Mortgage Professional Australia issue 17.10

MPAMAGAZINE.COM.AU ISSUE 17.10

BACK IN TOWN

Our Aggregators Roundtable reconvenes to discuss the future of commissions Small business Commercial broking on an SME scale

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AMA finalists Front runners for the Australian Mortgage Awards

Gerald Foley nMB’s journey from Aussie to Liberty

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OCTOBER 2017

CONNECT WITH US Got a story or suggestion, or just want to find out some more information?

CONTENTS

twitter.com/MPA_Australia facebook.com/Mortgage ProfessionalAU

UPFRONT 04 Statistics

The numbers that matter to commercial brokers and SMEs

SPECIAL REPORT

16

06 Head to head

36

Three female brokers on how networking groups have helped them

10 Opinion

FEATURES

AMA FINALISTS

The front runners for this year’s Australian Mortgage Awards, including new lender and aggregator categories

12 nMB boss on how the deal with Liberty came about and what comes next

52 Rise High Financial Solutions 54 David Bailey

Charting a decade at AFG (via cricket) with the aggregator’s new CEO

Commission changes, compliance support and bank interference – Australia’s leading aggregators take on the most contentious issues

GERALD FOLEY

MORTGAGE INSIDERS Exploring Marissa Schulze’s multiaward-winning Adelaide brokerage

AGGREGATORS ROUNDTABLE

THE BIG INTERVIEW

Lawyer Ruth Neal of Dentons on what ASIC’s user-pays model means for you

56 Shaun Pyne

FEATURES

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Broker and sports agent on turning talented youngsters into the stars of tomorrow

SMALL BUSINESS CHALLENGES What Aussie SMEs are up against and how brokers can help

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08 UPFRONT

NEWS ANALYSIS

Bank reporting season reopens the direct versus broker channel debate

Our new daily newsletter, with expert news analysis every day.

Every day you can expect news analysis that goes beyond the headlines to discover what matters to your business, in addition to property market trends, business strategy, industry leader opinions, and the stories of real brokers on running their businesses.

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UPFRONT

EDITOR’S LETTER

LET’S END THE REFERRAL OBSESSION

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f clients seem thin on the ground this month, don’t despair: you’re no different to 95% of brokers out there, a new report by wealthify.com.au suggests. In fact, just one in 20 brokers say they have enough leads for their business.

Before proclaiming the end of broking, take a moment to check the facts. Asking a broker if they have enough leads is like asking someone if they have enough money – you could always do with more. Furthermore, as a lead provider, wealthify.com.au is incentivised to come to this conclusion.

Nevertheless, competition within broking is growing; the MFAA’s most recent Industry Intelligence Service report warned broker numbers “may be reaching saturation” with so many new entrants.

When the competition gets tough, you need to improve your approach to lead generation. Wealthify.com.au found that the most popular method, used

Relying on referrals – both formal networks and informal client recommendations – seems dangerous for brokers who are effectively invisible by 92% of brokers, is referrals, way ahead of social media (30%), Google search (25%) and print advertising (11%). Incredibly, 20% of brokers don’t have a functioning website.

Relying on referrals – both formal networks and informal client recommendations – seems dangerous for brokers who are effectively invisible on the internet. Many of the arguments used by advocates of referral-only brokerages are questionable. Elite brokers can afford this strategy because they have a database and considerable trail commissions to cover the quiet months; brokers linked with real estate firms put themselves at huge risk should those relationships break down.

Two recent developments could make referral-only strategies even harder.

New broking services by Domain and realestate.com.au will snap up leads long before homebuyers speak to you; secondly, CHOICE and consumer advocates are calling for regulators to investigate referral networks and trail book buying.

Most disturbing of all referral myths is the argument that brokerages simply can’t afford an active online presence, let alone advertising. If your business doesn’t generate enough profits to fund the marketing you need to generate enough leads, is it really a successful business model?

Sam Richardson, editor, MPA

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www.mpamagazine.com.au OCTOBER 2O17 EDITORIAL Editor Sam Richardson Journalist Maya Breen Contributors Ruth Neal 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

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

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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

STATISTICS

ZOOMING IN ON SMEs

35%

34% 30%

25%

An NAB-commissioned white paper explores what Australian SMEs look like in 2017, what they care about and how they do business

20%

15% NAB’S WHITE Paper, Moments That Matter: Understanding Australian SMEs, has uncovered a number of interesting insights into the SME world, not just from the perspective of a broker’s own business but also in terms of the deeper understanding of SMEs that they may give brokers servicing this client base.

NAB’s chief customer officer of business and private banking, Angela Mentis, says the survey solidifies the notion that customer

57%

of Australia’s GDP is contributed

by SMEs

7 million jobs are created

by SMEs

satisfaction tops the list for business owners, instead of things like money or high turnover.

“Small and medium businesses are the backbone of the Australian economy, their success is central to our nation’s financial wellbeing,” says Mentis. “While sales and profits are important for Australian SMEs, it is clear customers are why thousands of small business owners around the country get up and do what they do.”

64%

of SMEs are run by men

5%

0%

seeing the smile of satisfied customers

36%

of SMEs are run by women

MEASURING BUSINESS SUCCESS

HOW’S BUSINESS?

While we might have expected profit levels to top the list, SMEs owners took a broader view of what accounts for financial and business success.

NAB asked SME owners about the past and future of their businesses, and encountered a high degree of optimism.

good financial management 58% positive word of mouth 56% customer retention 52% productive staff 49% high profits 32%

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10%

75% 73% 50% 45% 43%

changed the nature of their business since founding it feel successful in their own business have been in business for 10 years or less intend to expand made a profit straight away

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WHAT MATTERS MOST TO SMEs? NAB’s survey found that when SMEs rank their most important moments, it comes down to the little things, such as seeing a customer smile. ‘Firsts’ for the business are also important, and getting through the tough times.

26% 23% 20%

becoming a viable business

20%

making a profit for the first time

lasting through tough economic times

big customer win

16%

16%

bringing on first or new staff member

thinking of the business ‘idea’

MILLENNIAL SMEs

SMEs AND THE INTERNET

Australian millennials (between 18 and 35 years old) make up one in five SMEs, which are run by men and women in equal proportions (50% each).

The internet has impacted SMEs and the way they do business in many ways, from how customers find them, to marketing and turnaround times.

100% 80%

37% of SMEs said most of their customers find them via the internet

82%

60%

66%

40%

23% of SMEs

41%

20% 0%

27% of SMEs said customers expect instant service

25% are in metro areas

plan to expand in the next 3 years

have a tertiary undergraduate degree

are online-only businesses

have noticed a significant increase in their customers’ expectations

21% of SMEs found social media marketing has grown their customer base

All data sourced from: NAB Moments That Matter white paper, Chapter 1, June 2017

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UPFRONT

HEAD TO HEAD

Are you part of a networking group?

Three women brokers describe the networking groups they are part of and the value they offer

Deslie Taylor

Owner/manager Mortgage Choice Ormeau Networking has been a major focus of my business for the past 12 months.

To show my ongoing support to the local community and businesses in the area we meet for a monthly networking breakfast. This breakfast enables all of the local businesses in finance, legal and accounting to discuss all areas of business that we may need to focus on. We invite guest speakers who are educated on our main focus for the month, ie marketing or staffing.

Networking groups are a great way to maintain a level of motivation and support in the local community.

The ability to be able to call on others feeling similar pressures and who can be a sounding board is priceless.

Susie Davis

Deanna Ezzy

Mortgage broker Lotus Home Loans

Finance strategist Trilogy Investment Property Funding

The aim of networking for me is to make new connections and build relationships to grow my business. I discovered the Business In Heels women’s networking group which has almost 500 members locally and over 100,000 worldwide. It offers the opportunity to meet many other businesswomen every month in a casual atmosphere, discussing what we do and how we can help each other. Many have a wide range of different and unique businesses that I would not have otherwise connected with and I always come away learning something new. The women I have met are interesting, supportive, motivated and like-minded businesswomen with a common goal for their businesses to be successful.

I am a member of Canberra Women in Business. CWB provides a relaxed environment to socially engage with other Canberra businesswomen and also allows me to promote my own business.

I recently won the Member of the Month award, which meant that for an entire month I was regularly featured on social media. The networking is relaxed as we’re left to our own devices with some food and wine. Often I find myself bumping into the same people, which helps build meaningful connections as we’re seeing familiar faces every fortnight. The speakers are local women and provide me with inspiration as they relate their own journeys in this world of business.

A GROWING FORCE FAST concluded its fifth annual Women in Business series with a strong attendance of over 300 people nationally, most being women seeking valuable insights from their broker peers.

Female brokers are a growing force in the industry and their numbers are reaching record highs. MFAA data shows that 32% of new hires in the broker market last year were women, a record rise of 8.7%. FAST CEO Brendan Wright said, “The benefit to our industry in having a good representation and balance in gender – as well as ethnicity, experience and thinking – is that we can cater to a broader range of consumer and business owner preferences. This will enable sustainable growth for many years to come.”

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UPFRONT

NEWS ANALYSIS

NERVOUS TENSIONS With the major banks coming under pressure to reduce their reliance on brokers, the commissions saga has taken a new turn, writes MPA’s Maya Breen

UBS HAS made it clear in the past that it doesn’t view the broker channel in a favourable light. A particularly damning report released by the global investment bank earlier this year had the broker community in an uproar and was slammed by the industry associations after it claimed that broker commissions slapped an extra 16 basis points per annum onto the interest rate of every mortgage in the country.

Once again, there’s little good news for brokers in a new UBS report that analysed CBA’s FY17 results and applauded how the figures reflected a reduced reliance on the broker channel. In addition, NAB (which owns three of the country’s top aggregator

the figures showed a sharp fall in broker originations to 43% in 2H17, which UBS said was a “positive sign” for two key reasons.

According to the report: this demonstrates that CBA can leverage its customer base, distribution strength and analytics it puts CBA in a good place to “negotiate materially lower mortgage broker commissions consistent with the ASIC & Sedgwick reviews” The analysts said they expected an announcement on lower broker commissions to be just around the corner.

“Mortgage broker commissions have been spiralling upwards for many years and

“We believe the industry needs to make adjustments to the standard commission model” Anthony Waldron, NAB groups, PLAN Australia, Choice Aggregation Services and FAST) has proposed adjustments to be made to upfront commissions.

Less broker reliance In the UBS report, titled Commonwealth Bank of Australia: Can CommBank get back to business?, analysts Jonathan Mott and Rachel Bentvelzen said “one of our long-running concerns with CBA had been its increased reliance on mortgage brokers”. CBA’s FY17 results revealed group mortgage originations rose from 31% in 2012 to 50% in 2H16. But

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mortgage commissions are the one part of the financial services value chain that have not seen margin pressure,” the report said.

“Although old trail commissions will take some time to roll off, we see a reduction in excessive broker commissions as an area of upside for CBA and the broader banking industry.”

Being upfront The day after UBS released its report, NAB’s executive general manager, broker partnerships, Anthony Waldron, revealed details of the bank’s response to the ASIC

remuneration review. “There has been a lot of noise around the broker industry in reaction to both the recent ASIC broker remuneration review and Stephen Sedgwick’s review on retail banking remuneration. This is a period of high scrutiny and impending change for our industry, bringing with it uncertainty.”

He highlighted the positive observations made in the ASIC review of the value that brokers offer, saying the review “recognised that brokers match customers to the right home loan for their needs, help navigate the home loan process, and provide education.

It noted that brokers have created strong competition in the market, with more lenders gaining distribution via brokers, giving consumers greater choice.”

Broadly speaking, Waldron said NAB supported ASIC’s six proposals, although the bank didn’t believe the current standard commission model in place had led to poor consumer outcomes. However, he said NAB did propose that changes should be made to upfront commissions.

“We believe it is essential to manage not only actual conflicts but also the potential for perceived conflicts of interest. ASIC suggests

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NOT A FAN OF BROKING After slamming broker commissions in a May report on the ASIC and Sedgwick reviews, UBS suggested banks could do better: “Broker originated mortgages therefore cost customers more over the life of the loan” “Broker commissions now add 16bp p.a. to the cost of every mortgage in Australia” “We believe advice for a commoditised, single product such as a mortgage can be easily provided by robo-advice” “We believe the current quantum of economic rent being extracted by the mortgage broking industry is unrealistic and is likely to fall dramatically in coming years” Source: UBS Commonwealth Bank of Australia: Can CommBank get back to business? (August 2017)

lenders should not ‘structure their incentives in a way that encourages larger loans that initially have larger offset balances’. We believe the industry needs to make adjustments to the standard commission model by paying upfront commissions based on the drawn-down amount, not the total

of customers and brokers, and we’re mindful that today’s actions will be judged by tomorrow’s standards,” Waldron said.

Investing in brokers Even though CBA’s broker-originated loan volumes have dropped, the bank continues to

“FAST happens to be an aggregator owned by a lender, but we happen to be an aggregation business that needs to deliver” Brendan Wright, FAST facility amount, and by paying upfront commission net of offset balances.”

Although UBS has suggested that banks should lower broker commissions, it appears from Waldron’s comments that banks may not share the same viewpoint.

“We know we need to build a more robust industry model, not just to reduce the perception of conflict of interest but for endto-end governance. We know we need to increase transparency to protect the interests

note the importance of the broker channel and has become heavily invested in it, having acquired the remaining 20% of Aussie shares from John Symond in August.

Through ownership of three leading aggregators, NAB too is invested in the broker channel. The CEOs of Choice Aggregation Services, FAST and Plan Australia told MPA at this year’s Aggregators Roundtable that the major bank was heavily invested in the success of the broker channel. Westpac is partially

invested through its ownership of RAMS, and CBA-owned Bankwest is growing outside of its home state of WA largely thanks to brokers.

“FAST happens to be an aggregator owned by a lender, but we happen to be an aggregation business that needs to deliver on its value proposition to brokers,” FAST CEO Brendan Wright commented during the roundtable.

“The fact that we are owned by a bank that needs to line up behind Sedgwick – as do all the banks, and we have committed to that – means that we need to make sure it’s done in light of the third party industry.”

Plan’s CEO, Anja Pannek, pointed out that bank ownership presented opportunities to influence policy, saying: “We’ve got a direct voice to one of the largest financial institutions in Australia … what my team is able to do is connect the sentiments of our members with our shareholders.”

Editor’s note: just before MPA went to print the Treasury made public industry submissions regarding commission changes. Whilst NAB and Westpac allowed their submissions to be made public, ANZ and CBA did not, so their relationship to brokers remains unclear.

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UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email sam.richardson@keymedia.com.au

WHO PAYS FOR ASIC? Dentons partner and regulation expert Ruth Neal explains how ASIC’s recently announced cost recovery framework will affect your business

ASIC’S NEW cost recovery framework, first announced by the government in April 2016, has now been finalised. From 1 July 2017, all entities regulated by ASIC will be required to pay a levy to recover the costs of ASIC’s regulatory activities for their industry sector.

The levy that applies to an entity will depend on ASIC’s regulatory costs for the industry subsector within which that entity operates, and the entity’s size and/or level of activity within that subsector.

Flat levies will be applied in subsectors where ASIC’s regulatory costs are approximately the same for each regulated entity. Graduated, or variable, levies will apply in subsectors where ASIC’s regulatory costs vary across the entities within that subsector.

ASIC has indicated that the first invoices in relation to regulatory services provided in the 2017/18 financial year will be issued in January 2019.

Who in the credit industry is affected?

The regime establishes subsectors for ‘credit intermediaries’ and ‘credit providers’.

The credit intermediaries subsector is made up of all entities that hold an Australian credit licence authorising them to engage in credit activities other than as credit providers.

The majority of these entities will be finance brokers. However, servicers and other licensed intermediaries will also be levied under this subsector.

The subsector for credit providers covers all credit licensees who are authorised to engage in credit activities as credit providers.

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These will include lenders, as well as credit licensees who conduct other types of business but also hold credit provider authorisation under their licences.

How does the levy apply to credit intermediaries?

The levy applying to credit intermediaries will be $1,000 plus a variable amount calculated by reference to the number of credit representatives the entity had at the

representatives charging a fee to their broker members in order to recoup the levy they have paid for them.

How does the levy apply to lenders?

All credit providers have to pay a minimum levy of $2,000. A credit provider that provided more than $100m under credit contracts in the financial year will be required to pay an additional amount calculated by reference to that credit provider’s share of the total value of credit contracts above $100m provided by the subsector in the financial year.

Small-amount credit contracts are excluded from the above calculations. Lenders that provide credit under small-amount credit contracts are separately levied in that capacity, by reference to their share of the total value of small-amount credit contracts provided by that subsector.

How does the levy apply to an entity with authorisation to act as both a credit provider and a broker?

An entity that falls within multiple subsectors will be levied for each of those subsectors.

Credit licensees may wish to review their authorisations with a view to rationalising any that are no longer required end of the relevant financial year as a proportion of all credit representatives in the subsector. If the credit intermediary has appointed no credit representatives, a flat levy of $1,000 is payable.

This approach means that the way ASIC’s costs are attributed will vary depending on how a credit intermediary’s business is structured. For example, an aggregator whose members are appointed as the aggregator’s credit representatives will pay a graduated levy according to the number of those members. However, an aggregator whose members hold their own Australian credit licence will pay only the flat levy, and each of that aggregator’s broker members will be required to pay their own levy as a licensee.

It will be interesting to see whether this difference results in aggregators with credit

Accordingly, a broker with authorisation to also act as a lender will pay an additional $2,000 as a minimum levy to retain that authorisation, and an additional levy if it makes loans in excess of $100m in a financial year. A lender that also holds a broking authorisation will pay an additional $1,000, plus an amount for each of its credit representatives.

Credit licensees may, therefore, wish to review their authorisations with a view to rationalising any that are no longer required.

Ruth Neal is a partner in Dentons’ (previously Gadens’) Financial Products and Services team.

She specialises in consumer credit, financial services regulation, licensing, privacy and credit reporting, anti-money laundering, payment systems and unfair contract terms.

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PEOPLE

BIG INTERVIEW

GERALD FOLEY: A NEW CHAPTER Liberty’s acquisition of nMB has opened up a number of opportunities for the aggregator, managing director Gerald Foley tells MPA editor Sam Richardson IN A normal year, an established wholesale aggregator being bought by an ambitious non-bank lender would make waves in the industry. 2017, however, is not a normal year, and the purchase of nMB by Liberty from Aussie Home Loans has had to compete for the industry’s attention against commission changes, self-regulation, and another major acquisition, as REA Group has taken an 80% stake in Smartline. Yet nMB’s purchase by Liberty both reflects and contributes to an extraordinary year in broking.

Liberty’s interest in nMB did not come entirely come out of the blue, the aggregator’s managing director, Gerald Foley, explains.

“They’ve always had a great affinity with, understanding of and relationship with the broker channel, so it makes sense at some point to have more commitment to that part of the industry, which is the only part they don’t do: they raise funds, manufacture products, have quite a broad range of products.”

The timing was certainly right for Liberty, which has profited greatly from the banks’ restrictions on lending to property investors.

Furthermore, the two companies have a history – nMB has provided aggregation services to subaggregator Liberty Network Services for three years, and nMB’s office in Melbourne’s CBD is just a block away from Liberty’s.

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Why nMB was up for sale at all is another interesting question. Aussie CEO James Symond told the industry that “while nMB has been a very positive contributor to the success of the Aussie Group, the future of Aussie’s long-term strategy is to concentrate solely on our own branded distribution footprint.”

a controlling, brand-conscious national franchise managed to last for five years.

Foley prefers to look ahead, arguing that Liberty’s resources and appetite will benefit nMB members. “I think Liberty is, for the next three years, very interested in growing through brokers who operate under their

“I think Liberty is, for the next three years, very interested in growing through brokers and growing through brokers who operate under their own brands” Foley takes a similar view of Aussie’s approach: “In a toughening, changing market, [they needed] to really focus on their branded models.” Aussie is not only looking at the next three years but at its move to 100% bank ownership, with John Symond selling his remaining 20% shareholding to Commonwealth Bank in August.

As Foley told MPA himself in late 2015, “the types of brokers that are coming to [nMB] are very different to the types of brokers that are going to Aussie”. Indeed many in the industry will be surprised that a marriage of elite independent brokers and

own brands – with a massive growth phase ahead of them, not just through nMB but through the market in general.”

Not quite business as usual Foley promises “business as usual” for nMB members over the next few months, yet the market he’s playing in is most unusual.

Like all aggregators, nMB has been told to collect more data about its members and consumer outcomes.

“The data is being collected in any event for loans being written,” Foley explains. “It’s just a matter of making sure we have more

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PROFILE Name: Gerald Foley Title: Managing director Company: National Mortgage Brokers (nMB) Years in the industry: 36 Career highlight: “When we sold nMB to Aussie, because it meant that a 10-year plan to build and grow a business resulted in a significantly known branded business identifying the value of the model that had been created and wanting to acquire us.”

Career lowlight: “Managing mortgages and products through the GFC, with all the impact it had on consumers and the market and a lot of uncertainty.”

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PEOPLE

BIG INTERVIEW

data stored on our platform and are reporting the data required.” nMB is making adjustments to its software platform to enable storing of data, although its business platform, nMB Pro, launched just last year, already integrates compliance requirements into the sales process.

Several banks have committed to taking action following the Sedgwick broker remuneration review, which called for commissions to be delinked from loan size by 2020, but according to Foley “there have been no real signals yet that there are going to be drastic changes to commission models, so my starting point is I’m not expecting that to happen … if a lender then decided ‘well, we’re going to focus more on proprietary and less on broker’ then brokers will take their business elsewhere; they will move”.

Now freed from CBA’s clutches, Foley is

and Liberty Network Services will remain separate brands.

Taking on new digital players Backed up by Liberty, Foley can now put his long-term plans for nMB into action. nMB’s Broker 2020 strategy was developed before the acquisition, aiming to help both new and experienced members develop their businesses. New brokers will be given a helping hand getting started, while nMB will help mature businesses “take it to the next level and enjoy the fruits of their very hard work over many years”.

As nMB looks to grow, Liberty’s marketing capabilities will come in useful. Liberty is the current holder of the Australian Mortgage Award for Best Industry Advertising Campaign. The challenge, in Foley’s eyes, won’t be to overcome the banks but instead

“There have been no real signals yet that there are going to be drastic changes to commission models, so my starting point is I’m not expecting that to happen” able to talk more openly about the challenges of vertical integration, but he’s also conscious that Liberty’s acquisition of nMB is itself an example of vertical integration.

“We have no plans to change our supplier panel by taking anyone off who may be in a competing space,” he insists.

“If anything I see a few new suppliers coming onto the panel; there’s more niches being created at the moment as the big banks get out of sectors.”

Foley sees three to four new lenders coming on board in niche areas such as commercial, reverse mortgages and development finance as banks increasingly abandon these areas. nMB brokers will not be paid extra for recommending Liberty products, and nMB

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the new digital players such as Uno, Tik Tok and the online real estate giants. He sees nMB working with both traditional and digital-first brokers reacting to the disruption hitting the industry.

This will require substantial assistance – and presumably investment – from nMB’s new owners. It’s for that reason the LibertynMB deal is significant, Foley concludes.

“It gives really strong ownership, very clear support for the next three years, and I think people will certainly see over the next three years some really unique, strong and supportive brokers to help new brokers, and experienced and very experienced businesses as they go through the business cycle.”

THE NUMBERS BEHIND THE LIBERTY–nMB DEAL While neither Liberty nor nMB have reported how much Aussie was paid as part of the acquisition, the numbers suggest nMB has grown substantially since acquisition by Aussie in 2012.

In 2012 nMB had:

175 brokers

$8.2bn loan book

$200m a month in mortgages By 2017 Liberty was buying a business with:

400 brokers

$14bn loan book

$292m a month in mortgages* Although REA Group’s partial acquisition of Smartline in June is difficult to compare to the nMB-Liberty deal, it’s indicative of the huge value of broking groups. REA Group paid $67m for just 80.3% of Smartline, which has smaller numbers than nMB, with 300 advisers. *An approximate figure based on Aussie’s reported loan total for nMB in 2016 Sources: Aussie-nMB-Liberty joint press release; Australian Broker; The Australian

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SPECIAL REPORT

AGGREGATORS ROUNDTABLE 2017

,

2017

AGGREGATORS ROUNDTABLE Commissions, ASIC, vertical integration – no topic was too big or too difficult for our aggregators panel, broadcasting live from Sydney at a turning point for the industry

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2017’S AGGREGATORS roundtable, broadcast live from Sydney, was always going to be a big occasion. The clue was in this year’s questions. While previous roundtables covered topics from technology to clawbacks and much in between, this year’s questions were almost all about commissions.

Aggregators have had to deal with three main challenges over the past year. Firstly, they’ve had to respond to ASIC’s Review of Mortgage Broker Remuneration, with its proposed changes to commissions and its demands for aggregators to monitor brokers

and consumer outcomes more extensively than ever before.

Secondly, aggregators’ role as the bridge between brokers and lenders has become an ever more difficult balancing act. The controversial proposals of the banks’ Sedgwick remuneration review, and broker suspicions about imminent commission cuts, have made it near impossible to satisfy both parties. Bankowned aggregators in particular are increasingly under fire from brokers.

Finally, aggregators have been playing a crucial role in the process of self-regulation

through the combined industry forum.

Indeed, several of the aggregators on our panel were part of the forum, representing their members’ interests as the future of commission is decided.

This year’s roundtable also had more audience involvement than ever, and covered 2017’s Brokers on Aggregators survey as well as questions submitted before and during the roundtable. You can find some key questions in our ‘From the Audience’ boxouts. We’ll keep on livestreaming our roundtables and encourage you to join us next time.

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SPECIAL REPORT

AGGREGATORS ROUNDTABLE 2017 THE PANELLISTS

Anja Pannek, CEO, Plan Australia

Blake Buchanan, general manager, eChoice

Brendan Wright, CEO, FAST

Mark Haron, director, Connective

Stephen Moore, CEO, Choice Aggregation Services

Tanya Sale, CEO, Outsource Financial

William Lockett, managing director, Specialist Finance Group

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ASIC’s Review of Mortgage Broker Remuneration called for aggregators to actively monitor consumer outcomes at a broker level, including pricing, features and distribution of loans among lenders.

How will you be implementing this proposal?

Not only are Australia’s aggregators having to deal with the impact of ASIC’s proposals on their broker members, but the aggregators themselves are the targets of several calls for change. That includes public reporting of remuneration, average pricing and distribution of loans, as well as far more data on why brokers have written particular loans. All of this means more costs for aggregators and potentially more intervention in brokers’ businesses, even brokers holding their own ACLs. While Choice CEO Stephen Moore welcomed ASIC’s report, when it comes to reporting he said “there’s a lot of work that needs to be done by our industry on what is the right level of reporting”.

One problem, identified by eChoice’s Blake Buchanan, is ASIC’s request to measure good consumer outcomes. “One thing we need to do is define what a good consumer outcome is, because I think that means a lot of different things to different people, and until we can get to that definition we can’t really measure it,” Buchanan points out.

That said, both Buchanan and Brendan Wright, CEO of FAST, argued that existing proprietary systems “largely have it covered” in terms of the data being recorded, and the data needed to be brought together to demonstrate whether the product solution the broker recommended was objectively the right one for the client.

While aggregators have long recorded data about their members, in its report ASIC was highly critical of the limited availability, poor quality and inconsistency of the data made available. “There hasn’t been a lot of reporting in terms of that data and consumer outcomes,” Connective boss Mark Haron told our panel.

He warned that any extra data collection needed to be implemented carefully: “You

don’t want the broker to record the data over and over again.”

According to Haron, ASIC is looking to answer the question, ‘Why did you select to go down that process and path?’ “I think a lot of brokers do a fairly good job through their disclosure requirements,” he says, “but for brokers out there, make sure you are documenting that, and in the future Connective and all other aggregators will make your compliance software reflect that.”

What ASIC is yet to do is set a timeline for implementation, but Plan CEO Anja Pannek said aggregators were already moving to improve data recording: “All of us have been very active in the industry, working with our lender partners ... as we move forward we need to work together to ensure we don’t add extra complexity and unnecessary cost to the industry.”

Tanya Sale told the panel about the changes Outsource Financial was making and how these could affect brokers. “We’ve already started making strong additions and amendments to our commissions system,” she said. “We never obtained a lot of data from our members, because being independent and not having our own proprietary software – it’s their business and they’re running it.”

In future, Outsource brokers will have to enter details on loan characteristics, such as whether the loan was principal and interest or interest only. “We’re trying to make it really easy and streamlined for our members, so it’s just drop-down … we’ll be able to identify gaps, and action that without really knowing what ASIC want or what we’re going to get from the lenders,” Sale said.

A note of caution was sounded by Specialist Finance Group’s managing director, William Lockett. “We’re at a very delicate stage moving forward,” Lockett explained. “We talk about pricing, we talk about features and distributions, but the key element of the client outcome [that] we don’t talk about is the service levels from the banks as well.”

Not only did lender service levels play an important role in a broker’s distribution, Lockett argued, but the lenders themselves

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would inevitably be the main source of data for ASIC and the aggregators. “The collection of the data fundamentally must be from the lenders … if you’ve got 80–85% going to the majors there’s a major snapshot of the data that you have,” Lockett said.

ASIC says aggregators need to recognise their influence on consumer outcomes through remuneration. Have aggregators been hiding behind lenders and brokers when it comes to taking responsibility for consumer outcomes?

Proposal 6 of ASIC’s review contained a call to action for Australia’s aggregators: “We … expect aggregators to recognise that, as the party that passes commissions from lenders to brokers, they are well placed to ensure that such remuneration is consistent with the attainment of good consumer outcomes.”

At first glance ASIC’s demand might seem innocuous, but it would represent a huge shift for those in the sector, who see themselves simply as service providers, not regulators, especially where brokers who hold their own ACLs are involved. Even before the start of our roundtable it became apparent that not all

aggregators agreed with ASIC. Connective’s submission to the Treasury called the suggestion … in light of the function “unreasonable aggregators currently play in this industry”.

During our panel discussion Connective boss Haron reiterated that point, claiming that aggregators could “not entirely and not in a significant way” influence consumer outcomes.

Instead, according to Haron, “it’s that conversation the broker has with that customer which influences their decision … where we

see how aggregators can be hiding anything; if anything a broker’s entire value proposition is to be impartial when providing an outcome.”

Some of our panel took a different view to Haron. Plan CEO Pannek argued that, when it comes to remuneration, types of loans and the conduct of individual brokers, “we do play to some extent as aggregators [in those areas of broking]; in monitoring and compliance and oversight, there’s more that we can do.”

Pannek warned, however, that the industry needed to avoid “duplicating effort” when it came to oversight.

FAST CEO Wright and Choice boss Moore held similar opinions. In fact, according to Wright, “our ability to influence the consumer outcome is how we support brokers in delivering their value proposition”. Moore argued that aggregators had to continually ‘lift the bar’ when it came to quality, keeping their lender panels competitive and being transparent about ownership, including NAB’s ownership of Choice.

Specialist boss Lockett was asked whether his members, mainly independent businesses, would resent increased intervention by their aggregators. He believed they would not: “Whilst a lot of brokers think if they hold an ACL they are completely independent, well they are to a degree, but they’ve got a duty of care not only to the consumer but also to the aggregator and the lender.”

“One thing we need to do is define what a good consumer outcome is, because I think that means a lot of different things to different people” Blake Buchanan, eChoice can influence is through better education, surveillance and training of those brokers, and ASIC’s made it very clear to aggregators that regardless of whether the broker has their own licence or are a credit rep, the level of surveillance will be the same”. eChoice boss Buchanan also took a dim view of aggregator intervention: “I just don’t

Aggregators have in the past spoken out about consumer outcomes. Outsource CEO Sale has long claimed that vertical integration and white label lending are detrimental to consumers, for example. “When I first saw this question I thought, ‘You’re joking with me; what sort of question is this?’” she told our panel. Nevertheless, Sale admitted: “We’re

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SPECIAL REPORT

AGGREGATORS ROUNDTABLE 2017 FROM THE AUDIENCE: NEGATIVE MEDIA COVERAGE How do so many uninformed details enter the media, and how is it that CHOICE magazine has any say over broker commissions?

Mark Haron: “It is something that we need to do more as an industry: to be more consultative with consumer groups. We need to engage with them and get the voice of the consumer in the process as we move into a self-regulatory structure.”

“It’s incumbent on us as an industry to really grasp this opportunity to self-regulate and get it right, otherwise we will get what the financial planning industry got” Mark Haron, Connective putting processes in place that probably should have been put in place years ago.”

Sale was one of a number of aggregators who questioned the division of responsibility between banks and aggregators. “In light of all the information and everything that’s been written over the last 12–18 months, it’s black and white that we haven’t been able to obtain certain data from the lenders,” Sale commented. “I know as an aggregator I have begged for information to be provided so we can look at what’s happening.”

It’s likely that aggregators will be held responsible for a broker’s choice of loan type, and lenders will focus on responsible lending and servicing, explained Connective’s Haron.

He added that, “as even [ASIC chairman] Greg Medcraft pointed out, it’s the banks approving

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and servicing those loans, so it’s important and incumbent upon the banks to make sure they’re collecting enough information”.

Haron suggested aggregators were letting the industry down when it came to the low retention rate of new entrants to broking. This prompted Buchanan, who deals with a large number of new entrants at eChoice, to respond that “there always will be an attrition rate because broking is extremely challenging; sometimes it can be isolating, and that’s where aggregators play a very significant role in training and into the future”.

Whether they like it or not, aggregators will end up influencing consumer outcomes through their role in the combined industry forum on self-regulation. Haron, who alongside Moore has been extensively involved in the

Tanya Sale: “You have to choose the consumer group that’s willing to listen and learn, because they keep throwing out these bombs and they’re so ill-informed it’s not funny, and then the media gives them airplay for it.”

Stephen Moore: “To state the obvious: negative media sells over positive media and we can attack that head-on, but you won’t see us doing that very often … what I think we need to do is act like leaders, and leaders step above the noise and focus on the facts. The work we’re doing as aggregators is getting facts published on the value brokers provide to Australians.”

Blake Buchanan: “We don’t really have a strong voice in the mainstream media … everybody can start doing that, particularly at the broker level. If you’re in a community you should be engaging with your community leaders and your community press and telling them what you do for residents.”

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SPECIAL REPORT

AGGREGATORS ROUNDTABLE 2017

“There’s a lot of work that needs to be done by our industry on what is the right level of reporting” Stephen Moore, Choice Aggregation Services forum, told our panel that ASIC had “made it clear that at the moment it’s very hard to get anything through the Senate through a legislative point of view, so it’s incumbent on us as an industry to really grasp this opportunity to self-regulate and get it right, otherwise we will get what the financial planning industry got”.

In our Brokers on Aggregators survey brokers rated compliance support as their biggest priority, outside of on-time commission payments and lender panel. What are you doing to improve your compliance support for brokers?

Every year, MPA’s Brokers on Aggregators survey asks which aggregator services matter most to brokers’ businesses, and the results reflect the changing fortunes of the industry.

Two years ago, IT support was riding high,

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with aggregators competing to offer the most powerful CRM systems to support growing broker businesses. Yet in 2016 it lost third place to compliance support, as brokers struggled to keep up with ever-increasing and complex demands from lenders and aggregators.

Outsource Financial received the highest scores of any aggregator for compliance support, so Sale began the conversation on how aggregators could better support brokers.

Sale explained that Outsource not only provided training for compliance but also brought in lender representatives to help brokers spot fraudulent applications.

CEO Wright told the panel that at FAST “we’ve got a robust credit advice consultant model where our credit advice consultants spend time with the brokers to help them understand whether they’re going about things the right way, whether they be a credit rep or licence holder”.

While an expert at the end of the phone still plays an important role in compliance support, it’s not the entire story, Choice boss Moore explained. “If I could switch it round, it’s not about compliance in itself; it’s about quality processes in your business that are compliant.

That’s a subtle but very important distinction,” Moore said, pointing to the need for high-quality documentation to support any recommendations brokers make. He said that Choice, 2017’s overall Aggregator of the Year, supported brokers through a mix of webinars, videos, face-to-face support, peer sessions and technical updates. eChoice’s Buchanan turned the conversation towards the identification of rogue brokers, arguing that compliance support also included monitoring and identification of these brokers.

“The compliance market is a very active market, and it’s going to take significant investment into our systems, platforms and people to manage this moving forward,” he said.

Responding both to Buchanan’s point and Haron’s earlier comment on the failure rate among new entrants, Outsource’s Sale suggested that “we have an opportunity as aggregators to cut it off at the knees … when someone calls up and says they want to join

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“We’ve got a direct voice to one of the largest financial institutions in Australia” Anja Pannek, Plan Australia the industry as a new entrant, we really need to drill down”. Sale explained that her approach was to ask potential brokers whether they had a database, network, referrals or a community to support them.

Compliance support also involves communicating regulatory and lender changes to brokers, an increasing challenge, according to Connective’s Haron. “There’s a hell of a lot of content that goes out regularly. Every fortnight there’s something going out on compliance; every PD day – and there are

webinars … compliance is about monitoring, and from a Connective point of view we’re big on using technology for that part of the process. Our idea of compliance is to be as least intrusive as possible and to make it part of the sales process.”

At Specialist Finance Group the compliance team has increased from two to eight, Lockett said. Aggregators needed to look for business competence in addition to compliance, he added. “There’s been times where we’ve said no to a broker who’s compliant but we’re just not

sure about their business practices.”

Last up was Plan CEO Pannek, who reflected on Plan’s long history of supporting brokers through the NCCP and said the aggregator did this through “regular updates and professional development, which is something we absolutely pride ourselves on.

We recognise people learn in different ways, so we communicate across a wide variety of different mediums”.

Several banks have committed to implementing the proposals of the Sedgwick review. How can an aggregator owned or part-owned by a bank balance these proposals with the needs of brokers?

As the industry works towards self-regulation

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SPECIAL REPORT

AGGREGATORS ROUNDTABLE 2017 and banks look to rebuild trust with brokers, the Sedgwick review has become the headache to beat all headaches.

Published in April just after ASIC’s report, Sedgwick’s remuneration review, sponsored by the Australian Bankers Association, made a number of proposals regarding brokers, most controversially that banks should delink commissions from loan size. Within 24 hours all four major banks and several non-majors had publicly committed to implementing all proposals of the review, a unilateral move that continues to divide banks and brokers.

For bank-owned aggregators such as FAST, the fallout from Sedgwick has involved a balancing act, CEO Wright told the panel.

“It’s quite simple: FAST happens to be an aggregator owned by a lender, but we’re an aggregation business that needs to deliver a value proposition to brokers.”

FAST is owned by NAB and took part in the combined NAB-FAST-Plan-Choice submission to the Treasury regarding commissions, which called for the calculation of upfront commission to be changed. Wright is conscious that the group has work to do: “The fact that we’re owned by a bank that

consumer outcomes, with the right level of transparency and, most importantly, that there’s a viable broker market on the back of it.”

Aggregators are not split between bankowned and independent, however; there are several in the middle. One of those is eChoice,

“When someone calls up and says they want to join the industry as a new entrant we really need to drill down” Tanya Sale, Outsource Financial needs to line up behind Sedgwick – which they all have to, we’re committed to that – means that we need to ensure it’s done in light of the third party industry and continuing to deliver to brokers.”

NAB also owns Choice, and according to Moore, “Choice being owned by NAB is something I say with pride, and the reason I say that is I know Choice is a better business because of the investment and support NAB has provided”. Choice is part of the combined industry forum, said Moore, observing that “in those forums we have the same vested interest, and the vested interest is for a successful industry, and that means with the right

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which was taken off the ASX last year but continues to be publicly owned. Brokers should “absolutely not” be concerned about the influence of shareholders, Buchanan insisted.

“We go through the same meetings that other corporations do, but they have no influence on the day-to-day management of our business.”

Connective is part-owned by Macquarie Bank, Haron noted. He said Macquarie had to work just as hard to get business and work across all aggregators, not just Connective.

“It’s inherently incorrect to do it and would reflect very poorly with other brokers and aggregators, so it’s just not going to happen.”

It’s not yet clear that banks will actually

implement the proposals of the Sedgwick review, suggested eChoice’s Buchanan. “Let’s take a breath, read this out, because there will be a consultative process. When Sedgwick was handed down I had no less than 10 phone calls from the leaders of these institutions asking my opinion.”

Plan CEO Pannek gave the panel an idea of how this consultation worked in practice, telling them how Plan had convened a thought leader council of brokers to advise NAB’s submission to the Treasury. Pannek – who was part of the original Challenger team that bought Plan – said the advantage of ownership is “we’ve got a direct voice to one of the largest financial institutions in Australia”.

Even the aggregators on our panel not fully owned by banks agreed that the financial investment of banks in broking would help, not hinder, brokers in commission reform.

“The investment by banks into mortgage broking and aggregation sends a very important message that they actually see the value of the industry and getting behind it,” said Connective’s Haron. Similarly, Lockett from Specialist Finance called it a “tremendous advantage …

If we didn’t have the bank ownership in aggregation the concern would be

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FROM THE AUDIENCE: REPORTING POOR BEHAVIOUR Are aggregators going to take peer reporting of poor behaviour more seriously?

Blake Buchanan: “There’s a real opportunity for us to be more transparent about the separation of brokers from our business and the reasons behind that, and information should be shared to clean up our industry … [but] I think we need to give everyone the opportunity to come out and explain what happened.”

“[With] the Sedgwick report, the fact that it was commissioned for the banks and by the banks gives us a right to be a little bit cynical” William Lockett, Specialist Finance Group a lot greater, but now we find, with NAB’s involvement, Macquarie’s involvement and CBA’s involvement, that’ll tip the ledger back to being a little more even keel”.

The independent brokers on our panel remained suspicious, however, of the banks’ true intentions. Lockett was harshly critical of Sedgwick’s review, both of its quality and background: “The banks have probably gone through a few years of bad publicity, none worse than now but not third party derived, but [with] the Sedgwick report, the fact that it was commissioned for the banks and by the banks gives us a right to be a little bit cynical.”

Banks could have introduced reforms years ago without a review, Lockett said. He saw Sedgwick as “certainly not impartial and independent”.

Finally, MPA turned to Outsource boss Sale, long an advocate of independent

ownership, to ask whether independent ownership actually meant an independent voice, given the importance of lender partners. Sale retorted that while bankowned aggregators might be “guided” in their comments to the media, Outsource could speak more independently. “I can be quite transparent with what I’m going to say, [but] I’m never going to go out and bag our lending panel. Our lending panel are our business partners, and I want to make that quite clear.”

However, Sale also believed that the banks’ investment in the broker channel could work to its advantage in the short term: “I’m a big fan of independence, because that’s where the third party side of it was born.

Saying that, it’s been fantastic that the likes of NAB – heavily NAB, I must say – have come out in support of our industry.”

Anja Pannek: “I think there needs to be a fair degree of rigour with whatever process we take forward. These are people’s careers and livelihoods, and they’re often very complex matters with certain circumstances, from a number that I’ve seen … this is really serious stuff.”

William Lockett: “Reporting on brokers is a given … [but] we’ve got to be comfortable with our members and brokers underneath that applying their trade in a reasonable and professional way … I know the lenders are concerned where there’s still a lot of mortgage brokers who are fully compliant but are simply not applying their trade on a regular and consistent basis, in order to improve ... that’s our responsibility.”

You can watch the full aggregators roundtable, including audience questions, for free on MPA’s website: www.mpamagazine.com.au/tv/

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Strength through adversity

As most brokers would know, running a small business is no easy task.

Maya Breen explores the challenges facing SMEs in 2017 and how brokers can help them succeed “BUSINESS CONDITIONS are holding at the best levels in over nine years,” wrote CommSec senior economist Savanth Sebastian in an August 2017 Economic Insight. The update also revealed that business borrowings have surged. “The strength in business conditions is seemingly translating through to a lift in commercial and lease loans – although it is still early days,” Sebastian said.

According to the CommSec update, commercial finance increased by 13.7% in June, up 29.6% on the previous year, after falling 6.9% in May. Fixed lending within the commercial space was up 10.8%, while revolving credit rose by 25.9%.

However, brokers, who are often small business owners themselves, know well that maintaining and growing a business is no easy journey. Although business conditions and sentiment are up, Suncorp’s SME Vs Me Report (2017) revealed that many SMEs continue to report that each year they find it more difficult to run a business. MPA heard from lenders ING DIRECT, Thinktank and Suncorp on the challenges facing SMEs in 2017 and how brokers can help them through.

Challenges for Australian small businesses Often referred to as the ‘engine room’ of the Australian economy, small businesses make up

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99% of all businesses and contribute $380bn to the economy. In its Budget 2017/18, the government said it was creating the right environment for Australian small businesses to thrive, of which there are over three million. Its main points involved reducing the tax burden to help SMEs invest and grow; extending the $20,000 instant asset write-off for another 12 months to 30 June 2018; and lifting the turnover threshold to $10m. The government said the measures would bolster cash flow and small business activity, giving SMEs more flexibility to recruit staff and boost wages.

Peter Vala, head of sales and distribution at Thinktank Commercial Finance, believes the latest budget is good news for any SMEs

associated with infrastructure. “Whether they are in labour hire, equipment hire, surveying, engineering, other peripheral services or the supply of a range of necessary physical products, it is a generational period for this sector, which looks set to remain vigorously supported by both sides of government for several years yet,” he says. “The commitment to reducing red tape looks good but, like

most, we’ll believe it when we see it. Likewise, reducing the tax rate over 10 years will be a welcome development for all corporate SMEs, yet how much of that is finally enacted remains in question.”

A recent report by Prosperity Advisers Group listed ASIC’s top three nominated reasons businesses end up collapsing as inadequate cash flow or high cash use;

“Your average SME needs to borrow more, and they need to borrow more regularly” John Kolyvas, ING DIRECT

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FEATURES

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BIG AND LITTLE WORRIES Some things keep SMEs awake at night more than others.

Biggest concerns: Neglecting business planning: just 22% of owners have a specific plan to improve the value of their businesses Neglecting succession planning: although 49% believe it to be an urgent need, 90% of business owners do not have a succession plan at the ready Smallest concerns: Selling their business (and getting the highest price) Access to funding Source: SME Research Report 2016/17 – Prosperity Advisers Group

lack of effective strategic management; and trading losses. Vala adds that other common challenges predominating in 2017 include investing in innovation, customer satisfaction, loyalty, time management and rising utility costs. “For our part, the most recurrent and persisting challenges tend to come down to managing cash flow through the typical cycles associated with small business; and having suitably structured finance arrangements in place across property, equipment, working capital, debtors and stock remains a critical piece.”

Consumer confidence naturally has a flow-on effect on the success of a small business, and ING DIRECT’s treasurer, Michael Witts, points out how understanding the consumer outlook can be a challenge for SME owners. “The consumer side of the economy is dealing with very high levels of household debt, and minimal wages growth; they’re running down their savings, and that’s eroding consumer sentiment and consumers’ confidence.” In contrast, he says current low interest rates are contributing to a fairly optimistic business sentiment. “So there’s a mismatch between what the businesses think

“For our part, the most recurrent and persisting challenges tend to come down to managing cash flow through the typical cycles associated with small business” Peter Vala, Thinktank Commercial Finance is going to happen and what the consumers are happy to spend to make happen.”

John Kolyvas, ING DIRECT’s national sales manager, commercial, adds that an ongoing challenge for SMEs is finding and retaining staff. “Unemployment remains reasonably low and it really is difficult to find and more importantly to retain good staff.” Along with managing staff, Kolyvas

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says changes in the banks’ lending appetite is another area SMEs need to keep in the loop with. “It’s a volatile period at the moment and banks are regularly reviewing what their appetite is for certain sectors, and that could impact a lot of SME customers without them even knowing that they’re going to be impacted.”

Although business conditions are upbeat, with NAB’s Moments That Matter report (March 2017) showing its index rose 2 points to +14 index points, a record high since early 2008 and well above the long-run average of +5, many SMEs appear to be feeling strained.

Referring to its SME Vs Me report (2017), Suncorp’s national manager small business and commercial, Robynne Frost, pointed out that more than two thirds of owners have experienced personal challenges such as fatigue, financial stress, loss of motivation and even relationship strain as a result of work-related issues. “They believe that they are having to run hard to stay in the same spot. In fairness, that’s a comment we’ve been hearing since the GFC, but we are hearing it more consistently than ever.”

When it comes to cash flow management, the report also found that one third of SMEs rely on personal finances to manage their cash flow. “Despite more than half of SMEs admitting it’s important to keep personal and business finances separate, our findings highlight that many SMEs prioritise their business over their personal wealth and wellbeing,” Frost says.

Value of an SME client The SME client can be a valuable addition to your customer base for more reasons than one, and many business owners are in more need of a trusted broker than they, or even you, may realise. in comparison to the average residential client, ING DIRECT’s Kolyvas says: “Your average SME needs to borrow more, and they need to borrow more regularly. They’re investing in their business

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“Self-employed brokers have an inherent capability to position themselves as trusted advisers to these customers, because they are small business owners themselves” Robynne Frost, Suncorp all the time, and they’re usually buying because they need money to make money.

So, in that sense, your average SME would be highly valuable to a broker.”

Long-term SME clients are the most valuable to a broker, according to Thinktank’s Vala. “A broker that can continually anticipate and respond to clients’ needs over time place themselves in a position of trust and will be the first person called when the next need comes up. Some transactions or engagements might occasionally end in little or no revenue, but with a strong and trusted relationship in place, value will be produced both directly through commissions and indirectly through positive referrals and introductions.

“Other transactions though, such as a property purchase, refinance or equity release, can see high levels of upfront and trail commission earned. As SME clients commonly have a wide range of financial and advice needs,

the value spectrum is a wide one that can benefit a broker’s business in many ways.”

The massive size of the SME market in itself offers a prime growth opportunity for brokerages, Suncorp’s Frost says. In addition, she points out that 30% of a broker’s existing customer base is often made up of SME clients, so if you’re a broker who is already specialising in the commercial lending space, it would be worth your time having deeper conversations with these clients to uncover what matters most to their businesses and identify opportunities that go beyond just a home or commercial loan.

Even if you are a broker who deals mainly with residential clients, ING DIRECT’s Kolyvas says if your residential customer happens to be a small business owner, a full needs analysis may identify further business borrowing needs.

And as if SMEs weren’t valuable enough already, Frost highlights an extra bonus they offer, as brokers may learn some useful ways to strengthen and grow their own brokerages by listening to and learning from their small business clients.

What’s more, Kolyvas says your average SMEs are often savvy, effective networkers.

“They’re more involved with other similar business people, so if you’re doing a good job of looking after their needs, the word can spread quite quickly – a lot quicker than what

5 HIGH-RISK INDUSTRIES FOR SMES The industries below have the highest number of businesses that are likely to experience financial stress in the next year.

2.663 businesses

1,366 businesses

1,268 businesses

934 businesses

Construction

Professional, scientific and technical services

Retail trade

Accommodation and food

812 businesses Transport, postal and warehousing

Source: SME Research Report 2016/17 – Prosperity Advisers Group

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FEATURES

COMMERCIAL LENDING

SMES NEED HELP TO GROW Many businesses want to grow but are just not sure how to go about it

it would be if you just focused on consumers.”

Witts adds: “SMEs really want someone who is a trusted adviser who can actually understand their business model and their exposures and assist them in managing those risks accordingly.”

Helping your SME clients

77% of business owners have no detailed plan for their businesses’ future growth

31% have no trusted adviser

44% are working to improve business and financial management skills, but the remainder can’t find time in their day to make a detailed plan Source: SME Research Report 2016/17 – Prosperity Advisers Group

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Without a doubt, having SMEs making up some portion of their client base can offer many benefits to a broker, but how can brokers make sure they are maximising their value to the SME? “The brokers need to have an affinity with what their small business clients are going through,” says ING DIRECT’s Witts. Brokers should stay ahead of the curve on changing lender appetite by regularly checking in with the lender BDMs and having in-depth discussions with broker peers, Kolyvas suggests. “When it comes to commercial lending, there’s a lot of commercial specialist brokers and they’ve got a good handle on bank appetite because they’re putting up transactions on a regular basis and they can see the tides changing quite early.

“It’s not unusual for a good commercial broker to sit in front of their business customer once a year and do a full review – and that’s not a banking review, that’s also a business review,” he says. This can also be undertaken with the customer’s accountant, “because the accountant will also have a good understanding of what’s happening in the business and what might be coming up”.

Thinktank’s Vala says new opportunities could involve “debtor finance or restructuring and consolidating commitments to ease the burden on cash flow and increase profitability.

It might be offering different insurance options or introducing them to the advantages of a self-managed super fund where appropriate. There is no substitute, however, for just keeping in regular contact with small business clients, listening to them and then acting or connecting them with other advisers who can help with specific needs.”

Doing as much research as possible before a client meeting can be beneficial for both parties, Vala says. “Find out what you can about the client’s industry, and where their business sits within it. Get a sense of the influences that have been and will drive their market, and know what the key issues look to be. Request their most recent set of financial statements and review their personal SP to see how things have been trending both in business and away from it, as often the two are closely linked.”

Vala says you should cover the whole spectrum with your client, from major concerns in their day-to-day operations all the way through to their retirement plans. “Armed with this knowledge, the follow-up can involve either a high-level step-by-step plan or a more comprehensive summary document that identifies notable issues, possible needs and potential areas where you can add value to that client and his or her business.”

Suncorp’s Frost believes it’s worth the broker’s while to make it as easy as possible for SMEs to reach out to them for help. She says four factors that influence who SMEs choose to do business with include regular contact points, as 41% of SMEs rate highly consistent and easy interaction with their broker; knowledgeable staff, as 78% of SMEs value monthly or quarterly contact with staff who have a strong knowledge base to help with their business needs; and a hassle-free switchover offering the right products, an easy onboarding process and speed.

Four in 10 Australian SMEs report that they look to a trusted adviser to work through their business challenges, Frost says.

“Significantly, this adviser is not necessarily a professional, such as an accountant, so that highlights a huge opportunity for both SMEs and brokers,” she suggests.

“Self-employed brokers have an inherent capability to position themselves as trusted advisers to these customers, because they are small business owners themselves.”

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THE STAR SYDNEY, 27 OCTOBER 2017

AWARD SPONSORS

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EVENT PARTNER

Famous names and fresh disruptors feature among the finalists for this year’s ‘Oscars of the Mortgage Industry’ THIS OCTOBER, The Star Sydney will come alive for an awards ceremony without equal. Amid trophies, dinner and champagne, the industry’s crème de la crème will celebrate the 16th Australian Mortgage Awards and the brokers, aggregators and lenders who have outperformed all others over the past year.

The AMAs have taken place without exception since 2001 and span a period of enormous change for the industry. Winning an AMA remains a career-defining moment for an elite group, many of whom will be in attendance on the night, continuing the tradition. With an everincreasing number of nominations, being a finalist for the AMAs has become a notable achievement in itself.

Thirty-one trophies will be presented at this year’s awards, as new and veteran brokers rub shoulders with leading figures in banking, aggregation and technology. Sonia Kruger, one of Australia’s most recognised television and entertainment personalities, is taking time out of The Voice Australia to be MC for the evening. Entertainment will be provided by the acoustic act the Luke Zanc Duo and high-energy cover band Furnace and the Fundamentals, making the most out of the harbour city’s premier events venue.

The 2017 AMAs feature new awards for major, non-major and nonbank lenders. In addition to input from the AMA judges, these categories will also be decided by the results of MPA’s Brokers on Banks and Brokers on Non-Banks surveys, meaning brokers will directly influence these awards. Finalists for the top awards – Australian BDM, Young Gun, Brokerage and Broker of the Year – will be announced on the night.

MPA, alongside our publisher Key Media, is proud to present the professionals and organisations that have stood out from the crowd this year. We’d like to thank all those who submitted nominations and all the sponsors who make the AMAs a night to remember.

We look forward to toasting your achievements at The Star Sydney on Friday 27 October.

OFFICIAL PUBLICATIONS

A MESSAGE FROM OUR EVENT PARTNER Westpac is delighted to continue its partnership with the Australian Mortgage Awards in 2017. With so much happening right now, it is more important than ever to pause, take a step back and celebrate exceptional service leadership.

When I reflect on what makes our industry great, it really comes down to three core factors – excellent customer service, innovation leadership and delivering great customer outcomes. The three are intrinsically linked and the Australian Mortgage Awards recognises those who have excelled in all these areas.

Westpac is proud to partner with the Australian Mortgage Awards in its 16th year as these values closely mirror our own. We work hard to constantly innovate and improve our products and services to ensure they meet the diverse and changing needs of all our customers. We remain laser focused on building strong and deep relationships with broker partners and helping customers into their homes in a responsible way.

It’s a great honour just to be nominated for an AMA. We wish all the finalists the very best of luck.

Tony MacRae General manager, third party distribution, Westpac Group

ORGANISED BY

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AUSTRALIAN MORTGAGE AWARDS FINALISTS 2O17 MOST EFFECTIVE ONLINE PRESENCE - LENDER

MOST EFFECTIVE ONLINE PRESENCE – BROKER

MOST EFFECTIVE ONLINE PRESENCE - AGGREGATOR

The internet is an important medium for communication and day-to-day business transactions. This category recognises the lender that has best harnessed this medium to provide brokers with practical, effective and easily accessible facilities to help them with their businesses. Criteria include: the business’s key objectives behind the website; website design and functionality; and features and quality of content, eg product information, pricing tools, and broker resources.

The internet is an important medium for communication and day-to-day business transactions. This category recognises the brokerage business that has best harnessed this medium.

Criteria include: the business’s key objectives behind the website; website design and functionality; and features and quality of content that optimise customer engagement and lead generation.

The internet is an important medium for communication and day-to-day business transactions. This category recognises the aggregator that has best harnessed this medium to provide brokers with practical, effective and easily accessible facilities to help them with their businesses. Criteria include: the business’s key objectives behind the website; website design and functionality; and features and quality of content, eg CRM navigation, product information.

FINALISTS • ANZ • Commonwealth Bank of Australia • Heartland Seniors Finance • Liberty Financial • Pepper Money • St George • Suncorp • Westpac

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FINALISTS • Astute Ability Group • Black and White Finance • Empower Wealth Mortgage Advisory

FINALISTS • Astute Financial Management • Connective

• Entourage Finance

• eChoice

• Intuitive Finance

• Mortgage Choice

• My Mortgage Freedom

• My Local Aggregation

• N1 Loans • Option Finance • PFS Financial Services • Violeta Finance

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EVENT PARTNER

BANKWEST BEST AGGREGATOR BDM This award recognises the aggregator BDM who has displayed excellence over the past 12 months. Criteria include: nominee’s accessibility and communication; demonstrated understanding of their brokers’ businesses; nominee’s product knowledge and how the BDM adds value to the brand he/she represents and the broker channel.

FINALISTS • Kiky Tse, Choice Aggregation • Fiona Brown, Connective • Jayden Cheers, eChoice • Mark Lewis, FAST • Anthony Zveglic, Finsure Finance & Insurance

AGGREGATOR OF THE YEAR

AGGREGATOR OF THE YEAR

Aggregators are the most important link between mortgage brokers and lenders.

This award recognises the aggregator with up to 500 brokers that has displayed excellence over the past 12 months. This category is open to both aggregators and subaggregators.

Criteria include: accuracy and timeliness of commission payments, quality of lending panel, IT and CRM support, broker communication, BDM support, compliance support, training and education, and lead generation.

Aggregators are the most important link between mortgage brokers and lenders.

This award recognises the aggregator with over 500 brokers that has displayed excellence over the past 12 months.

Criteria include: accuracy and timeliness of commission payments, quality of lending panel, IT and CRM support, broker communication, BDM support, compliance support, training and education, and lead generation.

(UP TO 500 BROKERS)

FINALISTS • Astute Financial Management • eChoice • Giant Finance Group

• Bijan Robilliard, Loan Market

• Liberty Network Services

• Suzi Trajanovski, Loan Market

• Outsource Financial

• James Cerolini, My Local Aggregator

• Smartline Personal Mortgage Advisers

• Colin Hawkins, PLAN Australia

• Specialist Finance Group

(OVER 500 BROKERS)

FINALISTS • Choice Aggregation • Connective • FAST • Finsure Finance & Insurance • Loan Market

• Peter Bryant, Vow AWARD SPONSOR

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AUSTRALIAN MORTGAGE AWARDS FINALISTS 2O17 BEST NON-BANK BDM

BEST NON-MAJOR BANK BDM

BEST MAJOR BANK BDM

This award recognises the non-bank BDM who has displayed excellence over the past 12 months. Considerable weight will be placed on nominations that come directly from the broking community.

Criteria include: nominee’s accessibility and communication; demonstrated understanding of their brokers’ businesses; nominee’s product knowledge and how the BDM adds value to the brand he/she represents and the broker channel.

This award recognises the non-major bank BDM who has displayed excellence over the past 12 months. Considerable weight will be placed on nominations that come directly from the broking community. Criteria include: nominee’s accessibility and communication; demonstrated understanding of their brokers’ businesses; nominee’s product knowledge and how the BDM adds value to the brand he/she represents and the broker channel.

This award recognises the major bank BDM who has displayed excellence over the past 12 months. Considerable weight will be placed on nominations that come directly from the broking community.

Criteria include: nominee’s accessibility and communication; demonstrated understanding of their brokers’ businesses; nominee’s product knowledge and how the BDM adds value to the brand he/she represents and the broker channel.

FINALISTS

FINALISTS

FINALISTS

• Lili Amphone, Australian First Mortgage

• Sonia Partol, AMP Bank

• Donovan Blanch, ANZ

• Christopher Emanuel, Bank of Melbourne

• John Kakakios, ANZ

• David Wilson, Firstmac • Suzanne Hemsworth, La Trobe Financial • Alf Vasta, Liberty • Anthony Wickremasinghe, Liberty • Mark Konecny, National Corp • Nicole Campbell, Pepper Money • Michelle Sargeant, Pepper Money • Darren Stratford, RESIMAC

• Ben Magnus, Bankwest • Adam Biffen, Bankwest • Geoff Murphy, ING DIRECT • John Loukadellis, Macquarie Bank • Simon Adam, ME • Ron Galvan, St. George • Sally Hillman, St. George • Dino Pacella, Suncorp

• Julianne Brown, Commonwealth Bank of Australia • Matthew Poulter, Commonwealth Bank of Australia • Andrew Thompson, Commonwealth Bank of Australia • Alex El Daghar, National Australia Bank • Daniel Puca, National Australia Bank • Theodore Tekidis, Westpac • Tamieka Trott, Westpac

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EVENT PARTNER

NEW

NEW

NEW

NON-BANK OF THE YEAR

NON-MAJOR BANK OF THE YEAR

MAJOR BANK OF THE YEAR

This award recognises the non-bank that has displayed excellence in the mortgage industry over the past 12 months. Fifty per cent weighting will be given to the results of the 2017 MPA Brokers on Non-Banks survey.

Criteria include: business achievements, including service levels, turnaround times, product ranges, eg residential, commercial and pricing; year-over-year growth and market share; service innovations; overall support of and contribution to the third party distribution channel; and demonstration of positive impact on the wider community.

This award recognises the non-major bank that has displayed excellence in the mortgage industry over the past 12 months. Fifty per cent weighting will be given to the results of the 2017 MPA Brokers on Banks survey.

Criteria include: business achievements, including service levels, turnaround times, product ranges, eg residential, commercial and pricing; year-over-year growth and market share; service innovations; overall support of and contribution to the third party distribution channel; and demonstration of positive impact on the wider community.

This award recognises the major bank that has displayed excellence in the mortgage industry over the past 12 months. Fifty per cent weighting will be given to the results of the 2017 MPA Brokers on Banks survey. Criteria include: business achievements, including service levels, turnaround times, product ranges, eg residential, commercial and pricing; year-over-year growth and market share; service innovations; overall support of and contribution to the third party distribution channel; and demonstration of positive impact on the wider community.

FINALISTS

FINALISTS

FINALISTS

• Better Mortgage Management

• AMP Bank

• ANZ

• Bluestone Mortgages

• Bankwest

• Heartland Seniors Finance

• ING DIRECT

• Commonwealth Bank of Australia

• Homeloans

• Macquarie Bank

• Westpac

• La Trobe Financial

• ME

• Liberty

• St. George Banking Group

• Mortgage Ezy

• Suncorp

• Newcastle Permanent Building Society • Pepper Money

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AUSTRALIAN MORTGAGE AWARDS FINALISTS 2O17 BEST INDUSTRY ADVERTISING CAMPAIGN This award recognises the best belowthe-line (B2B) advertising campaign conducted by an organisation marketing to mortgage brokers. The winner of this category will be the campaign that has had the greatest impact on the industry over the last 12 months.

FINALISTS • ANZ • Bluestone Mortgages • La Trobe Financial • Liberty

CBA BROKER OF THE YEAR - PRODUCTIVITY

BEST INDUSTRY SERVICE Industry services play an extremely important role within the mortgage industry. This award recognises the service provider that adds the most value to its customers’ businesses.

Eligible service providers include but are not limited to software and technology, legal, compliance, training and education. Criteria include: service provider’s value proposition; industry’s need for the service; how the service has added value; and overall commitment of the organisation to its customers.

FINALISTS

• Pepper Money

• Boutique Offshore Solutions • Cornerstone Mentoring • Loanworks Technologies • NextGen.Net • QED CompliFast

FINALISTS • Josh Egan, Astute Melbourne City South/Gippsland • Moshe Moses, Astute Sydney City Central • Justin Doobov, Intelligent Finance • Andrew Mirams, Intuitive Finance

• National Australia Bank

• CoreLogic

This award recognises the broker who has focused on productivity improvements through increased office efficiencies and quality submissions over the past 12 months.

• Josh Gilbert, Loan Market • Brenden Lowbridge, Money Links • Daniel O’Brien, PFS Financial Services • Kevin Agent, The Australian Lending & Investment Centre • Mark Davis, The Australian Lending & Investment Centre

AWARD SPONSOR

Mark Davis The Australian Lending & Investment Centre

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Maxine Farmer Maxon Finance Pty Ltd

Oliver Li Option Finance Australia Pty Ltd

Nelson Bedoya Loan Market

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EVENT PARTNER

PEPPER MONEY BROKER OF THE YEAR – SPECIALIST LENDING

ALI GROUP BROKER OF THE YEAR - INSURANCE

This award recognises the broker who has displayed excellence over the past 12 months in specialist lending.

Criteria include: quality of submissions; conversion rates; lead generation; client retention; overall customer service and loan volumes (to a lesser extent).

This award recognises the broker that provides insurance (mortgage protection and life) as part of their overall offering who has displayed excellence over the past 12 months.

Criteria include: quality of submissions; conversion rates; lead generation; client retention; the broker’s ability to demonstrate a positive attitude towards mortgage protection and life insurance; their role as an advocate within the industry; overall customer service and loan volumes (to a lesser extent).

FINALISTS • Stuart Styles, Arthurmac & Co • Vincent Moore, Entourage Finance • Giulio Avian, Fundsnational

(MORTGAGE PROTECTION AND LIFE)

• Scott Vine, Lending Solutions Group

FINALISTS

• Margaret Wilcock, MW Mortgage & Wealth

• Darryl Bevan, Direct Financial

• Dianne Fraser, Aussie

• Genene Ethell, Non-Conforming Loans

• Nicholas Kakalis, Finance Unlimited

• Oliver Li, Option Finance Australia

• Phil Rogers, Loan Market

• Ian Robinson, Robinson Sewell Partners

• James Florence, Mortgage Choice • Robert Trewin, Robert Trewin Mortgage Broking • Frank Xiriha, Zebra Financial

AWARD SPONSOR

AWARD SPONSOR

Celebrate your success FRIDAY 27 OCTOBER 2017 THE STAR, SYDNEY Book your table now at www.australianmortgageawards.com.au

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AUSTRALIAN MORTGAGE AWARDS FINALISTS 2O17 YOUNG GUN OF THE YEAR (FRANCHISE) This award recognises the franchise broker who has displayed excellence in their first two years as a mortgage broker. To be eligible nominees must have been accredited as brokers on or after 1 April 2015. Criteria include: loan volumes, lead generation, quality of submissions, conversion rates, and overall customer service.

FINALISTS • Scott Baker, Aussie Torrensville • Nick Ash, Loan Market • Lee Wisniewski, Loan Market Melbourne CBD • Paddy O’Sullivan, Mortgage Choice • Michelle Kerr, Nectar Mortgages • Gary Liebregts, Smartline Personal Mortgage Advisors • Sam Panetta, Yellow Brick Road Dee Why

ING DIRECT YOUNG GUN OF THE YEAR – INDEPENDENT This award recognises the independent broker who has displayed excellence in their first two years as a mortgage broker. To be eligible nominees must have been accredited as brokers on or after 1 April 2015. Criteria include: loan volumes, lead generation, quality of submissions, conversion rates, and overall customer service.

FINALISTS • Mustafa Haddad, Anne Street Partners

• Misa Huynh, Smartmove

• Chris Raymond, Australian Credit & Finance

• Natasha Choi, The Australian Lending & Investment Centre

• Redom Syed, Confidence Finance

• Joe Xianjun Zhou, The Financiers Group

• Matthew Ford, Finestream Capital • Nathan Vecchio, Hunter Galloway • Ashleigh Patterson, Momentum Wealth Finance

• Nathaniel Nhan Truong, The Loan Lounge

AWARD SPONSOR

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EVENT PARTNER

ANZ BROKER OF THE YEAR – COMMERCIAL This award recognises the broker who specialises in commercial real estate, investment finance, SME/debtor finance, asset and leasing finance who has displayed excellence over the past 12 months. Criteria include: residential to commercial lending ratios, loan volumes, year-over-year growth, lead generation, client retention, quality of submissions, conversion rates, and overall customer service.

FINALISTS • Kevin James Wheatley, Bayside Residential and Commercial Mortgages • George Karam, BF MONEY • Daniel Holden, Holden Capital • Daniel O’Brien, PFS Financial Services

• Jason Arnold, Quattro Finance & Advisory • Ian Robinson, Robinson Sewell Partners • Jeff Schembri, Schembri Financial Consulting

AWARD SPONSOR

FBAA BROKER OF THE YEAR – INDEPENDENT This award recognises the broker in an independent operation who has displayed excellence over the past 12 months. Criteria include: loan volumes, year-over-year growth, lead generation, client retention, quality of submissions, conversion rates, and overall customer service.

FINALISTS • Darryl Bevan, Direct Financial • Damien Roylance, Entourage Finance • Justin Doobov, Intelligent Finance • Daniel O’Brien, PFS Financial Services • Simon Orbell, Smartmove

• Karen Bashford, South Coast Business & Financial Solutions • Rachelle Eyndhoven, Sphere Finance • Kevin Agent, The Australian Lending & Investment Centre • Mark Davis, The Australian Lending & Investment Centre

AWARD SPONSOR

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AUSTRALIAN MORTGAGE AWARDS FINALISTS 2O17 LA TROBE FINANCIAL BEST CUSTOMER SERVICE FROM AN INDEPENDENT OFFICE

BLUESTONE BROKERAGE OF THE YEAR – DIVERSIFICATION

Customer service is an incredibly important measure of any broker/brokerage’s long-term sustainability and success. This award recognises the brokerage office or branch that has displayed excellence over the past 12 months in maintaining consistent and sustainable customer service standards.

This award recognises the brokerage that has implemented the most effective diversification business model. Criteria include: products and services offered; year-over-year growth; how the diversification offering has impacted on business growth over the past 12 months; customer service proposition, and the business’s value proposition and strategy around stakeholder engagement.

FINALISTS

NEXTGEN.NET NEW BROKERAGE OF THE YEAR This award recognises the best brokerage office or branch that has been in operation for less than two years. To be eligible a business must have started on or after 1 April 2015.

FINALISTS • Ayers Home Loans • Black and White Finance • Choice Home Loans Coffs Harbour and Woolgoolga

• 1st Street Financial

FINALISTS

• Bell Partners Finance

• 1st Street Financial

• Connected Finance

• Assured Home Loans

• Empower Wealth Mortgage Advisory

• DPN

• Entourage Finance

• Finance Unlimited

• Ikaya

• Thatcher & Co Finance Specialists

• Home Loan Connexion

• Loan Market Berkeley Vale

• The Limitless Group

• N1 Loans

• PFS Financial Services

• Thomas Magdalene Finance Group

• Smartmove

• Thomas Magdalene Finance Group

• TM Finance Group

• Wholistic Financial Solutions

• Finance Made Easy

• Entourage Finance • Loan Market Perth CBD • Neue Black • Sunraysia Home Loans

• Wilson Financial AWARD SPONSOR

AWARD SPONSOR

AWARD SPONSOR

MORTGAGES

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EVENT PARTNER

ANZ BROKERAGE OF THE YEAR (1-5 STAFF)

GIANT FINANCE GROUP BROKERAGE OF THE YEAR (6-20 STAFF)

This award recognises the brokerage operation with 1–5 staff (or full-time equivalents) that has displayed excellence over the past 12 months. Criteria include: loan volumes; year-over-year growth; lead generation; client retention; quality of submissions; conversion rates; customer service proposition; and the business’s value proposition and strategy around stakeholder engagement and broker training and development.

This award recognises the brokerage operation with 6–20 staff (or full-time equivalents) that has displayed excellence over the past 12 months. Criteria include: loan volumes; year-over-year growth; lead generation; client retention; quality of submissions; conversion rates; customer service proposition; and the business’s value proposition and strategy around stakeholder engagement and broker training and development.

FINALISTS

FINALISTS

• Astute Ability Group

• 1st Street Financial

FINALISTS

• Bell Partners Finance

• Alliance Mortgage Solutions

• Home Loan Connexion

• Financially Healthy

• BF MONEY

• Home Loan Experts

• FP3

• Centric Wealth

• N1 Loans

• PFS Financial Services

• Entourage Finance

• Oxygen Home Loans

• Schembri Financial Consulting

• Intelligent Finance

• Shore Financial

• The Financiers Group

• Intuitive Finance

• Smartmove

• Unique Finance Services

• One Network Broking

• The Australian Lending & Investment Centre

• Red & Co

AWARD SPONSOR

AWARD SPONSOR

ME BROKERAGE OF THE YEAR (OVER 20 STAFF) This award recognises the brokerage operation with over 20 staff (or full-time equivalents) that has displayed excellence over the past 12 months.

Criteria include: loan volumes; year-over-year growth; lead generation; client retention; quality of submissions; conversion rates; customer service proposition; and the business’s value proposition and strategy around stakeholder engagement and broker training and development.

AWARD SPONSOR

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AUSTRALIAN MORTGAGE AWARDS FINALISTS 2O17 2016 WINNERS

AFM Best Customer Service from an Individual Office – Smartmove

Best Non-Major Bank BDM – John Loukadellis, Macquarie Bank

Best Non-Bank BDM – Alf Vasta, Liberty

Pepper Broker of the Year Non-Conforming – Stuart Styles, Arthurmac & Co

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NextGen.Net New Brokerage of the Year – Cairns Mortgage Brokers

ME Bank Brokerage of the Year Independent (more than 6 staff) – The Australian Lending & Investment Centre

Best Major Bank BDM – Shannon Gibbons, Westpac

Aggregator of the Year ( an 500 brokers) – Astute Financial Management

Best Aggregator BDM – Chris Straw, AFG

Best Community Engagement – 1st Street

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29/08/2017 3:12:53 PM

EVENT PARTNER

TO BE ANNOUNCED ON THE NIGHT…

AUSTRALIAN BDM OF THE YEAR

NAB AUSTRALIAN BROKERAGE OF THE YEAR

This award recognises the most outstanding BDM in Australia regardless of industry segment, and is one of the highest accolades offered to a BDM in the mortgage industry.

The finalists in this category comprise the winners of the individual BDM categories: Best Aggregator BDM; Best Major Bank BDM; Best Non-Bank BDM; and Best Non-Major Bank BDM.

This award recognises the most outstanding brokerage operation in Australia regardless of size, and is one of the highest accolades offered to a brokerage in the mortgage industry.

The finalists in this category comprise the winners of the brokerage categories: Brokerage of the Year (1–5 staff); Brokerage of the Year (6–20 staff); Brokerage of the Year (Over 20 staff); Brokerage of the Year – Diversification, and New Brokerage of the Year.

AWARD SPONSOR

COMMONWEALTH BANK AUSTRALIAN YOUNG GUN OF THE YEAR This award recognises the most outstanding broker in Australia with less than two years’ experience, and is one of the highest accolades offered to an individual in the early stages of their career as a broker.

The finalists in this category comprise the winners of the individual Young Gun categories: Young Gun of the Year – Franchise, and Young Gun of the Year – Independent.

AWARD SPONSOR

WESTPAC AUSTRALIAN BROKER OF THE YEAR This award recognises the most outstanding mortgage broker in Australia, and is one of the highest accolades offered to an individual in the mortgage industry.

The finalists in this category comprise the winners of the broker categories: Broker of the Year – Commercial; Broker of the Year – Independent; Broker of the Year – Insurance (Mortgage Protection and Life); Broker of the Year – Productivity; and Broker of the Year – Specialist Lending.

AWARD SPONSOR

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AUSTRALIAN MORTGAGE AWARDS FINALISTS 2O17 EVENT PARTNER

Westpac is Australia’s first bank and first company, with 199 years’ experience helping customers to achieve their financial goals through good times and bad. We’re into today and we don’t live in the past.

Our vision at Westpac is to be the No. 1 lender for overall broker service and value in Australia.

We’re One Team that is helping you grow more opportunities so that you can strengthen your proposition to your clients.

We are Westpac. One bank, One Team.

AWARD SPONSORS

ALI Group is the market leader in providing loan and mortgage protection products to the mortgage broking industry, with over 3,500 brokers authorised to offer their clients loan protection.

Our mission is to ensure all Australian home and property borrowers are protected.

Contact 1800 006 776 service@aligroup.com.au www.aligroup.com.au

Contact your Westpac BDM 1300 130 467 westpacbrokerbase.com.au At ANZ, we understand commitment. We see brokers as valued partners and firmly believe in helping you help your customers. With 20 years supporting the broker industry, we look forward to continuing to improve our overall service proposition to ensure we meet the changing needs of our brokers and customers – both in residential and commercial.

OFFICIAL PUBLICATIONS

The mortgage broking industry reads it first in Australian Broker, the market’s only truly dedicated news magazine and website.

Firmly established as the most reliable and independent news source for brokers, the ‘broker’s magazine of choice’ includes news, opinion, market analysis, leading broker profiles, sales and market insights, white papers, plus a unique focus on the industry personalities.

Contact Otiena Ellwand, editor 02 8437 4792 otiena.ellwand@keymedia.com.au www.brokernews.com.au

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Mortgage Professional Australia is the leading business magazine for the mortgage and finance industry. Launched in 2001, MPA continues to be the key resource mortgage and finance professionals turn to for in-depth industry issues, market trends, business analysis and intelligence.

Contact Sam Richardson, editor 02 8437 4720 sam.richardson@keymedia.com.au

Speak to your ANZ BDM today 1800 812 785 www.anz.com/small-business/broker/ mortgages/contact-us/

At Bankwest, we’re dedicated to you – finding ways to make your job that little bit simpler and easier so you can get back to building your reputation.

We’re working hard for you.

Contact: Stewart Saunders, General Manager Broker Sales 0475 980 011 stewart.saunders@bankwest.com.au www.bankwest.com.au

MORTGAGES

Established in early 2000, Bluestone has expanded from a mortgage origination and securitisation platform in Australia to become a multinational capital management and asset management business, with offices in Australasia and Europe. Since 2000, Bluestone has originated over $4.8bn worth of loans for more than 22,000 customers in Australia and New Zealand.

Commonwealth Bank has helped more Australians buy their own homes than any other bank. When it comes to finding the right home loan for your customer, it pays to partner with a bank that ticks all the boxes.

From expert relationship managers to market-leading technology, you can rest assured we’ve got you covered.

www.mpamagazine.com.au Contact Steph Kay, Senior Communications Manager

www.mpamagazine.com.au

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EVENT PARTNER

0416 255 934 steph.kay@live.com.au www.commbroker.com.au

The Finance Brokers Association of Australia Limited (FBAA) has been the national voice for brokers since 1992 – fighting hard for the rights of finance professionals, committed to the growth of the finance industry. The FBAA empowers its members by giving them the tools they need to grow their business.

Contact Leah Renwick, Business Development Manager 07 3041 0350/0401 929 176 leah@fbaa.com.au www.fbaa.com.au

Giant Finance Group Aggregation offers brokers and their businesses a complete service and support experience. Powered by Finsure and submitting over $50m in business per month, we offer leading software, leads, competitive commission models and a full range of diversified products for your clients.

We’re big enough to count, and small enough to care – get in touch with us today.

ING DIRECT is the trading name of ING Bank (Australia) Limited and is wholly owned by the ING Group. ING DIRECT in Australia has: • Over $12bn paid in savings interest • Financed 475,000+ home loans • Over $1bn invested through Living Super • 1.5 billion customers and counting!

Contact Yu-Wen Goh Yu-Wen.Goh@ingdirect.com.au

02 8339 5110 www.ingdirect.com.au

La Trobe Financial is one of Australia’s leading credit specialist lenders. Our commitment to innovation, product quality and superior service has been proven over 65 years.

We have a broad product range focused on meeting the needs of customers inadequately met by the traditional banking sector.

Contact Caterina Nesci, Marketing & Media Manager 0422 270 474 cnesci@latrobefinancial.com.au www.latrobefinancial.com.au

Contact 1300 622 276 1300 622 276 brokerservices@nab.com.au www.nabbroker.com.au

NextGen.Net Pty Ltd is Australia’s leading technology solution provider to the lending industry, focused on delivering quality products and services to a range of banks, non-bank lenders and brokers. Our objective is to provide smarter solutions for now and what’s next – delivering best-in-class Software as a Service (SaaS) and leading the market in quality management and processing efficiencies.

Contact: Tony Carn, Sales Director sales@nextgen.net 02 9929 5999 www.nextgen.net

Australians deserve to get the most out of their money. We’re here to help you get more from your savings and pay less on your loans.

Owned by industry super funds, our profits stay local, with the organisations that look after the retirement savings of everyday Australians.

Make the most of ME. Contact Lino Pelaccia, GM Broker 0434 322 010 lino.pelaccia@mebank.com.au mebank.com.au

At NAB we understand that every loan matters because it has the potential to create a home, build a business or achieve a dream.

Our broker channel is uniquely positioned to provide brokers with the tools and support they need to help their customers. Our comprehensive offering empowers brokers to build success on their own terms.

Pepper primarily focuses on providing home loans to customers who do not meet the acceptance criteria of banks and other lenders, in particular the self-employed, small business owners, and borrowers with irregular income, an unsubstantiated savings history or a prior record of minor credit impairment. Pepper offers a genuine financing alternative to prime quality borrowers who are typically denied access to residential mortgage finance due to restrictive lending criteria.

Contact Sarah Pikardt, Channel Marketing Manager 1800 737 737 spikardt@pepper.com.au www.pepperonline.com.au

www.mpamagazine.com.au

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PEOPLE

BROKERAGE INSIGHT

RISE HIGH FINANCIAL SOLUTIONS Marissa Schulze, director of a multi-award-winning, ever-growing Adelaide brokerage, tells MPA that when your business revolves around love for your clients, the money soon follows MPA: How did you establish Rise High in 2011 and grow the business to the team of 18 you have now?

Marissa Schulze: I had a career in commercial banking before we started the business, and I was working for Westpac when I became pregnant with our daughter. Once I had her, [my husband James and I] decided that it would be nice for me to be able to have a bit more flexibility and to be at home with her for a bit longer, so we thought we’d try broking and see how it went.

James was still working in IT at that point and I was running the business on my own, and it just started to get busier and busier and then I needed to hire some administrative help. I fell pregnant again with my son quite soon after we started the business, and we decided it was time for James to quit his job and come into the business full-time as well. By that time we

already had administrative support. When he started in the business he didn’t have any loanwriting experience – he had been working in IT for 10 years. He learnt how to be a broker, and he’s a great broker now.

Of our first couple of brokers, one was a girl I went to high school with and we had worked at Westpac together. She was in a similar position to me in that she had her first child and decided that she wanted a bit more flexibility.

Another of the brokers I met at a mother’s group and she was looking for a career change at the time. Our most recent brokers have come from our clients – people that are really interested in property investing and just have the right personality and a real interest in what we do. It’s all come together naturally.

MPA: You are passionate about property and bought your first investment property

DIVERSIFYING TO MEET CLIENTS’ NEEDS

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Home loans

Self-managed super fund loans

Refinance/debt consolidation

Personal and car loans

Investment loans

Commercial loans

Subdivision and development loans

Self-employed loans

Construction/home improvement loans

Accounting and tax services

at 18 years old. How have your experiences helped you in your business?

MS: I think every experience I’ve had up until now has helped us in our business. I think it’s just pulling together every experience in life and having an interest and passion in property outside of the business that has helped me, because people can see I’m genuinely excited about property when they speak to us. I think you have to be interested and excited about property if you’re going to be a mortgage broker, because while it’s finance, obviously it all comes down to property, generally speaking.

Obviously the banking background helped, although when we started the business I’d never written a residential loan before, and resi is now what we mainly focus on, so that was a bit of a change for me. But it was pretty easy for me to figure it all out and learn the ropes, given that I had that banking background and it was good to know how the banks work internally. So I think every experience that I’ve had in the past has given me skills and experience that have helped us with the business.

MPA: Rise High recently won the 2017 MFAA Excellence Award – AMP Bank Finance Broker Business Award 6+ Loan Writers. What’s your winning formula?

MS: I think we are good all-rounders. Obviously we’re writing significant volumes, but it’s more

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GOING THE EXTRA MILE Rise High runs free property investment seminars (six each year) and education around finance for its clients, which is a win-win for the business and clients alike. These value-adding services: show the broker going beyond the transaction, thus strengthening long-term relationships with clients typically cover different topics based on client interest include speakers such as Rise High brokers or outside experts have proven to be an effective way to stay in touch with clients post-settlement offer clients the opportunity to bring along family and friends they would like to refer

“I think it just comes down to the fact that we care about the community, we care about our clients – none of us are doing this for the money” than that – it’s the fact that we are consistently growing and we have been growing since day one of our business, and it’s been a nice growth story of the last five and a half years. But it’s also all of the extra things that we do. We do a lot in the community; we run a lot of free financial literacy programs for children; we’re very engaged in our local community; we’ve got some really innovative ways that we market, and we connect with our audience via social media. We have exceptional customer service results with our client base … our business and our client

base has grown purely from client referrals.

I think it just comes down to the fact that we care about the community, we care about our clients – none of us are doing this for the money, we’re doing it for the love, and when you do it for the love, the money just comes.

MPA: You won the AMA Young Gun award in 2013, reflecting your strong start as a broker. What advice do you have for new brokers?

MS: You need to be prepared for hard work

and to set yourself some daily rituals that will get you doing the right activities from day one. At the end of the day, building and growing a client base basically comes down to the fact that the more people you meet and speak to, the more opportunities you’re going to have … you need to set yourself targets of how many people you are going to add to your database that week; how many meetings you are going to have in your diary that week.

It’s just starting with the small things and recognising that it is a long game and that you need to treat it as more of a marathon, not a sprint. But you do need to work really hard at making sure that you’re getting the right habits from day one, because it’s those habits that will serve you well in terms of building some consistency and helping you to grow your client base quickly.

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PEOPLE

CAREER PATH

HOLDING THE PURSE STRINGS AFG’s new CEO, David Bailey, has been managing the aggregator’s finances for over a decade, guiding AFG through a period of transformation in broking Fresh out of Edith Cowan University, Bailey entered accountancy. Over the next decade he worked ENTERS ACCOUNTANCY in both Perth and Sydney, where he was involved in acquisitions, due diligence and IPOs. “I hadn’t heard of AFG when I moved into commerce in 2000, but I used to do some audits of entities that Brett McKeon was director of.”

1988

2007

SURVIVING THE GFC Like many in the industry, Bailey remembers the savage commission cuts that accompanied the GFC. “Overnight maybe 35% of commissions were reduced. However, the business remained sound and AFG didn’t have any debt. Our decision at the time was if we are going to cut, let’s cut hard; we can always re-employ. We needed to be hard to ensure the survival of the company.”

2004

EARLY DAYS AT AFG When AFG advertised for the role for chief financial officer, Bailey decided to go for it. Western Australians were early adopters of the broking model and Bailey could see the opportunities it presented.

“It was a growing firm and growing at a fast rate … it was at a time when broking was starting to grow in use across the country by consumers because of the value it was providing.”

2015

AFG’S IPO Bailey sees AFG’s initial public offering on the ASX as one of his career highlights, a watershed moment in the history of a growing company.

• • • • • • • • • • • • •

2015

IT’S JUST NOT CRICKET Bailey joined the board of the Western Australian Cricket Association in 2015 after almost 20 years of membership. “I thought we’d spend a lot of time talking about cricket,” he explains. In fact his focus is more on the new Perth Stadium, talent development and women’s cricket. On his time as a player, Bailey says: “It’s better to say my legacy to cricket will be more on the admin side than on the cricket side.”

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2017

BECOMES CEO With an ever-increasing number of brokers entering the market, digital competition and regulatory interference, Bailey faces a number of challenges in his new role as CEO. However, the main challenge remains the same:

“to continue to provide choice to the consumer and to be a relevant avenue of distribution for lenders”

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e r u t e u r f u t r u u f o r Y u o Y iiss iin n nds a s h d n d a o h o ggood • • • • • • • • • • • • •

AWARD WINNING NATIONAL AGGREGATOR AWARD WINNING NATIONAL AGGREGATOR AWARD WINNING OWNED NATIONAL AGGREGATOR INDEPENDENTLY INDEPENDENTLY OWNED INDEPENDENTLY DEDICATED STATEOWNED MANAGERS DEDICATED STATE MANAGERS DEDICATED STATE MANAGERS INNOVATIVE MARKETING TOOLS INNOVATIVE MARKETING TOOLS INNOVATIVE MARKETING TOOLS TAILORED SOFTWARE OPTIONS TAILORED SOFTWARE OPTIONS TAILORED SOFTWARE OPTIONSPROGRAM MARKET LEADING MENTORING MARKET LEADING MENTORING PROGRAM MARKET LEADING MENTORING PROGRAM

1300 781 481 1300 781 1300 781 481 481

INFO@OUTSOURCEFINANCIAL.COM.AU INFO@OUTSOURCEFINANCIAL.COM.AU INFO@OUTSOURCEFINANCIAL.COM.AU WWW.OUTSOURCEFINANCIAL.COM.AU WWW.OUTSOURCEFINANCIAL.COM.AU WWW.OUTSOURCEFINANCIAL.COM.AU OUTSOURCE FINANCIAL OUTSOURCE FINANCIAL OUTSOURCE FINANCIAL

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ACN 131090 705 ACN 131090 705 ACN 131090 705

AUSTRALIAN CREDIT LICENCE 384 324 AUSTRALIAN CREDIT LICENCE 384 324 AUSTRALIAN CREDIT LICENCE 384 324 29/08/2017 1:50:29 PM

PEOPLE

OTHER LIFE

TELL US WHAT YOU GET UP TO Email sam.richardson@keymedia.com.au

43 games

6,500

$7m p.a.

Average length of a National Rugby League player’s career

Number of contestants Emilio Martinez beat to win Nike’s ‘Most Wanted’ competition

Current NRL individual salary cap for the top 25 highest paid players at a club

SHOW ME THE MONEY Shaun Pyne (centre) with England rugby league squad member Chris McQueen, who he manages

Shaun Pyne (left) holding the NRL Grand Final trophy with Chris McQueen after the Rabbitohs won it in 2014

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Shaun Pyne, director of Georgeco Finance Group, has used his skills in broking to become a successful sports agent AMID THE bankers and strategists, AFG brokers at this year’s national conference were presented with a different type of speaker: an 18-year-old soccer player from Western Sydney. Emilio Martinez, of Western Sydney Wanderers, was there thanks to Shaun Pyne and his business, Rise Sports Management.

Martinez’ story is an example of why Pyne became an agent. “He’s phenomenal and his story is amazing: a kid from Western Sydney, with a severely autistic brother, whose escape

was to go out and kick a ball around.” Martinez won Nike’s ‘Most Wanted’ youth competition in London and is now a professional soccer player and an Autism Spectrum Australia ambassador.

Pyne’s skills as a broker help him manage players’ finances; contract negotiations are just 10% of the job. His next project is J’maine Hopgood, named in Queensland’s under-18s rugby side. “I had his mum on the phone to me, in absolute tears of joy. For me, that’s why I do this job.”

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