity in respect to loan conditions, policies that are everchanging and covering commercial as well – there’s a lot to learn.”

says he would have been a professional basketballer, and he still plays competitively today. “Sport was one area that I’m participating in a team – it’s a different aspect to a team in a business, but it’s still the same aspect that I’m part of a team. “I suppose as you get older your time is your most important asset, so you come to

“When a client is trying to get finance, if they haven’t heard from us for a day, that day feels like a week” Wells’ proactivity in promoting broking as a career option to young graduates is a great example to other brokers who may want to get involved in bringing fresh talent into the industry. On recruiting new brokers, Wells says it’s all about the right mindset. “You really want to have a very open conversation about what they’re looking for; what their goals are short-term and long-term,” he says. “It is about getting to know the staff member, getting to know what drives them and what motivates them. “It’s mind space. If you’ve got someone thinking about your business when they’re at home cooking a barbecue, then you tend to have someone engaged. And I’m looking for those types of people. “The industry is doing really well, and having that commercial flavour for 15 years has put us in a very strong position because we understand diversification very well and we’ve got great capacity to be an expert in all lending, not just one area.”

Wise advice After 40 years in the industry, how does Wells keep the passion for what he does, which is evident as he reminisces on his career? “It’s about having a spring in your step – loving what you do. And that’s why you do something for 40 years,” he says. “You clutch the air when you get a loan approved or get a good outcome – it’s that excitement.” There’s no sign that he would have chosen to be anything else, but if he had, he

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realise that. You’d like to have the body that you had when you were a 25-year-old playing a lot more basketball and recovering a lot quicker, but you love to have the mind that you’ve got today and the experience – so I still think it’s important therefore to share these experiences and wisdom of years of experience and of exposure to circumstances.” He says some people will listen and some won’t, but he isn’t one to sweat the small stuff and has a great family surrounding him as well. “Five children keep me very occupied in terms of trying to assist them in reaching their potential,” he says. And this is also what he finds most rewarding as a broker – assisting others in reach their potential. “Unless you believe in reincarnation, you only get one shot at this [life], and I’d like to think you sit back in years to come on your jetty having a beer and saying, wow, that’s been a great journey and I’m really happy about what I’ve done – but more so what I have done in terms of influencing other people to achieve their goals and have a great life.” Wells says his parents were his biggest influence and taught him great values, which have shone bright throughout his career. “That’s my DNA. It’s all about values, core beliefs. They gave me belief you can go out and do it,” he says. “Whilst I can’t share [with them] a lot of the success in the last 10 years, they were very proud, and I look back on that and that’s put me in very good stead.”

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FEATURES

DEBTOR FINANCE

A saving grace for SMEs MPA and Westpac team up to explore how brokers can add debtor finance to their offering ONE IN three owners of small and mediumsized enterprises (SMEs) have been working more than 50-hour weeks, and 61% take fewer than 10 days’ annual leave a year, according to NRMA Business Insurance. One of the biggest concerns for SMEs – and crucially, one that doesn’t go away – is cash flow. Although debtor finance isn’t just for SMEs, they are often an ideal candidate for debtor or cash flow finance. SME bosses consistently name cash flow as a top concern in running a small business. And according to ABS statistics, the sector employs almost half of our 10.7 million working Australians. That’s a large number of clients for whom debtor finance can open up an exponentially larger number of opportunities.

Boost your broking business Not only is debtor financing a boon for SMEs but it can also be a valuable addition to your brokerage. Earlier in the year, MPA spoke to Kevin Wheatley, managing director of Bayside Commercial Mortgages in Sydney, for our commercial broking supplement. “Financial pressure is the worst pressure any SME can experience,” Wheatley said. “It makes a huge difference if they have a good adviser that can come on board, who can say, ‘Yes, I know you have a problem, but I’ve also got a solution to that problem’.” Bayside Commercial facilitates around $50m per annum in debtor invoice facilities. “It definitely adds a string to your bow as a broker, and ensures that brokers are perceived

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as professionals and that people listen to them.” Westpac’s national manager of trade and invoice finance and specialist finance, Sam Mendelsohn, says the bank currently pays brokers an upfront fee and trail commissions for all referred debtor finance business written. These amounts can vary, however, dependent on the type of transaction and the deal size. “Brokers are oftentimes well positioned to add value by assisting clients with their cash flow management and liquidity concerns in the day-to-day running of their business,” says Mendelsohn. “Brokers can use debtor finance as a solution that can differentiate them in the market, allowing them to offer a broader,

placed to help them identify opportunities, in addition to providing education around client eligibility and the criteria with debtor finance facilities.”

A broad spectrum Debtor finance is not only suitable for many working Australians but can be applied to many different industries, and it’s only growing. According to statistics from the Debtor and Invoice Finance Association, the total debtor financing turnover in 2015 was $64.4bn, and market growth was 2.8% in 2015 compared to 2014. Mendelsohn recommends brokers gain an understanding of which industry groups are best suited to debtor finance. “These include manufacturing, wholesaling, labour hire, business services, transport and logistics, and service providers to the agriculture and mining industries. It is also a prudent practice that brokers review their client database regularly to be fully aware of their clients’ changing needs. “A good key to success for debtor finance is identifying clients who offer terms of trade to their customers and who wish to access money tied up in their trade receivables.” Bruce Debenham, director of banking and finance at Perks Finance in Adelaide, has a

“A good key to success for debtor finance is identifying clients who offer terms of trade to their customers and who wish to access money tied up in their trade receivables” Sam Mendelsohn, Westpac diversified product suite to their clients. This is also a great retention strategy with clients.” He points out that many brokers are not debtor finance product experts, and it is up to lenders to partner with brokers to provide a comprehensive introduction to the product and how it can be applied. “Brokers work with Westpac’s specialist bankers, who are well

background in commercial lending and a large SME client base consisting mainly of high net worth individuals such as doctors, dentists and orthodontists. He says it is a product that brokers should certainly consider taking on. “You have to have it in your toolkit – I think it’s important to have a variety of options for your client, and one of them is debtor finance.”

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BRUCE DEBENHAM: USING DEBTOR FINANCE IN A START-UP

Before his role at Perks Finance, Debenham used debtor finance himself during his involvement in a roofing business start-up. “When I helped a start-up we had customers who were paying on 60-day or 90-day terms and we needed the cash up front to help fund the growth of the business in its start-up phase,” he says. “So debtor finance at that time was an extremely useful product for us.” Debenham says debtor finance may suit some businesses but not others, and he would recommend it to clients with a strong debtor book. “You’ve got to be very careful in terms of when you’re recommending it to clients, as to whether it actually is a product that suits their working capital requirements. For some businesses, if it doesn’t suit, it can be quite costly, so there are alternatives out there that might be better for them.”

Top tips for adding debtor finance Mendelsohn says that for brokers considering exploring debtor finance, Westpac has support in place to offer to less experienced brokers, particularly in structuring transactions. “We can step them through each part of

the transaction and even provide separate training to the broker via our demonstration site,” he says. “We provide education in the form of training presentations and workshops to broker groups, individual brokers and aggregators to help them identify opportunities to deliver funding to businesses without the need for real estate security. “In order for a broker to offer the appropriate debtor finance solution to a customer, we highly recommend that brokers are fully informed about the structure of the business, size/quality of the debtor book, why the business is looking for funding, financial background of the business, even the industry groups which best suit the product, and really understand the value-add propositions for their clients.” Debenham agrees and mentions four practical tips for brokers new to debtor finance: have a solid understanding of the client and what they do; understand their working capital cycle; forecast with the client what their business will look like; and understand the various products available from different banks.

Bruce Debenham, director of banking and finance at Perks Finance, spent 12 months establishing a start-up roofing business in 2009, along with its founder. “I learnt many things which have proved extremely useful in my first 18 months at Perks,” says Debenham. “Having an appreciation of how an SME works and the various issues/problems such a business faces day in and day out is extremely useful when I am helping our clients with their interactions and dealings with their banks.” He assisted the start-up in raising $6m in equity from customers and staff (as many staff had left Perks’ competitor, where its founder had previously worked for 20 years, and moved over to the new company). The $6m comprised leasing of about $4m and debtor finance of $2m. “Although a new company, we had a founding customer base that pledged loyalty and support to the new company once we opened the doors – this assisted greatly when we were working with the bank to get the debtor finance,” says Debenham. “I developed a fully integrated model with supporting assumptions to demonstrate to the bank how the facility would be drawn and, more importantly, how it would be serviced. The model also demonstrated how and when we would need to draw on the leasing facility. “In addition to this, I drafted a comprehensive credit memorandum/ application for finance for the bank. With my credit risk background, knowledge of the roofing industry and having experience of cash flow/working capital lending, this helped enormously in terms of structuring the facilities that suited both the bank and us. My banking and, in particular, my credit risk background also helped in our discussions with the bank.”

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SIMPLY THE BEST

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EVENT PARTNER

For the 15th year running, the mortgage industry’s elite descended on The Star Sydney to celebrate young guns, industry legends and all of the talent in between THE AUSTRALIAN Mortgage Awards event has always been a special night for the industry, but 2016’s Awards were particularly exceptional. This is the 15th consecutive year in which the AMAs have been held, an achievement in itself in an industry that only emerged in the 1990s. The AMAs are living history of the industry’s progress, and a chance to celebrate it. The Star Sydney, the harbour city’s finest event venue, could be the only location for such a celebration. As befitting the setting, there was a stellar entertainment line-up, with comedian Tom Gleeson as MC and musical duet With Fox entertaining the crowd, and band Furnace and the Fundamentals ending the night on a high. All this was accompanied by fine dining and celebratory champagne for the most enthusiastic tables. At the tables sat a diverse group of the industry’s top professionals. While a handful were AMA regulars, with award stories stretching back years, there were also ‘young guns’ who would have been barely out of school when the first AMAs took place in 2001. Thus the night’s winners included some familiar faces as well as many others of all ages taking home trophies for the first time. In total, 27 trophies were given out to the winners, who were determined by an independent panel of judges. This year’s AMAs also featured two new awards, recognising the important contribution of the industry’s larger and smaller aggregators. Yet even with so many awards, the talent in the industry is so great that the AMAs can’t recognise it all. That’s why, for the first time, this year’s AMAs included a ‘Highly Commended’ accolade for each category, in addition to the winner. See our list of Highly Commended award winners on page 57. Congratulations to all those winners on what is, after all, the culmination of a career of hard work and innovative thinking. We’d also like to thank all our judges, presenters, award sponsors, and our event partner Westpac. Feeling inspired? The countdown to 2017’s AMAs begins now.

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2016’S AMAS BY THE NUMBERS

600 guests

149

companies represented

182

finalists

60

tables

7

months to plan the AMAs

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AUSTRALIAN MORTGAGE AWARDS WINNERS 2O16 MOST EFFECTIVE INTERNET PRESENCE

ENTOURAGE FINANCE

CORELOGIC

“I didn’t think we were going to be in the mix, but I’m really happy,” says Brett Gavaghan, operations manager at Entourage Finance (pictured right). Entourage Finance was only established in 2015, and its director is previous AMA winner Damien Roylance (left).

For Frank Knez, general manager of marketing at CoreLogic, excellent service is about combining consistency with innovation. “I believe it’s just a continued delivery of value. We’re always introducing new solutions; we’re giving good service to mortgage brokers, to aggregators and to lenders.”

BEST INDUSTRY ADVERTISING CAMPAIGN

BEST COMMUNITY ENGAGEMENT

LIBERTY

John Mohnacheff was “uber excited” at taking home an AMA, Liberty’s national sales manager told Australian Broker. Liberty has long been known for its distinctive adverts, often in MPA. The secret, says Mohnacheff, is “breaking away from rate and detail and making it very visual and entertaining”.

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BEST INDUSTRY SERVICE

1ST STREET

1st Street is well known as a highperforming brokerage. What’s less well known is its community work with health charities, sports groups and youth organisations. “We’re trying to do the right things, give back, and support our community and be part of it,” says broker Yuval Bloomfield (pictured right).

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EVENT PARTNER

AGGREGATOR OF THE YEAR (<500 BROKERS)

AGGREGATOR OF THE YEAR (>500 BROKERS)

ASTUTE FINANCIAL MANAGEMENT

CONNECTIVE

“I think the secret is our membership and our members,” says Brad Wood, director of Astute Financial Management. “They’re hard-working individuals who put a lot in and are passionate about what they do.” The aggregator is home to a number of award-winning brokerages, such as Astute Sydney City Central. Winning the first-ever AMA award for boutique aggregators was very much a team effort, Wood explains. “I’m very excited for the team. These awards, whilst I stand up and collect them, are really a recognition of the effort the team put in.”

A worthy winner of the AMA’s first major aggregator award, Connective has continued its upward ascent this year. “We’re delighted to have won the award,” Gingkai Tan, Connective’s new general manager of sales and distribution, told MPA sister title Australian Broker. “We’ve got a business full of the most passionate people, who want to be the best partner we can to our lenders and brokers, and it’s that passion that really drives the business and we’re really proud of that.” Connective’s franchise arm iConnect launched this year, while the wholesale aggregation business, with its flexible model, continues to attract brokers.

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AUSTRALIAN MORTGAGE AWARDS WINNERS 2O16

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QUALITY YOUNG GUN OF THE YEAR – FRANCHISE

QUALITY YOUNG GUN OF THE YEAR – INDEPENDENT

NELSON BEDOYA

YUVAL BLOOMFIELD

LOAN MARKET

1ST STREET

This is not the first time Nelson Bedoya’s talent has been recognised – he’s one of MPA’s 2016 Young Guns – but winning an AMA is a welcome surprise. “I’m fairly new to the industry, and on my own, so I didn’t expect to win an award, but I’m very proud to have won it.” Being new to the industry is a challenge in itself, Bedoya admits. His aim is to “really get out there amongst my clients and do the best that I can for them”.

Winning an AMA in your first year in broking is quite an achievement, and Yuval Bloomfield knows just how hard breaking into this industry can be. “It’s learning systems, meeting new people, just getting out there … I feel it’s down to hard work, and just keeping doing what I’m doing, which is writing new loans,” he says. This was Bloomfield’s first experience of the AMAs, and presumably not his last. “It’s great to be here and a privilege to be part of this occasion.”

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AUSTRALIAN MORTGAGE AWARDS WINNERS 2O16 BEST NON-BANK BDM

BEST NON-MAJOR BANK BDM

ALF VASTA

JOHN LOUKADELLIS

LIBERTY FINANCIAL

MACQUARIE BANK

Alf Vasta takes a “solutions-based” approach to being a BDM. “We generally work as a business partner alongside our brokers,” he says, “not only helping them build their business but consolidating their business.” He’s “over the moon” at clinching the trophy. “This is a fantastic night for the industry and one that everyone wants to be part of.”

Collecting a trophy just hours after being on the plane from Hong Kong, John Loukadellis has made it, in every sense. “It’s an honour not just for myself but for the team at Macquarie,” Loukadellis tells MPA. “I treat my role as being self-employed … I take everything on my shoulders.”

BANKWEST BEST AGGREGATOR BDM

BEST MAJOR BANK BDM

CHRIS STRAW

SHANNON GIBBONS

AFG

WESTPAC

A 15-year veteran of the industry, Chris Straw was “humbled” to win this year: “Whatever I can do to support my brokers along the journey, I’m there for them.”

The glass trophy in Shannon Gibbons’ hands is “recognition for a lot of hard work and a true partnership with my brokers”. That partnership means “just being available, being contactable, giving them the right answers and really looking after their customers”.

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AUSTRALIAN MORTGAGE AWARDS WINNERS 2O16 AFM BEST CUSTOMER SERVICE FROM AN INDIVIDUAL OFFICE

SMARTMOVE PROFESSIONAL MORTGAGE ADVISORS

Being recognised for customer service is “amazing, absolutely amazing; customer service is what it’s all about, so to win it is absolutely fantastic”, says Smartmove general manager Darren Little (pictured left). It took a tragedy to show the true impact a broker can have, he explains, when a young member of Smartmove’s team passed away this year. “What we learnt from his customers when he passed away is that it wasn’t a transaction; it was really about changing lives.”

BROKERAGE OF THE YEAR – DIVERSIFICATION

ASTUTE SYDNEY CITY CENTRAL

The diversification award is quickly becoming Astute Sydney City Central’s award, with yet another consecutive win, and director Moshe Moses humbly admits diversification is an area “that we excel in”. Moses believes brokers should diversify “because they can’t just rely on one source of income and one source of product. Customers do want the holistic financial services offering, and they do need to take the leap forward, because they need to stretch the boundaries in terms of what they can offer the customer”.

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BROKERAGE OF THE YEAR – FRANCHISE

NEXTGEN.NET NEW BROKERAGE OF THE YEAR

LOAN MARKET BAYSIDE

CAIRNS MORTGAGE BROKERS

When you’re a brokerage headed by one of Australia’s most decorated franchise brokers ever, Josh Bartlett, you expect to be in the running for the Brokerage of the Year award, but Loan Market Bayside has gone one better and won it. Although Bartlett wasn’t present to personally receive the award – it was collected by fellow Loan Market broker Matthew Dique – his success this year has driven the brokerage, which broke into the Top 10 of MPA’s Top 100 Brokers list with $166,000,000 in residential loans over the 2015/16 financial year. Bartlett also has several individual AMA trophies to his name.

Cairns Mortgage Brokers is a business that breaks the mould: whereas new brokerages have tended to be corporate and sharply suited, this is a brokerage steeped in its regional community, says director Roger Ward. “For a small brokerage in North Queensland this is an absolutely tremendous achievement.” The business was actually started in Sydney, Ward explains. “We learnt a lot of valuable lessons and actually translated that to a regional environment. The important thing you’ve got to have in regional Australia is a commitment to community.” AWARD SPONSOR

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AUSTRALIAN MORTGAGE AWARDS WINNERS 2O16

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COMMONWEALTH BANK BROKER OF THE YEAR – PRODUCTIVITY

ALI GROUP BROKER OF THE YEAR – INSURANCE

OLIVER LI

MAXINE FARMER

OPTION FINANCE AUSTRALIA

MAXON FINANCE

“It’s unbelievable” to win an award, an overjoyed Oliver Li tells MPA. Driving productivity is all about maximising the conversion rate, he believes, which means being prepared to hold back applications until they’re ready to go ahead. “We have very strict policies in order for us to submit an application, in order to make sure the application is successful with the banks.” Li is one of MPA’s 2016 Young Guns, and was also a finalist for the AMA non-conforming broker award.

Moving on the conversation to insurance is “easy, very easy to do”, explains Maxine Farmer. Considering a client’s cover is of course a necessary part of the client’s first interview. “You’re putting them in debt, so you need to make sure they’re covered.” Farmer felt “a little nervous” on winning her first award, she says, having spent 35 years working in banking and finance. Her brokerage, Maxon Finance, is based in the Perth suburb of Wembley.

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2017 â&#x20AC;&#x153;Being recognised as a 2016 Young Gun was a significant personal achievement, which was the reflection of hard work, commitment to my clients and a passion for our industry. My business has thrived since as business partners and clients have the level of confidence they are dealing with a dedicated and educated broker." - AARON CHRISTIE-DAVID, DIRECTOR of ATELIER WEALTH MPA YOUNG GUN 2016

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AUSTRALIAN MORTGAGE AWARDS WINNERS 2O16

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PEPPER BROKER OF THE YEAR – NON-CONFORMING

ANZ BROKER OF THE YEAR – COMMERCIAL

STUART STYLES

GEORGE KARAM

ARTHURMAC & CO

BF MONEY

Non-conforming, says Stuart Styles, is firstly about “asking questions and digging deeper and asking the next question. Really I hate to say no!” It’s not easy, he says, and praises his team “who’ve never let me down … we never give up, and that’s the key to non-conforming: you have to do a bit more work; you have to know a little bit more about the customer and the situation; it’s a little bit more involved, but I love it.”

Cementing his place in the broking elite, this is the second year George Karam has taken home the commercial trophy, having also again topped MPA’s Top 10 Commercial Brokers rankings. Nevertheless, the experience is “sensational”, he says. “I was up against a lot of really good commercial guys.” Karam advises brokers looking to move into the commercial space to “focus on what you understand really, really well, and don’t take on more than you actually can. We let go of heaps of clients, but you’ve really got to care about the ones you are trying to help.”

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HIGHLY COMMENDED This year, for the first time in the AMAs’ 15-year history, there was both a winner and a ‘Highly Commended’ accolade in each award category, recognising mortgage professionals for their work over the past year. Both awards were decided by a panel of judges.

MOST EFFECTIVE INTERNET PRESENCE – ARG FINANCE BEST INDUSTRY SERVICE – BOUTIQUE OUTSOURCE SOLUTIONS BEST INDUSTRY ADVERTISING CAMPAIGN – PEPPER MONEY

QUALITY YOUNG GUN OF THE YEAR – FRANCHISE – HUNG CHUY, YELLOW BRICK ROAD RANDWICK ALI GROUP BROKER OF THE YEAR – INSURANCE (MORTGAGE PROTECTION & LIFE) – NICHOLAS KAKALIS, FINANCE UNLIMITED

BEST COMMUNITY ENGAGEMENT – ASTUTE ABILITY GROUP

COMMONWEALTH BANK BROKER OF THE YEAR – PRODUCTIVITY – GEORGE KARAM, BF MONEY

AFM BEST CUSTOMER SERVICE FROM AN INDIVIDUAL OFFICE – ASTUTE ABILITY GROUP

ANZ BROKER OF THE YEAR – COMMERCIAL – DANIEL GREEN, GREEN FINANCE GROUP

AGGREGATOR OF THE YEAR (<500 BROKERS) – OUTSOURCE FINANCIAL

PEPPER MONEY BROKER OF THE YEAR – NON-CONFORMING – GIULIO AVIAN, FUNDSNATIONAL PTY LTD

AGGREGATOR OF THE YEAR (>500 BROKERS) – FINSURE FINANCE AND INSURANCE

FBAA BROKER OF THE YEAR – INDEPENDENT – JUSTIN DOOBOV, INTELLIGENT FINANCE

BANKWEST BEST AGGREGATOR BDM – PETER BRYANT, VOW FINANCIAL

BROKERAGE OF THE YEAR – FRANCHISE – MORTGAGE CHOICE BUDERIM

BEST NON-BANK BDM – DIANNE ROBINSON, PEPPER MONEY BEST NON-MAJOR BANK BDM – ROMNEY FERGUSON, SUNCORP BANK BEST MAJOR BANK BDM – JOHN KAKAKIOS, ANZ QUALITY YOUNG GUN OF THE YEAR – INDEPENDENT – MITCHELL SHAD, SMARTMOVE PROFESSIONAL MORTGAGE ADVISORS

NEXTGEN.NET NEW BROKERAGE OF THE YEAR – RIGHT ANGLE HOME LOANS BROKERAGE OF THE YEAR – DIVERSIFICATION – GREEN FINANCE GROUP ANZ BROKERAGE OF THE YEAR (≤5 STAFF) – INDEPENDENT – LENDING4U ME BROKERAGE OF THE YEAR (≥6 STAFF) – INDEPENDENT SHORE FINANCIAL

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AUSTRALIAN MORTGAGE AWARDS WINNERS 2O16

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ANZ BROKERAGE OF THE YEAR (≤5 STAFF) – INDEPENDENT

ME BROKERAGE OF THE YEAR (≥6 STAFF) – INDEPENDENT

FBAA BROKER OF THE YEAR – INDEPENDENT

PFS FINANCIAL SERVICES

THE AUSTRALIAN LENDING & INVESTMENT CENTRE

MARK DAVIS

PFS Financial Services owner Daniel O’Brien felt mixed emotions on winning an AMA. “It’s almost 10 years to the day since I got my last one of these,” he says. “It’s a pretty bittersweet moment and I feel like I’ve come full circle.” Independent brokerages have no room for error, he warns. “We live and breathe by giving the actual best service. Being independent we don’t have a brand to fall back on to give us that trust, so it’s all about delivering that consistent, good service that people tell other people about.”

With this trophy, The Australian Lending & Investment Centre has made it three out of three, having won the top larger independent brokerage award since 2014. “We’re absolutely delighted,” says managing director Jason Back. “It’s been an amazing year, very challenging – but this is the absolute highlight of the year … every year we pick a theme; this year it’s been about investing in our people and understanding what motivates them and drives them, and understanding our people has really excelled our results this year.”

Despite being one of the most successful brokers in the industry, it’s been a while since Mark Davis has won an individual award at the AMAs. “It’s tough winning the individual awards, and we’ve finally come through, which is great.” Yet for Davis being a good broker and managing top brokerage The Australian Lending & Investment Centre cannot be separated. “We’ve done a lot of work on the business, on the culture of the business, and getting the right people on the train.”

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AUSTRALIAN MORTGAGE AWARDS WINNERS 2O16 AUSTRALIAN BROKER AUSTRALIAN BDM OF THE YEAR

SHANNON GIBBONS WESTPAC

COMMONWEALTH BANK AUSTRALIAN YOUNG GUN OF THE YEAR

YUVAL BLOOMFIELD 1ST STREET

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For Shannon Gibbons, receiving Australia’s highest accolade for business development managers is “truly recognition for a lot of hard work for a long period of time”. It has indeed been a long journey. Gibbons has been at Westpac for 10 years, the last five of those as a BDM, gaining the trust and support of a large number of brokers. Gibbons is hugely grateful: “I truly want to thank my brokers for all their support… Really this award is for my team and all my brokers.”

March 2015 doesn’t seem long ago, but it’s been long enough for Yuval Bloomfield to establish himself as one of broking’s most exciting emerging talents. Bloomfield joined 1st Street last year after nine years in banking at NAB and CBA, and he credits his colleagues with making a difference. “It’s really about the people around me supporting me in my office, as well as the people I deal with every day,” he says. Winning the big award “is unbelievable; it’s a surprise, and I’m really just happy”.

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NAB AUSTRALIAN BROKERAGE OF THE YEAR

WESTPAC AUSTRALIAN BROKER OF THE YEAR

PFS FINANCIAL SERVICES

MARK DAVIS THE AUSTRALIAN LENDING & INVESTMENT CENTRE

“How can I put it into words? I have no words!” Clearly being named Australia’s No. 1 brokerage has come as a big surprise to PFS Financial Services and its owner, Daniel O’Brien. PFS is setting the standard for small brokerage excellence, without the need for cutting-edge technology or aggressive sales tactics. It wouldn’t be possible, says O’Brien, without business partner Josh Ransom, who is “the backbone of my business, my operations manager. I feel very proud and happy to take this back to him, because this award is for him”.

Being an industry legend is not enough; even Australia’s best brokers have to earn the night’s most hotly contested award. With a record-breaking $335m in residential lending, Davis made it clear that 2016 was his year, clinching both the Top 100 and the AMA trophies. “You don’t win this yourself,” Davis says. “It’s all about your staff, your team, your EA, your support staff, your business colleagues, your business partners, your managing director … this is not an award for me; it’s for our team and ALIC.”

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PEOPLE

CAREER PATH

THE ARCHITECT From introducing redraws to electronic lodgement, AFG co-founder Malcolm Watkins is responsible for much of what broking looks like today

Watkins attended the University of Western Australia, studying dentistry until he had an unfortunate encounter. “They wheeled in a live patient about the middle of my second year and I took one look in the mouth and decided this job is not for me.” He later worked in the horticultural industry as a marketing manager.

1982

STUDIES DENTISTRY

1994

LAUNCHES AFG Watkins and McKeon became victims of their own success when the banks stopped their branches from working with Mortgage Monitors. For Watkins it was a turning point. “If we can’t refer back to branches, we’ll need to write it ourselves, so we formed Australian Finance Group in 1994.” Assisted by former prime minister Paul Keating’s opening up of the banking market, using a broker quickly caught on. “It was an innovative value proposition that has held true until today…choice, convenience, and it was low cost.”

1993

SETS UP MORTGAGE MONITORS Watkins set up Mortgage Monitors with Brett McKeon, who he had known since Grade 7, Bradley McGougan and Kevin Matthews. Australia was in a recession, so the company took a financial planning approach, helping people with budgeting amid high interest rates, initially using an Excel spreadsheet. Mortgage Monitors introduced redraw facilities to Australia, at first through Citi and Bank of New Zealand, and the trend quickly caught on.

1999

CREATION OF FLEX AND LIXI By the turn of the millennium, AFG represented around 3.5% of the mortgage market, but technology was preventing further growth. With investment from Macquarie Bank AFG was able to create Flex, which is still used today. AFG cooperated with Aussie Home Loans, Mortgage Choice, ING, ANZ, NextGen.com.au and others to introduce electronic lodgement and develop the LIXI industry standard for electronic communication.

“To a large extent we’re a technology provider; we’re innovators as well but we don’t make code” 2015

LISTS ON THE ASX

Listing “was an opportunity to take us to the next level,” Watkins explains. AFG did not need the money, he insists. They had already recommenced warehouse lending back in 2011, thus listing in 2015 was more about raising funds for further investment in technology and diversification. It was also personal: board member Bradley McGougan had already passed away and Kevin Matthews wanted to retire, and listing allowed Matthews and McGougan’s estate to take money off the table.

2007

GFC HITS AFG was preparing to list on the ASX, with a prospectus ready, when the GFC hit. “We saw the GFC coming. We took a long hard look at the US market and we didn’t know where the bottom was going to be…we decided to cut hard, really early.” They reduced staffing levels and overheads by 23%, although they later rehired almost half of those staff.

“I think brokers will be forced to use technology… there’s a large section of the Australian community who don’t even use email” 62

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PEOPLE

OTHER LIFE

Considering sponsorship? Sponsoring local sports teams and events can mean a lot more than branding – clubs increasingly have email newsletters and junior sport can be a good way to meet the parents. Most states now have websites to help you find local sporting organisations.

ON YOUR BIKE Top 100 regular Peter Gwynne is also hitting top numbers outside broking, as a time-trial cyclist A PASSION for excellence doesn’t stop at the office door, as Peter Gwynne demonstrates. At no.36 in this year’s Top 100 Brokers report – of which he has been part of since 2012 - the owner of Choice Home Loans Varsity lakes has established himself as one of Queensland’s broking elite. He’s equally serious about his cycling. Gwynne’s brokerage is a major sponsor

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of Tour de Valley, a time trial event on the same course that will host the Commonwealth Games cycling events in 2018. Not only is the event somewhat more intense than a fun run, Gwynne actually competes in the time trial, and in fact clinched the trophy on several occasions. He’s also an Australian Masters cyclist, and won gold in his age group at the Australian

National Time Trial Championships in October, and silver in the overall event. Sponsoring events is important in its own right, Gwynne believes, but being able to take part in an added bonus: “I’m a big believer in businesses getting behind community events and it’s only natural to support an event that I am personally very passionate about.”

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Mortgage Professional Australia issue 16.12