Mortgage Professional Australia issue 17.12

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MPAMAGAZINE.COM.AU ISSUE 17.12

STRIKING GOLD 2017’s Top 100 Brokers revealed Andrew Russell Leading REA’s rethinking of broking

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AMA winners Highlights of the 16th Australian Mortgage Awards

Loan standards Aren’t applications difficult enough?

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DECEMBER 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

Looking at the hard facts behind mortgage arrears

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16

SPECIAL REPORT

FEATURES

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AUSTRALIAN MORTGAGE AWARDS 2017

Who walked away with a trophy from the ‘Oscars of the Mortgage Industry’, plus highlights and pictures

MPA TOP 100 BROKERS

ANDREW RUSSELL

12 REA Group exec on the move into broking and creating the end-to-end property experience

Three brokers on the new wave of first home buyers

10 Opinion

CANSTAR’s Steve Mickenbecker on what spring means for interest rates, investors, and interest-only lending

MORTGAGE INSIDERS 52 Key Invest Lending Services Chris Burns talks MPA through the 80-strong brokerage dominating broking in Adelaide

54 John Kolenda

The industry’s biggest report charts Australia’s top residential brokers, with analysis, tips and interviews

THE BIG INTERVIEW

06 Head to head

Finsure’s managing director’s long history of entrepreneurship

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56 Steve Kadry

NSW broker leading the charge for rugby league in Italy and Australia

FEATURES

COMMERCIAL LENDING

MPA and La Trobe Financial on why you should move into small-scale commercial lending

MPAMAGAZINE.COM.AU

08 UPFRONT

NEWS ANALYSIS

Why banks are scrambling to make loan applications tougher

NOW ONLINE: Our new daily newsletter 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.

It’s free to subscribe; simply go to our website.

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UPFRONT

EDITOR’S LETTER www.mpamagazine.com.au

SPREAD THE NEWS

R

emember that time when APRA, CBA and the Reserve Bank praised mortgage brokers?

I imagine you don’t – yet they really did. All three wrote positively about brokers in their submissions to the government’s ongoing Productivity Commission inquiry into competition in the financial sector. The RBA in particular gave brokers a ringing endorsement: “Borrowers’ capacity to source the best deal and assess the benefits of switching providers has been assisted by the introduction of brokers and comparison websites.”

APRA for its part noted that brokers, “in addition to competitively priced products, appear to have assisted smaller providers in gaining market share in the supply of residential mortgages”. CBA declared that brokers “should and will continue to play an important role in the mortgage market”.

These are not secret documents obtained by MPA; these submissions are publicly viewable and you can send them to your clients today.* Yet in the media coverage the Productivity Commission received, there’s precious little to read about brokers: a positive mention in the Sydney Morning Herald and negative mentions in The Australian and the Australian Financial Review. Compare that with the UBS ‘liar loans’ report, which made the headlines within hours of its release.

These are not secret documents obtained by MPA; these submissions are publicly viewable Before laying into the ‘mainstream media’, consider two points. Firstly, newspapers do not exist to make brokers feel good about themselves, or to promote brokers’ businesses. Secondly, they have bigger fish to fry: Amazon’s entry to Australia and even changes to superannuation are more interesting than broker remuneration. To be heard, brokers need to shout hard and shout clearly.

Behind-the-scenes negotiation with regulators has its place, but brokers need to be unashamed in telling their communities and the press the good news about this industry.

Sam Richardson, editor, MPA *Use this link: www.pc.gov.au/inquiries/current/financial-system/submissions PS We’d like to apologise for mistakenly stating that Ben Wardley, who was in our Top 10 Commercial Brokers report, was with AFG, when in fact he is with FAST.

DECEMBER 2O17 EDITORIAL Editor Sam Richardson Journalist Maya Breen Production Editor Roslyn Meredith

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

Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss.

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UPFRONT

STATISTICS

MORTGAGE ARREARS

2.5%

2.0%

Figures from two recent reports show that, while arrears have gone up in July, non-bank arrears are lower than those of their larger competitors

1.5% MORTGAGE ARREARS have been the topic of two recent reports by ratings agencies Moody’s Investors Service and S&P Global Ratings, which have uncovered a number of contrasts between the banks and non-banks.

“Arrears for loans underlying prime and nonconforming RMBS portfolios are holding steady. With continued jobs growth and unemployment rates remaining relatively

$384bn

1.9x

Total value of new residential mortgages Ratio of household debt to approved to year-end June 2017 disposable income, Q1 2017

stable, we expect this trend to continue,” stated the S&P Global Ratings RMBS Arrears Statistics report.

“High household debt and stagnant wage growth increase more borrowers’ sensitivity to a change in economic conditions, but we do not expect the loans underlying Australian RMBS transactions to deteriorate in the short to medium term while stable employment conditions persist.”

0.02%

Increase in home loans in arrears from June to July

1.9%

Non-banks arrears fell 1.0%

0.88%

0.85%

June

July

0.5%

0%

Record-low annual wage growth in May 2017

Source: Moody’s Investors Service, Sept 2017; S&P Global Ratings RMBS Arrears Statistics, Sept 2017

NON-CONFORMING TURNING AROUND When compared to prime, non-conforming arrears are higher; however, S&P also noted they have improved over the past decade.

STATE BY STATE Home loan arrears rose in July across all states except Queensland and South Australia.

from 1.62%

1.60%

NT Non-conforming arrears fell 4 basis points from June to July Non-conforming loans over 90 days past due rose 6 basis points from June to July BUT Loans 90 days in arrears contribute less to total non-conforming arrears (47%) than they do to prime RMBS arrears (58%)

from 1.51%

QLD

1.46%

WA

SA NSW VIC

Arrears increased

Arrears fell TAS

Source: S&P Global Ratings RMBS Arrears Statistics, Sept 2017

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Source: S&P Global Ratings RMBS Arrears Statistics, Sept 2017

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Non-major banks arrears rose

NON-BANKS HAVE THE EDGE S&P’s figures revealed non-bank arrears were lower than those of the regional and major banks. Non-banks also stood out as the only lenders to lower their arrears over June–July.

2.30%

2.35%

Major banks arrears rose

1.08%

1.11%

June

July

June

July Source: S&P Global Ratings RMBS Arrears Statistics. Sept 2017

POSITIVE SIGNS S&P’s report noted the overall improvement in non-bank arrears (down to 0.85% in July 2017 from a peak of 2.99% in 2009). The positive change was also evident in the drop in both loans with higher LVRs and low-doc loans.

Among the non-banks: 50% 40% 30% 20%

low-doc loans fell across prime portfolios

28%

22% 15%

10% 0%

50%

higher-LVR loans dropped

2009

June 2017

2009

July 2017 Source: S&P Global Ratings RMBS Arrears Statistics, Sept 2017

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UPFRONT

HEAD TO HEAD

Are you seeing an increase in FHBs? Brokers across Australia explain how the first home buyer market is tracking in their towns

Simon Kahl

Mark Williams

Jonathan Lee

General manager The Loan Company, Perth

Home loans specialist Right Angle Home Loans, Brisbane

Owner/manager Mortgage Choice Melbourne Inner West

While the Perth market has been on the decline for the last two to three years, recent figures indicate that the WA economy is starting to head in the right direction. The unemployment rate has been decreasing and there are currently over $100bn worth of mining projects under construction or in the committed stage of development. I believe Perth prices have hit the bottom of the market and that we’ll see a significant increase in FHB activity in 2018 as a result of these lower prices. Furthermore, with the 10k First Home Owner Grant remaining available in WA to FHBs (for construction and newly built homes only), I have definitely seen a consistent level of enquiries for new home sales and would expect this to trend upwards as buyers return to the market.

We are seeing a very small increase in the FHB market. This segment slowed rapidly when the government pulled back the First Home Owner Grant from second-hand homes to newly established homes only.

However, we are now starting to see a trend with our development clients, who are targeting FHBs and building a product that is sub-$500k, brand new, in the outer suburbs of Brisbane, in what are now known as satellite suburbs. If they purchase after 1 July 2016, FHBs are eligible for a $20k grant and nil transfer duties if the purchase price is kept under $500k. The lenders are fighting hard for this type of loan and are offering very competitive interest rates for owneroccupied security with P&I repayments.

The Australian dream is still alive for FHBs!

Absolutely. Over the last couple of months, I have seen a spike in first home buyer enquiries and referrals.

While I guess it depends on the markets you operate within, as a Melbournebased broker I am seeing more and more first home buyers entering the market in a bid to make use of the FHB incentives currently on offer.

Earlier this year, the government abolished stamp duty for FHBs purchasing property up to the value of $600,000. In addition, it extended the First Home Owner Grant. Both of these incentives have helped drive overall demand from this type of buyer. And, with interest rates continuing to hover around record lows, now really is a great time to be an FHB.

RESURGENCE OF FIRST HOME BUYERS Lender ME reported a rise of 17% in FHB applications over July and August 2017 compared to the same time last year. It noted the largest increases were in Western Australia, Queensland and Victoria. The bank’s figures also showed FHBs borrowed on average $369,000, up $26,000 (8%) in July and August 2017 compared to the same period last year.

Central Economic Development Agency (CEDA) research has found that mortgage holders in the younger age brackets are increasingly highly geared as real housing prices have overtaken real incomes. It reported the mortgage debt-to-income ratio of those aged 25–34 years as “spiralling” by 141 percentage points versus 115 points for those aged 35–44.

Source: CEDA Report: Housing Australia August 2017; ME media release September 2017

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UPFRONT

NEWS ANALYSIS

RAISING THE BAR Amid regulatory and market concern, banks are scrambling to make mortgage applications tougher, leaving brokers to pick up the pieces, writes MPA editor Sam Richardson ALTHOUGH ASIC and APRA didn’t exist, applying for a mortgage in 1960s Australia was a highly regulated business. The government controlled not only lending conditions but even your interest rate, and you’d have to head to a branch to apply for a loan. Now you can apply without ever setting foot in a bank or even leaving your computer.

It’s become easier to get a mortgage; for some, too easy. Over four days in late September two major banks added extra checks to an already-extensive application process. ANZ introduced a Customer Interview Guide requiring brokers to ask questions about everything from a customer’s Netflix subscription to whether they were planning to start a family. Three days later CBA introduced a simulator that would

to avoid public embarrassment. Brokers have been caught in the middle.

Not tough enough Two weeks before the majors took action, Swiss investment bank UBS published an alarming and controversial report. Surveying 907 recent borrowers on their experience of getting a mortgage, it argued that the “ease of attaining approval had improved over every prior vintage back to the 1990s”.

Therefore, UBS concluded, “we believe there is little evidence to suggest customers are finding it more difficult to attain credit or that mortgage underwriting standards are being tightened from a customer’s perspective”.

That was a problem, UBS argued, because the banks had already written $500m of ‘liar

“New legislation requires brokers and lenders to forensically examine a borrower’s assets and liability situation” John Flavell, Mortgage Choice show interest-only borrowers how their repayments would change and affect their lifestyle. Customers would be required to fill in an ‘acknowledgement form’ to proceed with an interest-only application.

ANZ and CBA are trapped between a rock and a hard place. On one side is the mantra of customer convenience and choice, but on the other the lenders and regulators are desperate

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loans’ based on inaccurate information, with ANZ the worst affected.

UBS’s conclusions have been met with intense criticism. ASIC senior executive Michael Saadat told the Senate that, because of the sophistication of the verification process, “we think consumers are probably not the best judge of what banks are doing behind the scenes to make sure borrowers can

afford the loans they’re being provided with”.

Yet while it defends lending standards with one hand, ASIC has been strengthening them with the other. The regulator is currently embroiled in a long-running court case against Westpac over the bank’s estimation of customer expenditure, in addition to dictating tougher rules for interest-only lending in April and preparing a ‘shadow shop’ of brokers later this year. Additionally, the Consumer Action Law Centre told MPA that verification was “critically important” and that it supported high standards. For Consumer Action, ASIC and UBS, application standards are still very much a work in progress.

The cost of compliance Brokers have a very different opinion. Mortgage Choice CEO John Flavell has publicly stated that “lenders are more scrupulous than ever”, explaining that “new legislation requires brokers and lenders to forensically examine a borrower’s assets and liability situation”.

While no friends of the broker channel, UBS noted that brokers “arguably do much of the application heavy lifting” and brokers can attest to the impact of tightening lending

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HOW APPLICATION STANDARDS IMPACT TURNAROUND TIMES In our 2017 Brokers on Banks survey, we asked brokers: ‘Have turnaround times improved or worsened over the past year?’ Here’s what they told us:

Improved

No difference

37%

23%

Worsened 40%

Source: MPA Brokers on Banks report 2017

standards. Turnaround times have actually got worse over the past year, according to 40% of respondents to MPA’s Brokers on Banks survey. Compliance and bank mismanagement have negated the gains of huge investments in technology, the experience of one broker suggests: “I have been doing this for 20 years. Twenty years ago we were getting unconditional approval in five days. We are still struggling for that 20 years later.”

captured on the form but never used in the underwriting process,” he says.

Progress has been driven not by extra questions for borrowers, North explains, but by an increase in documentation required from applicants. North believes there is room for improvement, however, particularly when it comes to understanding borrower expenditure. Only half of households have formal budgeting, he explains, and “whether

“If I go back four or five years, I was amazed at just how loose many of the processes were” Martin North, Digital Finance Analytics Easier, not shorter Martin North, principal of consultancy Digital Finance Analytics, has studied mortgage applications for years and has observed an improvement in standards.

“If I go back four or five years, I was amazed at just how loose many of the processes were and in fact what would happen is the information would be

it’s a real lie that households have not been truthful with the lenders, or whether they’ve got the best estimate and it might not be accurate, is probably the moot point”.

Applications can be made easier, North argues, but “easier doesn’t necessarily mean shorter”. Improvements in technology could improve underwriting standards for banks while pre-populating interactive application

forms for consumers and offering time-saving solutions to brokers.

This is already occurring. Realestate.com. au’s new home loans offering integrates an online calculator into its website, which indicates how a borrower’s lifestyle would be impacted by mortgage repayments on a particular property. When borrowers apply for conditional approval the calculator’s details are fed into the form, allowing a quick online form to lead to instant approval.

For brokers, Advantedge has introduced two mobile apps to make collection of identification documents faster. Looking further ahead, banks have committed to sharing data within two years, which according to Australian Bankers’ Association chief executive Anna Bligh means that “at the click of a button, Australians will be able to directly share their transaction data with other banks or financial services”.

Should technology meet these lofty expectations, today’s paper-heavy application process could eventually be viewed in the same way that we view the branch of the 1960s today.

Yet until this technology kicks in, brokers should prepare themselves for more heavy lifting.

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UPFRONT

OPINION

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

PLAYING HAVOC WITH RATES CANSTAR group executive Steve Mickenbecker on how regulation has pushed borrowers’ interest rates in very different directions SINCE APRA’S first tilt at slowing investment and interest-only lending in December 2014, we have seen a concerted approach from regulators. With runaway residential markets in Sydney and Melbourne, interest rates at record lows and generous credit policies, the regulators have agreed with commentators that enough is too much.

The banks are playing what’s in front of them So, what have lenders been doing and how are they competing? They’ve been gifted the perfect platform to launch out-of-cycle interest rate increases as responsible instruments of economic and social policy.

Of course they have complied.

In a nutshell, as the RBA has put rates on hold, investors have been hit with rate increases while owner-occupiers have been spared the pain unless they are paying interest only. Rate increases have been pushed through to the back book, not just new lending. The big banks have put through greater increases than the rest of the market and are competing with sharp fixed rates.

Lenders have reacted logically. If you have to ration certain forms of credit, you might as well use the pricing lever. In passing increases to the back book, you pocket some margin to invest in more ‘desirable’ segments and some to cover increased capital requirements, taxes, the costs of other regulatory initiatives, etc. They have also pulled the lever of tighter credit policy.

Looking at the specifics Since October 2016, which accounted for the

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last RBA cash rate increase, this is what we have seen happening to average standard variable rates (based on the 4,000-plus loans in Canstar’s database): Residential – Principal and interest loans have gone up by 2 basis points from 4.40% to 4.42%. Interest-only loans have gone up by 15 basis points from 4.48% to 4.63%.

Investment – Principal and interest rates have gone up by 24 basis points from 4.64% to 4.88%. Interest-only rates have gone up by 40 basis points from 4.67% to 5.07%.

An interest-only investor is now paying 65 basis points more than a residential principal

When comparing the lowest variable price offerings across the board, the big banks are charging interest-only investors a whopping 117 basis points more than their principal and interest residential borrowers.

The average rate for the major banks’ interest-only investment loans is 5.33% compared to 4.93% for other ADIs and 4.43% for non-ADIs. Non-ADIs have cemented themselves in the breakaway group, with a residential principal and interest average rate of 3.80%.

There is only a small added 28-basis-point margin for interest-only residential, and 63 basis points for interest-only investment.

The second tier and other ADIs fall in between, at 4.18% for principal and interest residential and margins of 22 basis points for interest-only residential, and 75 basis points for interest-only investment.

Fixed rates The big banks in particular have chosen to compete heavily in the fixed rate market.

Their average two-year rate for principal and interest investment is 4.18%, compared to a variable rate of 4.60%. Here their differential to the rest of the market is not as marked.

Non-ADIs are 4.30% and the other ADIs are

If you have to ration certain forms of credit, you might as well use the pricing lever and interest loan borrower. Three years ago there was no differential, and a year ago it was only 27 basis points.

Different players, different reactions The story doesn’t end there. There has been a divergence between institutions. The big banks have led the charge in increasing rates for investors and interest-only borrowers. From a point in December 2014 when some of the banks were not even able to identify investment borrowing, their systems are now better equipped to differentiate pricing. Some of the smaller players are still not differentiating interest-only from principal and interest loans.

Then there are the non-ADIs, not currently regulated by APRA but likely to be pulled back into the peloton.

4.38%. For principal and interest residential, the big guys’ two-year rate is 3.91%, compared to non-ADIs at 4% and other ADIs at 3.99%.

Whether the property market crashes or glides to a smooth landing, and irrespective of when the RBA next moves rates up, APRA has changed the market. It has dulled sensitivity over out-of-cycle rate increases and led to differential pricing for investment and interest-only lending, resulting in changed relativity among lenders. All of this of course flows through to your customer.

Steve Mickenbecker is group executive of ratings and financial services at CANSTAR and the organisation’s chief spokesperson. He previously worked in small business lending at Suncorp, following a 20-year stint at NAB.

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PEOPLE

BIG INTERVIEW

ANDREW RUSSELL: THE END-TO-END BUYING EXPERIENCE Realestate.com.au is one of Australia’s most well-known brands, and it is entering broking. Executive director Andrew Russell tells MPA editor Sam Richardson that its success will be based not just on scale but on technology BROKING HAS had plenty of new entrants, but few disruptors. Powerful real estate groups have established broking arms, but these differ little from what’s already in the market, while much-hyped fintechs still cater to a tiny proportion of customers. To really disrupt broking – to alter the structure of the industry – requires not only a new idea but huge investment and scale. In late December 2016, with most of Australia on holiday, those three factors finally came together.

The partnership between realestate.com.au and NAB was the result of years of planning, according to executive director of financial services Andrew Russell. “We wanted to partner with one of the leading banks in the world, a big four bank, from a skills base and credibility perspective,” he says.

Russell himself had been brought over from Mortgage Choice after a conversation with Tracey Fellows, CEO of REA Group, which owns realestate.com.au. “I saw a tremendous opportunity when speaking to Tracey Fellows: the opportunity to build a world first in the area of property search and finance,” Russell recalls.

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The integrated mortgage Realestate.com.au’s entry into broking hit the news in June of this year, when the REA Group acquired an 80.3% stake in Smartline.

A week later rival website Domain announced that it would also be entering broking in partnership with online mortgage broker Lendi. Realestate.com.au Home Loans was launched quietly in September, just before MPA spoke to Russell.

Three major components separate realestate.com.au Home Loans from anything that has gone before, Russell

website, borrowers can search only for properties they can afford.

Every property page on realestate.com.au has the calculator built into it, alongside what Russell terms a “liveability metric”.

Utilising the information in the calculator, this interactive tool shows borrowers how meeting repayments on a property could affect their lifestyle – an innovative solution to regulators’ demands for more responsible lending provisions.

Finally – and perhaps crucially – realestate.com.au users can apply for

“We think that we have a tremendous opportunity to change the way that home loans are sold and bought in this country” explains. The first is an online calculator built into the website’s property search function.

“We have built what I’m terming the best calculator in the world,” Russell says.

With the information stored on the

conditional approval of a home loan before selecting a property. “It’s not a Mickey Mouse approval that you might see from others in the market,” Russell says. “This is a big four bank-backed approval powered by NAB.”

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PROFILE Name: Andrew Russell Title: Executive director of financial services Company: REA Group Years in the industry: 13 Career highlight: “Right now the highlight is having the opportunity to lead this business, realestate.com.au, into financial services; being part of a highly engaged and extremely talented team to deliver a worldfirst property find and finance.”

Career lowlight: “I used to work at a chicken shop. I worked 22 hours on Christmas Eve putting chickens on spits, and I can tell you that day was a pretty tough day.”

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PEOPLE

BIG INTERVIEW

THE NUMBERS BEHIND REALESTATE.COM.AU

6.28 million Number of Australians visiting the site each month

1 in 3 One in three young couples and singles visit the site each month

1 in 5 One in five empty nesters visit the site each month

73% Visitors to the site are 73% more likely to be looking for a home loan than the average consumer

$67m Amount paid by REA Group for an 80.3% stake in Smartline

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With the information on the calculator, plus an online form that takes 15–30 minutes to complete, borrowers can get instant conditional approval for similar properties in a similar area. Furthermore, Russell explains, “your search experience will then be updated for all the different properties that you are approved for”.

At the time of writing, borrowers requiring lenders mortgage insurance or refinancing had to use a call centre. However, Russell insists such borrowers will be catered for.

“We’re just trying to ensure we have the right processes at the contact centre, but over time, as we get running, all of that will be embedded into the experience if the consumer puts the right information in.”

majors, a range of non-majors and two non-banks. These lenders are presented on formal approval, when the client talks to a broker, either in person or on the phone. At that point the consumer can say, “I want to look at a whole panel of lenders because of my various circumstances”.

Russell insists that customers will get the most suitable loan for their needs. “I would like to make this point clear,” he says. “We’re product-agnostic when we’re making the approval selection point. It’s based on your income and expense information.”

Yet the ‘opt-out’ involvement of NAB appears to sit uneasily with the concept of consumer choice.

One million leads NAB’s involvement Russell is acutely aware of the convenience of realestate.com.au’s process and the ability of a borrower to both find and finance their dream property at any time of day. Yet providing this convenience carries a cost, both for realestate.com.au and potentially the consumer.

NAB’s influence in its partnership with realestate.com.au appears to be extensive.

Conditional approvals are for NAB and

Although realestate.com.au’s broking operation is in its infancy, the numbers are already impressive. “More than one million Australians a day engage with their property search here,” Russell explains. “That’s a massive audience, and we believe that with the size of that audience we will be representative of the market; all home buyers in Australia will be interested in our experience.”

Those customers will be assisted by more than 100 brokers, drawn not only from Choice

“I would like to make this point clear: we’re product-agnostic when we’re making the approval selection [decision]. It’s based on your income and expense information” realestate.com.au-branded home loans, which are provided by NAB-owned lender Advantedge. Furthermore, realestate.com.au Home Loans is a subaggregator of NABowned Choice Home Loans.

Realestate.com.au has a lender panel, which, although limited, includes all four

Home Loans but from across the industry.

Beyond the number of leads, “our mortgage brokers will be carrying the realestate.com.au Home Loans brand, both on their business cards and their shopfront, representing our business, one of the strongest and most well-known brands in the country.”

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One group of brokers that won’t be involved are Smartline brokers. Despite being mainly owned by REA Group, the franchise will continue to be run independently “in the medium term”, according to Russell.

With an established brand, disruptive technology and bank backing, Russell has every reason to be ambitious.

“We think that we have a tremendous opportunity to change the way that home loans are sold and bought in this country.

You’ll see all of our business going from strength to strength in the coming months, and we’re very excited about the opportunity to be not only the place for homes in Australia

“Our mortgage brokers will be carrying the ... brand, both on their business cards and their shopfront, representing our business, one of the strongest and most well-known brands in the country” but the number one place for home loans.”

Should Russell get his way and Australians get used to an end-to-end property process, it’s hard to see where the broker channel will fit in.

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SPECIAL REPORT

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TOP 100 BROKERS

In a market in regulatory turmoil, these brokers have defied the odds and are driving the industry forward

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SPONSORED BY

THERE ARE plenty of ways to measure a broker’s performance. For some, a great client testimonial is enough; others want a cabinet full of trophies. MPA’s Top 100 Brokers list highlights individuals who are extending the boundaries of what a broker can do, reaching new heights of efficiency and customer service and, consequently, writing more loans.

We take a straightforward approach: it is a broker's total value of residential settlements over the 2016/17 financial year that decides the rankings you’ll see over the next few pages.

This can be tough, for example on regional brokers dealing in lower loan sizes, but it provides a transparent way to compare very different brokers and different businesses.

The Top 100 is not simply a list of brokers; it can tell you a lot about the entire industry. Overall, this year’s Top 100 wrote fewer loans, with a lower total value than last year’s cohort.

This is the second year that numbers have declined, and it is increasingly looking like the near-$11bn written in 2015 will be remembered as a peak that future brokers will struggle to reach.

The impact of regulation and lender policy changes cannot be ignored. We spoke to a selection of Top 100 brokers, including the entire Top 10, many of whom told us that their clients’ borrowing capacity had been cut and the average loan was taking more time and effort. It’s noticeable that the brokers who performed best this year had highly efficient processing operations or had diversified beyond the most affected client groups.

We’ve made one small change to this year’s Top 100: rather than using ‘average’ figures, we’re moving to ‘median’ figures.

The intention is the same – to showcase the typical Top 100 broker – but median figures provide a more realistic view and aren’t affected by extreme results at different ends of the scale. We are still using the word ‘average’ in its commonplace meaning, however.

We’d like to thank all the brokers who applied for this year’s Top 100 Brokers, whether or not they appear in this list. We’d also like to thank the aggregators who verified them and our sponsor, Suncorp, for making this report possible.

$84,116,993

$359,727,552

Total value of residential loans written by the median Top 100 broker

Total value of residential loans written by 2017’s No. 1 Broker

MESSAGE FROM OUR SPONSOR Suncorp is incredibly proud to sponsor and support the 2017 MPA Top 100 Brokers list, a tremendous initiative recognising the best and brightest in the industry. Our business is built on strong partnerships with brokers, customers and the community, and we place great value on supporting the talent in the industry.

I would like to recognise the brokers who’ve made it on to this year’s Top 100 list, as well as the brokers and aggregators who applied. These committed individuals thrive on delighting their customers with the highest service standards.

Congratulations to this year’s No. 1 Broker, Justin Doobov, who achieved $359,727,552 in residential loans over the year – a new Top 100 record. Winning this award is a testament to his hard work, dedication and commitment to delivering outstanding service to his customers.

Encouragingly, we now have 16 female brokers in the Top 100, the highest number we’ve had so far. Top performers include Deslie Taylor of Mortgage Choice and Kelly Cameron of Get Real Finance.

All of this year’s Top 100 have demonstrated the best qualities of the industry: the commitment to servicing their customers, and dedication to the highest standards and excellence. It is an honour to be able to recognise their hard work and professionalism, and we are proud to support them as they continue to make a real difference to Australian homeowners.

Mark Vilo Head of Suncorp Bank Intermediaries, Suncorp Group

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2/11/2017 1:51:36 PM

SPECIAL REPORT

TOP 100 BROKERS

100-75

MPA TOP 100 BROKERS: 100-75

THE OTHER SIDE OF THE FENCE

Rank

Name

Company

State

Total value of residential loans FY2016/17

Total number of residential loans FY2016/17

100

Debbie Worthington

Mortgage Choice

NSW

$67,214,233

264

At just 27, Redom Syed is one of the youngest brokers ever to make the Top 100. Bizarrely, Syed saw the development of recent lending curbs first-hand: “I worked in the financial markets sector of the Treasury [in 2014], and they were working out ‘how do you stop a housing crisis with lending tools?’ ” At his brokerage, Confidence Finance, Syed uses his expertise to educate, and takes a “scientific approach” to lending.

99

Xavier Quenon

Go Mortgage Corporation

QLD

$67,658,700

164

98

Matthew Kerr

Hudson Financial Planning

QLD

$68,026,147

127

97

James Hasselle

Mortgage Choice

QLD

$68,377,270

231

96

Phillip Nguyen

IFG Home Loans

WA

$69,011,589

176

95

Matthew Wynd

Aussie Altona

VIC

$69,322,381

126

94

Quentin Grofski

Aussie Morley

WA

$69,439,878

198

93

Aden Williams

Alert Finance

NSW

$69,600,000

186

92

Eugene Sholomov

MINFIN Australia

VIC

$69,693,000

87

91

Alistair Baker

Aussie Moonee Ponds

VIC

$69,755,056

157

90

James Florance

Mortgage Choice

QLD

$70,146,192

245

89

Anthony Knight

Mortgage Choice

NSW

$70,339,140

208

88

Guy Tyler

Oxygen Home Loans

NSW

$70,697,615

99

87

Chris Crook

Aussie Shellharbour

NSW

$71,212,407

148

86

Tik Kamtan

Aussie Baulkham Hills

NSW

$71,767,696

147

85

Shareek Mohammed

Aussie Liverpool

NSW

$72,162,728

144

84

Richard Hoenig

Arleon Capital

NSW

$72,187,500

127

83

Matt Mannaert

Acceptance Finance

VIC

$72,553,939

160

82

Andrew Vaughan

Mortgage Choice

NSW

$72,673,481

271

81

Redom Syed

Confidence Finance

NSW

$72,860,980

279

80

Stephen McClatchie

Loans Australia

VIC

$73,034,389

138

79

Matt Cunliffe

Mortgage Choice

QLD

$73,446,644

211

78

Anthony Walsh

Aussie Carina

QLD

$73,724,889

175

77

Marvin Coleman

Mortgage Choice

VIC

$74,077,359

191

76

Matt Ireland

Mortgage Choice

QLD

$74,609,753

285

75

Neil Massingham

Shire First Mortgages

NSW

$74,738,431

161

TWO DECADES IN BUSINESS In 1997 the internet was in its infancy and the fax machine still reigned supreme. It was also the year that Phillip Nguyen set up International Finance Group in Perth, and he has served international and migrant borrowers ever since. “If you’re the owner of the business you have to keep learning each day,” Nguyen says. He believes that, while changes in broking have been hard, they’ve removed part-time and amateur operators from the industry.

COULD REGULATION GET EVEN TOUGHER NEXT YEAR? Daniel O’Brien: “It can ... we might need to delve a little more into our ongoing relationship with the client to retain trail. I don’t think there will be major changes to the regulatory landscape beyond that.”

18

Jason Guo: “I would say so ... I believe the government is going to put more requirements on the compliance process, and also they may require more documents on the compliance part.”

Colin Mason: “We always allow for it. At the end of the day there’s really nothing we can do about that: we’ve got to put procedures and policies in place, and it all comes down to our market share.”

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2/11/2017 1:51:03 PM

SPONSORED BY

ON THE SLIDE The value of loans written by our Top 100 Brokers fell for the second year in the row, dropping back below the $10bn mark to $9,984,386,795, the lowest level since 2014. However, this year also saw a new record, with 2017’s number one broker writing an incredible $359,727,552 worth of residential loans.

Top 100 – Combined value of settlements

Top broker’s total

$11bn

$500m

$10bn

$450m

$9bn

$400m

$8bn

$350m

$7bn

$300m

$6bn

$250m

$5bn

$200m

$4bn

$150m

$3bn

$100m

$2bn

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

$50m

Productivity

MPA's Top 100 Brokers wrote 24,295 loans this year – a similar number to last year. The median broker wrote 212 loans over 12 months; however, one broker managed 983.

Median loan size This year's median loan size was $413,100, although there was great variation in the numbers. Two brokers averaged over $1m per loan, while 18 brokers averaged below $300,000.

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

ANALYSIS: 2016/17 IN BROKING If you’ve found the past two years tough, you’re not alone. This was the second year that Top 100 Broker numbers failed to increase: in fact most measures – such as the value and number of loans written – fell by around 1–2%. While last year’s decline could be considered a bump in the road, this year’s results indicate a longer-term shift in broking.

It’s no coincidence that the current round of regulation by APRA and ASIC also began two years ago, with property investors and their brokers being particularly affected. A number of brokers MPA spoke to explained that, although restrictions had driven serial investors to brokers, the restrictions also meant their ability to borrow had been significantly curtailed.

The numbers appear to back this up. The median loan size written by this year’s Top 100 was lower than in 2016, despite the median dwelling value rising 9.6% over the combined capital cities. This suggests that the link between rising house prices and rising borrowing is beginning to be broken – a key objective of Australia’s regulators.

Stagnant average loan sizes don’t explain why our Top 100 couldn’t improve their results across the year, however. The number of loans written by our brokers failed to increase, for instance. While brokers

have harnessed new technology and process management approaches, regulation and its adoption by the banks appears to have had the opposite effect. A common complaint from brokers was that banks were stalling and ‘backflipping’ on commitments, demanding increased documentation and delaying the overall process.

Despite these impediments, brokers are still performing impressively: numbers are still above their level in 2014. Unlike the NCCP, or more recently the crackdown on lending to non-residents, the tightening of investor lending does not appear to be forcing a large number of brokers out of the industry. Our overall Top 100, and particularly our Top 10, has not changed hugely from last year.

Yet there is a creeping danger for brokers: the ‘cost per loan’. Our report did not ask brokers for this figure, but if it is true that each loan is taking longer, broker costs are rising. Given that neither average loan sizes nor commissions have grown, brokers’ margins will be trimmed. With top brokers building up large and expensive teams of administrative staff over recent years, they will need to find a way to protect those margins – whether through fee for service, offshoring or diversification.

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2/11/2017 1:50:57 PM

SPECIAL REPORT

TOP 100 BROKERS

74-40 A HEAD FOR NUMBERS A new entrant to the Top 100, 68th-placed Alycia Inglis founded her brokerage, Stoneturn, in January 2015. With a Master's in Commerce and a background as a tax analyst at Deloitte, Inglis can provide specialist advice to her investor and expat clients. “I’m a bit more interested in all the tax structures and loan structures and companies, trusts and more complicated set-ups,” she tells MPA.

SUSTAINABLE SUCCESS Mario Borg first entered the Top 100 in 2005 and has been on the list almost every year since. He’s remained a top broker despite big changes. “People want certainty, and it’s the best time for a broker to shine.” Borg puts his consistency down to an excellent client service manager, learning to say no and sticking to what he’s best at: residential and investor lending.

FAST STARTER In April 2016, Jarred Spurr was still a BDM for St. George on the NSW Central Coast. Now he’s a Top 100 Broker, in 51st place, with an astonishing $84m to his name. “I think you have to have a bit of patience when you first come in,” Spurr says.“Just learn everything; talk to as many people as you can … build strong, trusting relationships with referrers and key people in the industry.”

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MPA TOP 100 BROKERS: 74-40 Rank

Name

Company

State

Total value of residential loans FY2016/17

Total number of residential loans FY2016/17

74

David Thurmond

Mortgage Choice

VIC

$75,770,021

268

73

Hannah Nguy

HAH Finance Solutions

VIC

$76,000,000

190

72

Cameron Stillman

Picket Fence Finance

VIC

$76,302,365

166

71

Cameron Price

Mortgage Choice

VIC

$76,760,678

322

70

Michelle Henriksen

Mortgage Choice

QLD

$76,906,294

276

69

Kim Horan

Aussie St Marys

NSW

$76,938,340

186

68

Alycia Inglis

Stoneturn

NSW

$77,777,273

127

67

Balpreet Bal

Loan Market

WA

$78,160,431

210

66

Keith Caine

Mortgage Choice

SA

$78,201,803

260

65

Peter Goldberg

Pinnacle Capital

NSW

$78,319,489

160

64

Phillip Jeffery

Mortgage Choice

NSW

$78,459,304

277

63

Kapil Nepal

Smartline

NSW

$79,094,298

234

62

Scott Le Quesne

Aussie Parramatta

NSW

$79,765,150

177

61

Stuart Turner

Centric Lending

NSW

$79,846,684

104

60

George Kanellis

CFC Finance

NSW

$80,555,657

225

59

Peter K Johnson

Mortgage Choice

NSW

$80,578,490

271

58

Brett Dickie

Oxygen Home Loans

NSW

$81,918,622

128

57

Leeanne Scott

Mortgage Choice

NSW

$82,721,136

188

56

Ian Simpson

Smartline

NSW

$83,050,437

184

55

Mathew Crossley

Coronis Finance

QLD

$83,135,337

341

54

Serge Scekic

Aussie Balgowlah

NSW

$83,234,410

120

53

Mario Borg

Mario Borg Strategic Finance

VIC

$83,981,608

143

52

Andrew Kelly

Anasta Finance Consulting

NSW

$84,007,209

142

51

Jarred Spurr

Sphere Finance

NSW

$84,022,440

182

50

Holly Bundy

Bundy Financial Services

VIC

$84,211,546

176

49

Scott Partridge

Mortgage Choice

NSW

$84,856,360

212

48

Sahdeo Singh

RDN Mortgages

NSW

$85,351,745

205

47

Ryan Ewart

Mortgage Choice

NSW

$85,537,102

214

46

Trevor Ryan

Aussie Home Loans

QLD

$85,960,000

251

45

James Henwood-White

eSelect Finance

VIC

$89,420,034

184

44

Leon Spadavecchia

Afirm Financial

SA

$90,362,223

157

43

Jessie Xi Wang

N1 Group

NSW

$93,027,078

202

42

Kiran Thapa

Capkon Investments

NSW

$94,721,539

292

41

Simon Orbell

Smartmove

NSW

$94,867,711

151

40

Deanna Ezzy

Trilogy Investment Property Funding

ACT

$96,273,936

295

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2/11/2017 1:50:49 PM

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WHERE THE POWER LIES What’s happening in New South Wales?

Something special, if you judge by MPA’s Top 100: more than half this year’s list hail from Australia’s first state.

NSW’s dominance is not particularly surprising. With the median Sydney dwelling costing $400,000 more than its counterparts in Perth and Brisbane, brokers in those cities have to write many more loans to keep up.

More surprising is Victoria, which saw a fall in the number of Top 100 brokers. While Melbourne prices are slightly lower than Sydney’s, they are still relatively high, and according to many experts they are set for more sustainable growth over the next few years. In fact last year’s census found that the state’s population was more than 100,000 higher than expected.

The number of brokers in Queensland has been stable, but Western Australia saw a fall commensurate with a slow economy and housing market in Perth. South Australia made a return to the Top 100 this year, having gone unrepresented last year, while the Northern Territory and Tasmania have no Top 100 brokers for the second year running.

With many top brokers having national databases, however, the impact of location shouldn’t be overestimated.

Western Australia

5 brokers $484,000

Queensland

0 brokers $480,000

15 brokers $497,200

Dean LaFrenais InReach Finance

Colin Mason SMS Finance

New South Wales

52 brokers $880,000 Justin Doobov Intelligent Finance

South Australia

3 brokers $440,000

Victoria

Scott Marshall The Loan Arranger

No. of brokers

ACT

24 brokers $675,000

1 broker $625,000

Mark Davis The Australian Lending and Investment Centre

Deanna Ezzy Trilogy Investment Property Funding

Median capital city dwelling price, June

Tasmania

0 brokers $355,000

2017 Top Broker Source: CoreLogic Home Value Index June 2017. Note figures refer to capital city, not entire state.

DO YOU HAVE A GENERAL MANAGER?

6/10 have a general manager or similar

Northern Territory

We asked our Top 10 brokers whether they had a general manager. While the exact title might vary, the general manager is a senior staff member who takes care of administrative tasks, staff management, payroll and occasionally hiring and training. This frees up the broker to do what they do best – meeting clients and structuring loans.

AGGREGATORS IN THE TOP 100 LARGEST FRANCHISES

LARGEST WHOLESALE AGGREGATORS

Mortgage Choice

Connective 21

Aussie

19 AFG

15 Loan Market 3

13 Finsure 6

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2/11/2017 1:50:46 PM

SPECIAL REPORT

TOP 100 BROKERS

45-11 39-11

Rank

Name

Company

State

Total value of residential loans FY2016/17

Total number of residential loans FY2016/17

39

Colin Lamb

Mortgage & Finance Solutions

WA

$96,475,703

251

38

Scott Marshall

The Loan Arranger

SA

$97,086,789

364

37

Peter Gwynne

Financing Property

QLD

$98,000,000

293

36

Rooma Nanda

All R Loans

NSW

$98,300,000

174

35

Angelika Darbinian

Aussie Crows Nest

NSW

$98,303,800

97

34

Andrew Heath

Mortgage Choice

NSW

$98,612,483

314

33

Jacky Yu Gu

Linfield Finance

NSW

$100,000,000

220

THERE’S MILLIONS IN MEDICINE

32

Paul Wright

Choice Home Loans

NSW

$100,555,331

389

31

Darren Comerford

Mortgage Choice

QLD

$100,596,723

375

Have you ever written a loan worth over a million dollars? Louis Kovanis has – in fact the average loan Kovanis writes is worth $1,026,923, the highest of any broker in this report. The clients of Genius Loan Solutions aren’t bankers or sports stars; they’re senior doctors with the desire and resources but lacking the time to invest in property.

30

Rachelle Eyndhoven

Sphere Finance

NSW

$100,670,330

270

29

Ross Le Quesne

Aussie Parramatta

NSW

$102,980,618

285

28

Darren Liu

My Home Loan

NSW

$104,234,513

142

27

Nicholas Don

Odyssey Financial

VIC

$104,600,000

160

26

Josh Egan

Astute Melbourne City South/Gippsland

VIC

$104,946,000

295

25

Luke Torossian

Aussie Engadine

NSW

$105,837,365

192

24

Vishal Gupta

Unique Finance Services

NSW

$106,753,785

206

23

Damien Roylance

Entourage

VIC

$111,497,090

160

A PERSONAL TRAINER FOR YOUR FINANCES

22

Kelly Cameron

Get Real Finance

QLD

$112,787,011

473

21

Raymond Teh

Mortgage Choice Pyrmont

NSW

$112,832,080

277

Sign up with Infinity Group Finance and you’re getting more than a loan – you’re getting a complete “private banker for mum and dads”, as director Graeme Holm puts it. The brokerage offers a complete budgeting solution; it manages savings and investments while giving the client a debit card for essential spending. This tough-love approach has gone down well with borrowers – Infinity Group Finance is a finalist for the Optus Business Awards.

20

Daniel Hustwaite

Aqua Financial Services

VIC

$116,236,385

304

19

Navjeet Singh Matta

Gain Home Loans

NSW

$117,412,762

301

18

Dean LaFrenais

InReach Finance

WA

$121,000,000

312

17

Anthony Alabakov

My Mortgage Freedom

VIC

$128,400,000

221

16

Deslie Taylor

Mortgage Choice

QLD

$129,895,650

385

15

Louis Kovanis

Genius Loan Solutions

NSW

$133,500,000

130

14

Lloyd Thomas

DPN

NSW

$133,750,840

240

13

Graeme Holm

Infinity Group Finance

NSW

$136,000,000

483

12

Andrew Algie

Addisons Advisory Group

NSW

$137,016,944

274

11

Alex Lambros

Strategic Investor Group

NSW

$138,995,421

191

UP IN THE CROWS NEST Angelika Darbinian is a regular Top 100 Broker and one of Aussie’s top brokers. Serving Sydney’s affluent lower North Shore, Darbinian deals with big loans for big properties: the average loan she writes is worth $1,013,441.

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MPA TOP 100 BROKERS: 39-11

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2/11/2017 1:50:34 PM

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WOMEN IN THE SPOTLIGHT 2016/17 has been a great year for female brokers, with 16 making it into the Top 100, the highest level in recent years.

Rank Name 16

Deslie Taylor

22 30

Company Mortgage Choice Ormeau

Total value of Total number of State residential loans residential loans FY 2016/17 FY 2016/17 QLD

$129,895,650

385

Kelly Cameron Get Real Finance

QLD

$112,787,011

473

Rachelle Eyndhoven

Sphere Finance

NSW

$100,670,330

270

33

Jacky Yu Gu

Linfield Finance

NSW

$100,000,000

220

35

Angelika Darbinian

Aussie Crows Nest

NSW

$98,303,800

97

36

Rooma Nanda All R Loans

NSW

$98,300,000

174

40

Deanna Ezzy

ACT

$96,273,936

295

43

Jessie Xi Wang N1 Group

NSW

$93,027,078

202

50

Holly Bundy

Bundy Financial Services

VIC

$84,211,546

176

57

Leeanne Scott

Mortgage Choice North Sydney

NSW

$82,721,136

188

68

Alycia Inglis

Stoneturn

NSW

$77,777,273

127

Trilogy Investment Property Funding

69

Kim Horan

Aussie St Marys

NSW

$76,938,340

186

70

Michelle Henriksen

Mortgage Choice Bundall

QLD

$76,906,294

276

73

Hannah Nguy

HAH Finance Solutions

VIC

$76,000,000

190

86

Tik Kamtan

Aussie Baulkham Hills

NSW

$71,767,696

147

100

Debbie Worthington

Mortgage Choice Warners Bay

NSW

$67,214,233

264

LEADING LADIES Writing well over $100m for the second year in a row, 16th-placed Deslie Taylor is Mortgage Choice’s top broker in this year’s Top 100. Her consistent success is particularly impressive given that Taylor is based not in Sydney or Melbourne but in Ormeau in the far south of Brisbane.

Kelly Cameron of Get Real Finance, in 22nd place this year, has a career spanning three universities and the Asian currency crisis, during a stint working in Korea.

Get Real Finance is celebrating a decade in business this year and another Top 100 appearance for Cameron.

10

GLENN ENGLISH Aussie Carnegie Carnegie, Vic Aggregator: Aussie Total value of residential loans FY2016/17: $147,244,514 Total number of residential loans FY2016/17: 324

Aussie’s number one broker has had a steady and determined rise to the top. In 2015 Glenn English was ranked 28th in MPA’s Top 100; he added almost $30m to his total to reach the 14th spot in 2016.

He needed just $100,000 more to reach this year's Top 10, but in a year in which investors and thus brokers have been hit hard by regulation, that has been enough.

Despite the impact of lending policy changes and banks leaving the market, investors have been good to Aussie Carnegie, English explains.

“Many of our existing customers returned to Aussie Carnegie to take advantage of investment opportunities. We also grew our team to help manage the increased volume of work from returning customers, new enquiries and referrals.”

The brokerage was ranked one of MPA’s Top 10 Franchise Brokerages this year, with English writing the bulk of the business. As well as hiring additional staff members, English has looked to upskill his existing team; as a result “we increased efficiencies in our systems and processes by team members taking on new responsibilities as part of their daily tasks”.

After a big year of recruitment English is now focused on embedding his new staff into the business. “We will now build on that success and those processes for the coming year,” he explains. English is supported by an office manager who takes care of general administration and payroll so he can concentrate on bringing in business.

For a business focused on investors, regulation remains a concern.

The introduction of a limit on interest-only lending and ASIC’s toughening up of interest-only lending standards only occurred towards the end of the year measured for this Top 100 (the 2016/17 financial year), and so its impact will be felt most sharply by 2018’s Top 100.

English, however, can see the opportunities that market change could bring: “With many banks reacting to regulatory restrictions on interest-only loans by increasing rates, it seems the number of investors in the market might decrease, providing the opportunity for more first home buyers and owner-occupiers to enter.”

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2/11/2017 1:50:28 PM

SPECIAL REPORT

TOP 100 BROKERS

9

DANIEL O’BRIEN PFS Financial Services Bella Vista, NSW Aggregator: PLAN Total value of residential loans FY2016/17: $159,713,452 Total number of residential loans FY2016/17: 400

Daniel O’Brien is surprised and indeed “ecstatic” about his numbers, adding $4m to his total in a year despite taking two months off and despite the impact of regulation. “With all these APRA changes people’s borrowing capacities are down by 20–30%,” O’Brien says.

“Our loan sizes and volumes have been affected by that.”

Borrowers face a myriad of challenges and O’Brien spells a number of them out. Some are well known, such as living expenses being judged in different ways; some less so, such as borrowers with tax-free allowances (for example healthcare professionals) not having these allowances factored in by the banks.

Submitting an application is rarely the final hurdle, O’Brien explains. “We’re definitely finding that when we’ve satisfied their checklist they’ll come back and not so much say ‘no’ but come back and ask for a whole bunch more stuff, which is really incentivising us to go away and go elsewhere.”

PFS Financial Services’ continued success is down to “the same thing that allows us to be successful every year, and that’s tight systems and tight processes. We’re 13 years in, so by now we’ve ironed out all the kinks.”

This was recognised last year at the Australian Mortgage Awards, where PFS was named NAB Australian Brokerage of the Year in a huge achievement for what remains a small organisation.

Those tight systems and processes survive in large part thanks to experienced staff members, the two most senior of whom have been at the brokerage for 11 and seven years respectively. “By this point they know more about some things than me,” O’Brien quips.

O’Brien puts a huge emphasis on the ‘one-percenters’: “things that are easy to do but easier not to do, and we choose to do them”. That includes contacting clients at every stage of the loan process, which has another advantage: “If we’re telling a client there’s a delay it shows that we’re in control, and they’re comfortable and not calling us 10 times a day.”

While O’Brien is considering software improvements for his brokerage, his focus remains on ‘natural’ growth. “We never strive to be cuttingedge; we just concentrate on the little things.”

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JASON GUO Centum Mortgage Group South Melbourne, Vic Aggregator: Vow Financial Total value of residential loans FY2016/17: $162,296,228 Total number of residential loans FY2016/17: 282

Remaining in the Top 10 this year is a tribute not only to Jason Guo’s talents as a broker but also to his foresight. In January 2016 Guo made a major change to Centum Mortgage Group, tearing up the old ‘conveyor belt’ processing model and replacing it with a straightthrough model, in which a single staff member handles applications from beginning to end. He also increased the paperwork his team demanded from clients as part of a general drive towards compliance.

Given the regulatory interventions that have occurred in the intervening two years, it’s clear that Guo saw the signs of what was to come. With other brokerages finding their efficiency compromised as they struggle to respond to new requirements, Centum’s has increased.

“The employees have become more efficient, because they’re more familiar with the procedures and structure,” Guo says. His overall total has slipped only slightly from last year, and his average loan size has increased substantially.

“Because we’d changed the structure the year before, we’d already added more paperwork,” Guo explains. The brokerage has since hired an overall compliance manager and has its own processing note explaining additional details about the loan, paralleling the major banks’ drive for additional borrower details.

Guo cannot stop his investor clients reaching the ceiling on their residential borrowing capacities, but he can find them alternative strategies. One of these has been encouraging professional investors to consider investing in commercial property. “They’ve still got the money and want to invest it in the property market,” Guo explains. “They can use the rental income to assist their commercial borrowing capacity; they can get a rental return and they have the potential for a capital gain as well.” The brokerage’s volumes have subsequently increased on the commercial side, while keeping clients happy.

Given that in 2016 Guo was named ’s ‘Young Guns’, his rise has one of MPA’s been astonishing: at 34 he’s the youngest broker in the Top 10. Guo is confident that Centum can continue to grow.

“From the current forecasting on our business, we already have a 10% settlement increase each month,” he says, “so by the end of this year we’re looking at about a 15–20% increase for the business.”

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SPONSORED BY

7

KEVIN AGENT The Australian Lending & Investment Centre Melbourne, Vic Aggregator: Connective Total value of residential loans FY2016/17: $163,589,589 Total number of residential loans FY2016/17: 499

Kevin Agent has a saying that neatly sums up the impact of regulation on brokers: “It’s 25% less fun and 25% harder.” Agent’s brokerage, The Australian Lending & Investment Centre, has turned itself into Australia’s most successful brokerage through a dogged focus on property investors, winning multiple Australian Mortgage Awards in the process. Now the tables have turned and Agent is tasked with managing increasingly frustrated clients.

“The reason that it’s APRA only washes so far,” Agent says. “We say to the clients, ‘That’s life: the market isn’t driven by the RBA any more; it’s driven by the banks’ balance sheets’.”

He also needs to manage expectations. With strong rises in property prices, a number of would-be investors are seeking finance without understanding quite how much bank standards have changed in recent years. Furthermore, Agent says, “the younger generation hasn’t been through a recession and they haven’t seen interest rates at 10–15%; and there’s a naivety that rates at 4–5% will be around for a long time.”

In addition to dealing with existing investors looking to transition from interest-only to principal and interest repayments, Agent also deals with early and even potential investors. “We can deal with clients under 30 who are on $60,000 a year; we may do nothing with them, but we’re spending time on budgeting and long-term plans are.”

That includes a high number of ‘rentvestors’; in fact it often makes more sense for these clients to purchase cheaper investment properties rather than maximising their borrowing capacity – and repayments – on large properties to live in.

Despite all the changes over the past year, Agent is optimistic.

“The margin between owner-occupied and investment will come back again as the profiles of the banks change and they meet their cap.”

He’s still getting new clients who can no longer go straight to the bank, and like all ALIC’s clients he looks to keep them for the long term. “The ultimate goal for the business is still to get to $1bn a year,” Agent says. “We’re aiming in the next two or three years to hit that.”

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COLIN MASON SMS Finance Maroochydore, Qld Aggregator: AFG Total value of residential loans FY2016/17: $171,471,774 Total number of residential loans FY2016/17: 474

As property prices in Sydney and Melbourne leave the rest of Australia behind, brokers in other cities and regions have to work ever harder to write similar numbers. Colin Mason not only proves it can be done; his brokerage, SMS Finance, shows it’s possible to dominate an entire region.

Mason is not based on the Sunshine Coast just for the lifestyle; 95% of his work comes from the area. “We’ve got over 200 real estate agents on the Sunshine Coast and further north and south that refer business to us,” Mason explains. “Our motto is ‘Just get the job done’; if we do the job well enough and keep the lines of communication open, we find that the real estate agents love that and keep referring business to us.”

A long-standing Top 100 broker, Mason’s move into the Top 10 this year owes much to his joining John McNamara at SMS Finance.

The team is 30 strong and “we’ve recruited more staff, which frees up more of my time to get out there and do more business development type work”. With the assistance of seven sales staff and a sevenstrong processing team, Mason’s role in the application process is focused on meeting the client and initial product recommendation.

SMS Finance’s response to lending restrictions has been to increase market share, Mason explains, with the brokerage catering to “first home buyers through to mum-and-dad investors and commercial clients as well … we treat all clients the same; at the end of the day they’re coming to us and we want to help everyone”. Many interestonly investor clients are being transferred to principal and interest loans. Additionally, the brokerage has just secured a new referral relationship, adding another 50–60 referral partners to its cohort.

“Our motto is ‘Just get the job done’ ” A growing population in the Sunshine Coast offers further opportunities for Mason. He is working with the developers of new housing estates, including Stockland, hoping for huge potential benefits. “There are thousands and thousands of clients that we will hopefully pick up along the way,” he says.

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SPECIAL REPORT

SPONSORED BY

TOP 100 BROKERS

5

PETER ELLIS Century 21 Home Loans Sydney, NSW Aggregator: AFG Total value of residential loans FY2016/17: $172,686,689 Total number of residential loans FY2016/17: 206

At first glance, not much has changed for Peter Ellis. He’s in the same position as in 2016 – 5th place – having written just $70,000 more over the intervening 12 months. Ellis is still based in Sydney’s CBD, running his twin businesses, Ellis Financial and the Century 21 broking franchise, and utilising an extensive referral network of real estate agents.

Yet to assume that Ellis has remained entirely untouched by the winds of change sweeping through the industry would be very wrong. “The investor market has been hit pretty hard by APRA changes and restrictions on the lenders,” Ellis explains. “That’s been pretty tough, but having said that, we’ve written a lot of investor loans.”

His response has been to focus on refinancing existing clients, particularly in 2017 as APRA, ASIC and the lenders have looked to reduce interest-only borrowing. This has contrasted with sharply priced offers for the groups that the banks do want to target, Ellis explains. “There have been some really good offers for owneroccupier [principal and interest] from some of the smaller lenders.”

Getting his clients on to these P&I sub-4% products is the new mission for Ellis and his team, who are analysing the rates paid by the clients on their database and proactively getting in contact.

While it is still possible to find cheaper interest-only rates, these are “not much cheaper, because they’re not the flavour of the month with lenders because of all the APRA changes”. Impressively, refinancing now makes up a larger part of their business than new purchases.

Ellis has made another shift over the past year, this one geographical. Previously focused on Sydney’s Eastern Suburbs, “a lot of my business now is coming from the Hills District, and the loan sizes out there were previously lower; now they’ve started to increase.

It’s probably changed the dynamic of our business.”

While he sees regulation getting tougher over the coming year, Ellis is focused on expansion: “I want the business to be writing more, because we’ve put on four new brokers this year and next year we hope to put on up to 10.”

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ANDREW MIRAMS Intuitive Finance Sandringham, Vic Aggregator: Connective Total value of residential loans FY2016/17: $179,855,741 Total number of residential loans FY2016/17: 346

It’s not only brokers who are noticing the wave of rate rises and lender restrictions on property investors; borrowers are too. Increasingly, they’re looking not only for a broker but for a particular type of broker, Andrew Mirams explains: “I think there’s a flight to quality … as the market’s got a bit tougher, people are looking for that specialist advice.”

Located in southeast Melbourne, Intuitive Finance is a specialist brokerage catering to property investors. It is getting an increasing amount of business from clients of generalist brokers but also from the banks. “We ask everyone whether they’ve used a broker before and, surprisingly, a lot of our new clients haven’t.”

Consequently, the brokerage is growing. Mirams took on three extra staff this year, including a general manager to take over administration duties. With three extra staff also taken on in late 2016, Mirams says his focus is increasingly turning to training and mentoring. “We’re just working on developing the people and processes here.”

Other than Mirams, Intuitive Finance has two other brokers, one in the office and one on the Sunshine Coast. Mirams’ son will soon be becoming a broker, with another young recruit set to start 12–18 months later, helping the brokerage better appeal to stay-at-home ‘rentvestors’.

“They’re millennials and they’re going to be able to appeal to that market, whereas my market is a lot more investment,” Mirams says.

Mirams himself has managed to raise his personal numbers this year from just under $165m in 2016, despite the many changes to investment lending. “It’s not efficiency,” Mirams explains. “It’s more about knowing what you’re good at. We’ve probably got better at saying no, because some people are at their limit and think they can get a loan with us; you’ve just got to manage expectations.”

Investors are still in the market and not necessarily concerned about small rate rises, Mirams insists.

The strong, if slowing, growth in Melbourne and Sydney property prices means investing is still viable.

As Mirams puts it, “would you pay 1% to earn 15%?” However, Mirams believes regulation could get tougher in 2018: “I think there will be far more scrutiny of living expenses and there will be a massive education piece explaining to clients what analysis needs to be done.”

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SPECIAL REPORT

SPONSORED BY

TOP 100 BROKERS

3

JOSH BARTLETT Loan Market Cheltenham, Vic Aggregator: Loan Market Total value of residential loans FY2016/17: $184,700,000 Total number of residential loans FY2016/17: 485

In a year of regulatory pressure and uncertainty, with many brokers happy to maintain their numbers, Josh Bartlett stands out from the crowd. For his first six years in broking Bartlett was still running gyms; over the past two years he’s moved from 16th to 6th place and this year to the third spot in the Top 100, having added $20m to his total.

That Bartlett can continue to prosper in this market reflects in part the clients he deals with. Whereas most Top 10 brokers specialise in investors, Bartlett’s network of real estate agents puts him in contact with more owner-occupiers. He believes APRA’s restrictions have actually helped his business: “Anything that we are lodging, there’s probably a lot better conversion to people purchasing, especially over the past three to four months … because of investors dropping out there’s more owner-occupied purchases.”

Bartlett is also building on years of good relationships and a growing reputation. “I get better-quality leads now by winning these awards,” he says. “When a customer calls me now they’re already going to do a deal. They’re calling me going, ‘We’ve been told we have to talk to you. When can we see you?’” There’s much less chasing business; in fact Bartlett has conducted meetings from his office for the last two years.

Real estate agents are crucial to Bartlett and he has put considerable effort into educating them in recent years, even developing the ‘eBroker’ mobile app to track referrals, which has since been extended to the entire Loan Market Group. Recent lending policy changes have made this education all the more important. “I’m doing a big drive on that at the moment, seeing two groups of referral partners every single week,” Bartlett says.

Next on Bartlett’s list of targets is hitting $200m in residential settlements, and he’s taken on an executive assistant to help focus on writing loans. He remains confident that the tough lending landscape gives him an edge: “I think you’re going to find more professional brokers in the future and less of those brokers that are only doing one or two deals, because I have no idea how those people could keep up.”

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MARK DAVIS The Australian Lending & Investment Centre Melbourne, Vic Aggregator: Connective Total value of residential loans FY2016/17: $287,395,489 Total number of residential loans FY2016/17: 983

2017 is a year Mark Davis won’t soon forget. “It’s probably the hardest year we’ve had in the eight years I’ve been a broker,” he says.

Davis was number one in last year's Top 100, and his total of $287m this year places him far ahead of the rest of the pack, yet the impact of regulation and lender policy changes on his performance cannot be ignored. Davis has lost $50m from 2016’s record-breaking total, and although he’s written the highest number of loans over the year – 983 – his average loan value has also declined.

Although The Australian Lending & Investment Centre remains a well-oiled machine, Davis and his colleagues face a major obstacle.

“People that used to leverage and borrow up can’t borrow as much as they used to because all the calculations are completed differently,” he says. Furthermore, Davis, who prides himself on a high work rate and near-mechanical efficiency, is being frustrated by banks who aren’t acting the same way. Frequently they are ‘backflipping’ after giving the approval.

With the market in turmoil, “clients hear about ALIC and what we do and want us to step in and manage their situation better than their previous adviser”, Davis explains. “That sets up opportunities, but we all have to comply within the same guidelines; you can’t pull a rabbit out of a hat.”

Existing customers are also looking to switch lenders following a succession of rate rises, while the changes to interest-only lending are pushing these clients to switch to principal and interest repayments.

A tough year has sharpened Davis’s focus on ALIC’s long-term strategy: to develop the next generation of elite brokers. “We’re presently writing $450–$500m a year and we shouldn’t have to do that … my biggest responsibility is to train up brokers to be $100m writers; that’s a lot of work, but you get your weight in gold because they help you with all your paperwork.”

Backed by his team, Davis is already preparing for the coming buyers’ market: “It’s been a vendors’ market for the last three years and we want our customers to be ready to get great deals and be ready to buy.”

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2/11/2017 1:49:51 PM

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SPECIAL REPORT

TOP 100 BROKERS

7

JUSTIN DOOBOV

Aggregator

Choice Aggregation

Total value of residential loans FY2016/17

$359,727,552

Total number of residential loans FY2016/17

593

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Intelligent Finance Bondi Junction, NSW

If you had any doubt about just how competitive the elite tier of broking has become, follow the journey of Justin Doobov. In 2015 he broke through the $300m barrier but was beaten by just $3m; in 2016 Doobov raised his numbers again and was again thwarted. This year, with rivals dropping off, Doobov added an astounding $30m to his total and now holds the alltime Top 100 record with almost $360m under his belt.

Doobov is the first to admit that his brokerage, Intelligent Finance, is not revolutionary: “We’re not trying to be big one day and gone the next; it’s all about consistency.”

The brokerage enjoys several advantages, the first of which is Doobov himself, with his long track record with banks and clients. The company doesn’t advertise and doesn’t need to.

Second is its location: property values in Sydney’s Eastern Suburbs are among the highest in the nation, giving Doobov “a bit of a free kick”, as he puts it.

Finally, the brokerage is structured to support Doobov, with staff getting promoted up the pyramid as they become more efficient and experienced at processing loans, and Doobov constantly tweaking and improving the system. The aim is simple: “Our philosophy is we overservice the client.”

Regulation has made this more easily said than done. “Every deal is harder than prior years,” Doobov says. “Yesterday I spent six hours fighting with one of the banks and four hours the day before to overturn their decision; they said they wouldn’t do the deal, and in my eyes it was a low-risk deal.” The deal went through, like many others, because Doobov had ‘mapped out’ how to deal with every one of the bank’s objections. “No is negotiable; that’s my key thing.

Don’t tell me no; tell me how much you want to lend them. You might not want to lend them $2.5m, but will you lend them $1m? Yes, you will.”

Having to spend several hours arguing with a bank

over every loan is far from ideal for a broker so focused on efficiency. This is why the brokerage’s structure is so important, Doobov explains. “A lot of the fighting and chasing of applications is done by my team. When it gets into a big fight, where [the bank is] not seeing it, I get involved in getting it across the line.”

Doobov is also helped by having less of an overt focus on property investors – who are the targets of much regulation – compared to his competitors.

Increased regulation has meant that “you spend less time servicing a customer and more time doing the paperwork, when it should be the other way around”, Doobov says. This is a curse and a blessing: “[New] clients say, ‘They don’t offer me the service they did five years ago’, but with this regulation, most brokers are getting bogged down in paperwork. It takes a lot more man hours to service clients like we used to and hold their hand as much.”

The obvious solution would appear to be hiring more support staff, but Doobov is cautious. “I’d love to hire more people in Sydney who can process and manage new client relationships to allow us to process more applications. It’s just very hard to find the right staff.”

There’s another reason to be concerned: the brokerage’s cost per loan is rising, but Doobov’s income per loan is essentially fixed, he says. “Some of the banks are talking commissions downward, but if anything the commissions should be increased, because of the amount of work we need to do now to get a loan approved.”

While other award-winning brokers have spun off their success into much larger business ventures, Doobov is not convinced by his larger or more websavvy competitors. “They keep telling me that my model is more efficient, and whilst every model has its stresses the grass isn’t always greener. At this stage it will just be doing more of the same and trying to look after more clients more efficiently and keep going, as I love working with my clients.”

“Every deal is harder than prior years.

Yesterday I spent six hours fighting with one of the banks”

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2/11/2017 1:48:43 PM

SPONSORED BY

Justin Doobov (left) is presented with the trophy by Mark Vilo, head of bank intermediaries at Suncorp

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EVENT PARTNER

Brokers, bankers, aggregators and service providers came together to celebrate the industry’s finest at the 16th annual Australian Mortgage Awards at The Star Sydney IT WAS never just about the trophies. Certainly, the recognition of outstanding professionals has been a huge part of the Australian Mortgage Awards for 16 years now, and an AMA trophy remains the crowning achievement in the career of any broker.

Yet the AMAs are first and foremost about bringing the industry together.

A day in the life of a broker, in particular, can be a lonely one. Apart from the occasional PD day or conference, it’s rare to spend time with counterparts and competitors; the AMA event is one of very few occasions on which top brokers from all aggregators can be found in one room. Attendees can talk not just to the year’s high performers but to award winners spanning almost two decades of industry development.

Given all the events of 2017, bringing the industry together has become more important than ever. In his opening speech, Westpac’s general manager of third party distribution, Tony MacRae, talked about the

constant regulatory pressure and criticism the industry had endured. The AMAs, MacRae said, was a chance to move off the defensive and be proud of the significant progress the industry has made over the year.

Thirty-one trophies were given out to the winners this year, in addition to four ‘Highly Commended’ accolades. These went to Matt Poulter of Commonwealth Bank, in the category of Best Major Bank BDM; Darren Stratford of RESIMAC, for Best Non-Bank BDM; Redom Syed of Confidence Finance, for ING Young Gun of the Year – Independent; and Fundsnational’s Giulio Avian, for Pepper Money Broker of the Year – Specialist Lending.

Congratulations to all the winners, those highly commended and all the finalists: with thousands of applications for the awards, simply making it to The Star was a significant achievement. We’d also like to thank all our judges, presenters, award sponsors, and our event partner Westpac. Got your eye on a trophy?

The countdown to 2018’s AMAs begins now.

2017 AMAS BY THE NUMBERS

650 guests

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3,024 nominations

214 finalists

31 trophies

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months to plan the AMAs

6/11/2017 1:34:11 PM

AUSTRALIAN MORTGAGE AWARDS WINNERS 2O17 BEST INDUSTRY ADVERTISING CAMPAIGN

LIBERTY

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BEST INDUSTRY SERVICE

NEXTGEN.NET

Distinctive, quirky and memorable: Liberty’s sales manager John Mohnacheff has much in common with the adverts he’s created. Liberty changed its approach this year, Mohnacheff explains: “Rather than talking about product, we’re talking about innovative solutions with a subliminal quirky message.”

NextGen.Net is best known for its pioneering technology, but its role goes beyond that, says director Tony Carn (pictured left). “Technology is fantastic, but it’s the change management that goes with it, so getting out there and advocating products and showing people how to use them,” Carn says.

MOST EFFECTIVE ONLINE PRESENCE – LENDER

MOST EFFECTIVE ONLINE PRESENCE – AGGREGATOR

PEPPER MONEY

CONNECTIVE

Sarah Pikardt (pictured centre), channel marketing manager at Pepper, says what made the difference this year was Pepper’s new customer conversion toolkit. The toolkit includes a product selector, selling techniques and more.

“We’ve tried to make everything as easy as possible for our brokers,” Pikardt says.

“We want to develop a service and an offering that brokers can’t do without,” says Connective’s head of wholesale, Mark O’Shaughnessy (pictured right).

“We want to be top of mind … we need to earn the right to be their aggregator every day.”

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EVENT PARTNER

MOST EFFECTIVE ONLINE PRESENCE – BROKER

EMPOWER WEALTH MORTGAGE ADVISORY

It’s been a great year for Empower Wealth, a property investment brokerage set up by Ben Kingsley, chair of Property Investment Professionals of Australia and a prominent commentator on ethical conduct in property investment.

The brokerage’s website features a range of educational videos, podcasts, an e-book, free reports and a webinar.

It’s paying off for Empower Wealth, with broker Matthew Styles (pictured right) being named as one of MPA’s 2017 Young Guns. “We’re all about the client,” Styles says. “Keeping them number one puts us in good shape to be able to collect this award.”

LA TROBE FINANCIAL BEST CUSTOMER SERVICE FROM AN INDEPENDENT OFFICE

PFS FINANCIAL SERVICES

When you’re writing $159,713,452 worth of residential finance over 400 loans, it’s understandable if you have little time or energy left for customers.

But for Daniel O’Brien (pictured left) and his brokerage, PFS Financial Services, it’s that customer service that leads to success. “We do the same thing year in, year out; we focus on the little one-percenters that are easy to do, but easier not to do.” That’s why O’Brien is keen to have the brokerage’s customer service excellence recognised. “It’s probably the one we wanted the most, to be honest.”

AWARD SPONSOR

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6/11/2017 1:34:32 PM

AUSTRALIAN MORTGAGE AWARDS WINNERS 2O17 NON-BANK OF THE YEAR

PEPPER MONEY

It’s been a huge year for Pepper Money and a turning point for what has become a major international organisation. With a takeover bid by global equity firm KKR Credit Advisors looking increasingly likely (at time of writing), Pepper was applauded for its specialist lending and non-conforming offering in this year’s Brokers on Non-Banks survey.

“I think we’ve all tried really hard,” explains corporate affairs manager Melinda Hoffman (pictured centre right). “It’s been an amazing year for everyone; we’ve had record originations, really good support from our broker network and partners.”

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MSA NATIONAL NON-MAJOR BANK OF THE YEAR

ING

With new CEO Uday Sareen arriving at the end of last year, 2017 has represented a new start for ING. But it’s not all been plain sailing, says national sales manager Ray Esho (pictured centre). “Truth be told, we’ve had a pretty tough year, but to come out with an award was really exciting. We’ve got some really passionate people at the bank; we recruit with a real focus on culture, and that’s made the difference.”

EVENT PARTNER

MAJOR BANK OF THE YEAR

WESTPAC

If you’re in any doubt why Westpac walked away with a trophy this year, have a look at MPA’s Brokers on Banks awards. This was the third year in a row that Westpac was voted number one by brokers, by a wide margin.

Winning the AMA award in 2017 is particularly important to the major bank, as NSW/ACT state manager Sarah Willsallen explains: “To win the pinnacle award in our 200th year, we’re just delighted!” She puts the win down to “our ongoing relationship with brokers and understanding what the customer relationship is for them and the ecosystem we’re part of”.

AWARD SPONSOR

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AUSTRALIAN MORTGAGE AWARDS WINNERS 2O17

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AGGREGATOR OF THE YEAR (UP TO 500 BROKERS)

AGGREGATOR OF THE YEAR (OVER 500 BROKERS)

OUTSOURCE FINANCIAL

FINSURE

Tanya Sale, Outsource’s CEO (pictured right), is ecstatic about winning an award. “It’s been such an exciting year for Outsource, not just this year but the last couple of years,” she says.

Sale is a passionate and outspoken proponent of independent ownership of aggregators, winning plaudits from her members and beyond.

“We’re very much a high-touch aggregator,” she explains. “We’re very much a relationship aggregator and a support aggregator. Our members are our business partners, and I think that comes through time and time again; that there’s a united front with us as an aggregator.”

For a number of years John Kolenda’s aggregator has been making the news, mainly due to the speed of its growth.

However, 2017 will be seen as the year in which Finsure really began to transform the industry, narrowly missing out on the top spot in MPA’s Brokers on Aggregators survey.

Finsure’s general manager of sales, Simon Bednar (pictured right), tells MPA: “I think we put brokers first.

We’re a broker-orientated business, and we’re a disruptor. It’s all about giving more back to brokers, maybe more than what they’re used to, and maybe it’s being rewarded.”

EVENT PARTNER

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6/11/2017 1:34:55 PM

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6/11/2017 1:34:54 PM

AUSTRALIAN MORTGAGE AWARDS WINNERS 2O17 BEST NON-BANK BDM

BEST NON-MAJOR BANK BDM

SUZANNE HEMSWORTH

SALLY HILLMAN ST. GEORGE BANK

LA TROBE FINANCIAL

40

Suzanne Hemsworth prides herself on straight talking: “If I can’t do the deal I’ll always tell them quickly so they can get on and find somewhere else to place it … that means they’ll come back with the next deal.”

“It’s all about service,” says Sally Hillman. “I just overservice my brokers.” She attributes her success to putting in the extra effort for her brokers: “I’m a very personal person, and I just go above and beyond and it’s paid off!”

BEST MAJOR BANK BDM

BANKWEST BEST AGGREGATOR BDM

JOHN KAKAKIOS

PETER BRYANT

ANZ

VOW FINANCIAL

With regulation and policy changes, it’s been tough being a BDM at any bank in 2017. John Kakakios (pictured right) recommends a straightforward approach: “Answer the phone and emails. Do what you say you can do; that’s basically all you can do.”

Making the difference as a BDM, says Peter Bryant (pictured left), comes down to whether you “can break it down and relate it to each broker’s business”.

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EVENT PARTNER

BLUESTONE BROKERAGE OF THE YEAR – DIVERSIFICATION

NEXTGEN.NET NEW BROKERAGE OF THE YEAR

TM FINANCE GROUP

COFFS COAST FINANCE

The Thomas Magdalene Finance Group, as it is otherwise known, prides itself on being “a finance company with interest in more than just your finance”.

Founder Belinda Gibson (pictured left) has over 15 years’ commercial banking experience and brings her diverse skills to the brokerage, offering residential, commercial, development, equipment, SMSF, cash flow and equipment finance, to name a few.

Gibson says this year’s success comes from “a collaboration of clients, lenders, aggregators and our team that has really supported us”.

This year’s emerging new brokerage hails from Coffs Harbour in the north of New South Wales. Prior to setting up the brokerage in late 2015, director Daniel McCarthy (pictured front left) worked in commercial and retail lending and private wealth at NAB in the Gold Coast, before moving back to Coffs Harbour to set up his own brokerage. He then took a different route, setting up a surf camp, Spot X Surf, to take advantage of the region’s incredible beaches and surf conditions.

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AUSTRALIAN MORTGAGE AWARDS WINNERS 2O17

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EVENT PARTNER

ANZ BROKERAGE OF THE YEAR (1–5 STAFF)

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

ME BROKERAGE OF THE YEAR (>20 STAFF)

LOAN MARKET BAYSIDE

1ST STREET FINANCIAL

THE AUSTRALIAN LENDING & INVESTMENT CENTRE

Every year, Josh Bartlett (pictured right) has risen up the rankings of MPA’s Top 100 Brokers report, and this year he hit third, writing $184m in residential business over 12 months.

Fittingly, Bartlett has won several awards over the years for his individual achievements, but his growing numbers are made possible by a well-organised brokerage.

He says, “This business is about consistency – delivering properly, and making sure you deliver on all your promises and doing it all with as much speed as possible, let’s be honest.”

An industry legend, Jeremy Fisher (pictured left) has built up a powerful brokerage around him. This year saw 1st Street Financial place second in MPA’s Top 10 Independent Brokerages report, aided by new CEO Ofer Greenberg and a renewed focus on finding new business. More support has in turn enabled 1st Street’s brokers to improve their numbers. Explaining the brokerage’s success, Fisher says: “I’ve been doing it for a while, so hopefully we’ve been doing the right thing and looking after our clients and looking after everyone in the office, so persistence and consistency.”

ALIC managing director Jason Back (pictured right) is overjoyed at having collected a trophy, and no wonder.

“This is actually the fourth year in a row that we’ve won this one,” he says.

Since 2014, ALIC has topped MPA’s Top 10 Independent Brokerages ranking, and that “blood, sweat and tears” has yet again been recognised by the AMAs. For a brokerage focused on investment lending, 2017 has not been easy, however. Back describes it as “25% harder – we had to pedal a bit faster but just focus on efficiencies and great client outcomes.”

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AUSTRALIAN MORTGAGE AWARDS WINNERS 2O17 YOUNG GUN OF THE YEAR (FRANCHISE)

ING YOUNG GUN OF THE YEAR – INDEPENDENT

LEE WISNIEWSKI

MISA HUYNH

LOAN MARKET

SMARTMOVE

A finalist in 2016, Lee Wisniewski (pictured left) believes the extra year in business made the difference in winning this year’s award. “I think there was just a bit more maturity in our business,” he says. “We put on new staff and services, embracing technology and really cementing why we do what we do.”

Wisniewski has an inspiring past: in 2008 he underwent emergency brain surgery and emerged with a desire to empower clients, through broking and beyond: 10% of the income generated by the business goes into community and charity work.

Sydney-based brokerage Smartmove is a growing force. It came third in this year’s Top 10 Independent Brokerages report, and Misa Huynh is emblematic of a highly motivated and professional new generation of brokers the company is developing.

Although it’s only her first year as a broker, Huynh’s devotion to her clients is evident: “My drive is to make them happy and get them their dream homes. I work very hard for that, and I don’t think about the benefit for myself. It’s all about the clients.”

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EVENT PARTNER

ANZ BROKER OF THE YEAR – COMMERCIAL

FBAA BROKER OF THE YEAR – INDEPENDENT

IAN ROBINSON

SIMON ORBELL

ROBINSON SEWELL PARTNERS

SMARTMOVE

Broking’s spotlight rarely shines beyond the bright lights and high house prices of Australia’s capital cities, but it’s high time it did. Based in Wagga Wagga in western NSW, Robinson Sewell Partners has become an essential partner to farmers and small businesses across the nation, helping them negotiate better terms with the banks.

Operating in the bush is all about relationships, Ian Robinson says.

“We operate in the country, working with a lot of farmers, so there’s a lot of commitment and time involved in working with our clients.”

Simon Orbell has been attending the AMAs as a finalist for many years, but seemingly without luck. This year things finally went Orbell’s way, with a trophy that is a testament to a long record of hard work and broking excellence, as well as consistent appearances in MPA’s Top 100 Brokers report.

“For me, probably the biggest thing is consistency,” Orbell explains. “I have my customer at the heart of everything that I do. I’m really passionate and fortunate; I love what I do.”

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AUSTRALIAN MORTGAGE AWARDS WINNERS 2O17 CBA BROKER OF THE YEAR – PRODUCTIVITY

PEPPER MONEY BROKER OF THE YEAR – SPECIALIST LENDING

DANIEL O’BRIEN

IAN ROBINSON

PFS FINANCIAL SERVICES

ROBINSON SEWELL PARTNERS

EVENT PARTNER

ALI GROUP BROKER OF THE YEAR – INSURANCE (MORTGAGE PROTECTION & LIFE)

ROBERT TREWIN ROBERT TREWIN MORTGAGE BROKING

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Back to collect his second award of the night, Daniel O’Brien (pictured right) was in jovial spirits. “It’s like being the kid in the soccer team,” he says. “I’m the one who tries the hardest, not the best!”

The truth could not be more different: O’Brien received the award precisely because he writes very high numbers despite only having a small team around him. The two most senior staff members at PFS Financial Services have been at the brokerage for 11 and seven years respectively, and they allow O’Brien to focus on meeting clients and writing loans.

Ian Robinson’s second award came just after his first (for commercial lending), and both reflect the success of the diversified and expanding brokerage that he co-founded with Brad Sewell back in 2010. In addition to excellent relationships – what Robinson (pictured right) terms the “long game” – Robinson Sewell Partners has taken a number of innovative approaches to broking. It has an engagement fee, which effectively covers all expenses and creates a smoother deal flow that’s less dependent on commissions. The brokerage is currently taking on ‘corporate partners’ as it looks to expand further.

Beyond just writing loans, Robert Trewin (pictured right) prides himself on looking out for his clients, including making sure they’re covered. “I’ve always been a big believer in and supporter of insurance. That’s not just been for the past 14 months, but for the past 14 years.”

Trewin is no stranger to tragedy himself: after his 16-month son Cooper passed away, Trewin and his wife set up a charitable fund to support research into sudden unexplained death in childhood, and he runs regular fundraising events with brokers and bankers.

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AUSTRALIAN MORTGAGE AWARDS WINNERS 2O17

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AUSTRALIAN BDM OF THE YEAR

CBA AUSTRALIAN YOUNG GUN OF THE YEAR

JOHN KAKAKIOS

LEE WISNIEWSKI

ANZ

LOAN MARKET

Winning the premier BDM award of the night was, for Kakakios (pictured right), “totally an honour – I wasn’t expecting it at all! I wasn’t expecting the major bank BDM award to begin with. A great honour and testament to hard work. I really appreciate all our broker partners and the value they bring to our business.”

Kakakios’ award was recognition of hard work in an even harder year. Despite regulatory intervention ANZ had a good year in the broker channel, in large part thanks to Kakakios and his colleagues.

Lee Wisniewski (pictured right) is thrilled to have been named Australian Young Gun of the Year – if somewhat surprised.

“I’m rapt actually. I forgot there was even another award. I was happy enough to just be nominated, let alone win the last one, and this is amazing.”

Having only entered broking in 2015, Wisniewski has become a force to be reckoned with: he has now assisted over 2,000 clients in getting a loan, in addition to being an avid property investor who completed five deals by his 30th birthday.

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EVENT PARTNER

NAB AUSTRALIAN BROKERAGE OF THE YEAR

1ST STREET FINANCIAL

WESTPAC AUSTRALIAN BROKER OF THE YEAR

IAN ROBINSON ROBINSON SEWELL PARTNERS

1st Street Financial has been winning AMAs for almost a decade for good reason: its team of talented individuals of various ages and experience combine to form a mighty brokerage.

Winning the top award this year, however, was recognition of 1st Street’s evolution and expansion. 1st Street is taking on brokers with extensive experience in the banking world, such as Michael Vrastaminos (pictured right), who was previously director of ANZ Global Markets’ Wealth Sales division.

Taking home the final award of the night – and the biggest – was “absolutely incredible”, Ian Robinson says. “It was completely unexpected. Without a doubt it caught me by surprise. I’m very excited to share this with my teammates.”

Perhaps not so unexpectedly, Robinson had already collected two trophies, for commercial and specialist finance, in recognition of Robinson Sewell Partners’ excellent service and reputation. The big award reflected a brokerage that is bringing the best of broking to rural Australians and rural businesses that need these services the most.

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FEATURES

COMMERCIAL LENDING

Breaking down the barriers to commercial lending Extra training, forms and finding clients have deterred many brokers from writing commercial loans, but not for much longer, explains La Trobe Financial

BROKERS HAVE been writing commercial loans as long as they’ve been writing residential loans. Lenders increasingly see brokers as a vital distribution channel. Yet progress has been agonisingly slow. Around 2,400 mortgage brokers wrote a commercial loan in the six months to September 2016, according to the MFAA, out of a population of 15,400. Take-up ranges from 10% in some broker groups to 30% in others.

The main reason to diversify hasn’t changed, as La Trobe Financial vice president Cory Bannister explains. “The residential and commercial property markets can perform quite differently at the same point in an economic cycle, and therefore by ensuring you have deal flow you’re effectively insuring your business from any peaks and troughs.”

In fact brokers have more reasons now to write commercial loans as competition intensifies in residential lending. The MFAA also found that new entrants to broking are fast outpacing those leaving the industry, including in areas where the lending market is stagnant or declining. Franchise networks have been quick to react: ASX-listed Mortgage Choice, for example, has made

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diversification a core strategy for 2017/18.

Traditionally, many brokers have been deterred from writing commercial loans and have found it easier to refer these customers to other brokers or to lenders through a ‘spot and refer’ model. But this approach just doesn’t suit some brokers, Bannister says. “I know that

there are brokers reluctant to do that because, obviously, is their customer safe? Does that involve a good consumer outcome?”

Five barriers Bannister identifies five barriers to residential brokers writing commercial loans: training

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requirements, extra accreditation, paper lodgement, complex application forms, and lack of support from lenders. That’s even before you get to generating commercial leads.

As La Trobe looks to challenge the banks in commercial lending, Bannister is determined to break down these barriers.

La Trobe doesn’t require any extra training for brokers writing commercial loans, Bannister explains. “It’s not that we don’t offer training; we certainly do, and we have a credit-skilled sales team, as well as giving you access to our credit staff here, right through the process, who can train you on the spot.”

Other lenders are putting training online or providing it at professional development days.

Nor is extra accreditation necessary at La Trobe, Bannister adds. “If you’ve written a residential loan with La Trobe Financial you will be aware of the process for a commercial loan and can do so immediately.” This is possible because La Trobe uses the same application form for both residential and commercial loans.

When it comes to technology, commercial lending has lagged behind residential.

NextGen’s Apply Online and other platforms only began to accept electronic lodgement of small commercial loans last year. But the shift is gathering pace: AFG launched an SME loan platform in August, and the Podium CRM system of Plan Australia, Choice and FAST has been updated to assist commercial lending. La Trobe also allows commercial applications online or through aggregator software platforms.

Although many sub-$2m commercial property applications are very similar to residential loans, others are more complicated, and Bannister is conscious that some brokers need extra support. “It can often be a sink-orswim type approach, where you’re on your own and you’re expected to know the process all the way through,” he says. His solution is to make his credit team and senior staff available to advise brokers throughout the application process.

The clients you already have With lenders removing or substantially reducing the barriers to brokers writing commercial loans, the onus moves onto

property owners who may be looking to demolish large properties and replace them with several properties on the same block, using development finance. Bannister says

“If you’ve written a residential loan with La Trobe Financial, you will be aware of the process for a commercial loan and can do so immediately” Cory Bannister, La Trobe Financial brokers to find commercial clients. This can be done without spending a cent on marketing, because many of these clients are already in your database.

“The easiest way is generally to search around asset types, where you drill into your existing clients’ asset and liability position,” Bannister explains. He says brokers should be looking for “one, whether they hold commercial property; two, whether they’re self-employed, as if they are there may be an opportunity to purchase commercial property.”

Other potential clients include older

“changes to urban areas means this is becoming an in-demand product”.

Beyond your database, existing referral partners can help promote your new offering.

“Have a conversation or try find a partnership with an accountant or financial planner, who are often a really good referral source … once they learn your capability to address a client’s self-managed super fund, for instance, they can be a really strong lead-in,” Bannister says.

With the barriers pulled down and clients ready to go, it’s never been easier to add commercial lending to your business.

SIZE OF THE OPPORTUNITY La Trobe Financial surveyed viewers of MPA’s Commercial Finance webinar and found that even among this engaged group just a fraction of brokers had made commercial lending a large part of their business.

What percentage of your business is currently writing commercial property loans?

More than 30% 6% 69%

4%

21% Less than 10%

Between 20% and 30% Between 10% and 20%

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PEOPLE

BROKERAGE INSIGHT

KEYINVEST LENDING SERVICES Chris Burns, chief executive of far-reaching brokerage KeyInvest Lending Services, talks to MPA about growing the business further and why there are only exciting times ahead for the industry MPA: With a team of over 80 brokers, what has been integral to expanding the business nationally?

Chris Burns: Structure, planning, identifying deliverables and constant assessment and execution of our business plan have been paramount to our success. This also takes great investment and recruiting the right talent within your management team. We’ve been fortunate to have very low turnover of both staff and brokers, which assists in expanding the business. Our growth has come from two areas: organic and acquisitions. Both strategies have played an equally important role in our national growth, and we remain a purchaser of businesses across the country.

MPA: In which areas across your business have you seen the most growth and why?

CB: Recruitment was our largest growth area, with detailed strategic assessment of what the new-age broker looks like. We identified that our average age of broker was nearing 51 years in 2014, and for growth and sustainability we

“We identified that our real growth will come as a result of identifying new brokers to the industry aged between 23 and 45 with at least one degree” needed to completely change the way we conducted business. We identified that our real growth will come as a result of identifying new brokers to the industry aged between 23 and 45 with at least one degree. This has truly

ADELAIDE SNAPSHOT The latest QBE Australian Housing Outlook expects no major fall in house prices in Adelaide as the proportion of mortgage repayments on a median-priced house in the capital is approximately 21%, which is at the lower end of the range seen over the last two decades.

In 2017/18, the Housing Outlook expects median house prices to rise by 0.9%, after which rising surplus and slowing economic activity are expected to cause a 2.2% fall in prices. The median house price is predicted to hit $455,000 by June 2019.

Source: QBE Australian Housing Outlook 2016–2019

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paid dividends, and especially in the last 12 months we’ve seen these brokers writing above-average industry volumes. Our average age of brokers in 2017 is 39.6 years old, and we are confident that over the next 24 months

we will get that figure down to 36. Youth also brings in new energy and new ways of conducting business.

MPA: What are some of the challenges facing brokers in Adelaide, considering its housing market is quite flat relative to the east coast?

CB: The South Australian market has traditionally been one that doesn’t experience the sheer peaks and troughs of our east coast counterparts and therefore becomes quite an attractive and affordable place for home­ owners and investors alike. Brokers who have systems and procedures in place to be customer centric will come out miles in front

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regarding the industry’s advancement in the next few years?

CB: Consumer awareness and satisfaction [with] brokers is at an all-time high. I believe the regulators have done justice to the industry by bringing to the forefront all potential issues that can threaten our longevity. The next few years will see a steady rise in share of home lending and plenty of new start-ups in the digital disruption area looking for that pot of gold. Unfortunately, most of these to date have largely been lead generators rather than industry-piercing brokerages. You will see many of these start-ups fall over, but some will not only thrive but likely dominate certain areas of the market. Social media now plays a critical role in most brokers’ lives and will continue to dominate.

FAST FACTS Year founded 1998 Team 81 brokers and 9 staff Headquarters Norwood, SA Ownership Private

as the South Australian market is very much a relationship-based market.

MPA: What is KeyInvest’s point of difference compared to other brokerages?

CB: We have a great culture that we’ve built from day one. We treat each other like a member of our extended family. We don’t compete with each other; we embrace each

other, we celebrate each other’s success and we share knowledge and experiences. We have several support systems in place for our brokers and staff, which we will continue to enhance in the future. Our compliance focus is second to none, as is the training and development focus.

MPA: As a veteran of the mortgage industry, what are you most excited about

MPA: What are your top tips for brokers?

CB: Here are seven points to keep in mind: 1 Build and maintain systems and procedures.

2 Focus on training and development.

3 Be customer centric.

4 Don’t focus on price; focus on best customer

outcomes, which in most cases won’t equate to price alone.

5 Write plenty of notes on every loan – in an era of litigation, your compliance and corporate governance is paramount.

6 Place a net around your customer.

7 Be part of a team.

MPA: What are your plans for KeyInvest in the next 12 months?

CB: A focus on acquisitions, in particular brokerages situated on the eastern seaboard.

There needs to be more education on business exits in our industry, and we intend to develop a path to either retirement or exit.

We are also developing a new program titled ‘Future Stars’ for brokers who show longterm promise. This program will provide detailed education, training and marketing support to move them into the differing stages of broking life.

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PEOPLE

CAREER PATH

A TRUE TRAILBLAZER Finsure managing director John Kolenda has had a rich and varied career path that without doubt has grown and shaped the mortgage industry beyond measure Before his decade-long stint at Aussie, John Kolenda started out in real estate, spending over seven years with a property developer in acquisitions and financing. After joining Aussie as a broker, he was soon named Broker of the Year in 1995 and later turned his sights to management.

“After my first year with Aussie I was their number one broker, having written 348 loans in my first 12 months.”

1994

STARTING STRONG AT AUSSIE

1996

RISING UP THE RANKS Kolenda progressed through managerial roles at Aussie over the next few years, from regional sales manager to state manager, while looking after lending settlements and data entry divisions. He went on to become general manager of sales and distribution in his final four years, with responsibility for the sales performance of over 700 brokers. “[The early] years were tremendous learning experiences for senior management roles down the track.”

2004

START-UPS AND MERGERS Kolenda left Aussie in 2004 to jointly found broking business X-Inc, and the start-up rapidly grew to 250 brokers in its first two and a half years.

“We had a challenging start but soon found success because of our recruitment strategies,” he says. In 2007, X-Inc merged with Loan Market and Kolenda became executive sales director and ultimately executive director.

“The two groups coming together made us one of the largest independent mortgage brokers in the country.”

2008

GROWING THE BOOKS In his executive role at Loan Market, Kolenda oversaw the growth of the company as its monthly loan book surpassed $600m and its broker network increased to 600 brokers strong. But in 2009 he felt the time was right for a change and sold off his shareholding in the Loan Market Group that September. “While those were exciting times at Loan Market, I had other plans to pursue.”

2011

FOUNDING FINSURE Kolenda became co-founder and managing director of Finsure Group and the home loan brand 1300HomeLoan. He recalls that the early days were challenging in the growth phase but also incredibly rewarding as brokers were attracted to the appealing proposition of owning their own brand and being independent. “By late 2010 I had set out on a path to revolutionise the mortgage broker market in Australia.”

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S

2017

BECOMING AN INDUSTRY TITAN Six years down the track Finsure has grown into one of Australia’s largest mortgage broking and financial planning groups. It is now working with over 1,000 brokers and has a loan book in excess of $20bn. Finsure also acquired LoanKit in 2013 and launched a broker academy in 2016.

“You always look at the positives. Think big and stretch your limits and boundaries”

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bbx fp a

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PEOPLE

OTHER LIFE

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

FORZA AZZURRI! NSW broker Steve Kadry merges his finance skills with rugby as treasurer of the Federation Italian Rugby League Australia OUTSIDE OF being director of Delton Financial Group, Steve Kadry dedicates time to his passion for rugby league. For the past three years he’s been the treasurer of FIRLA, the Australian academy of the Federation Italian Rugby League in Italy.

FIRLA gives junior and senior Italian-Australian players opportunities to forward their rugby aspirations but is also involved in helping develop rugby league players in Italy. Some of its coaches go over to Italy to help local coaching programs and expand rugby league.

“I like connecting the two worlds,” Kadry says.

“I love connecting the actual Italians from Italy and fast-tracking their development with the Italianheritage/Italian-Australian rugby league players,” he says. “We’re just continually working hard at beefing up the competition in Italy and improving the game over there.”

Kadry himself played for Italy when he was 16.

“I love when we see one of our junior players eventually kick on and play NRL or get a professional contract,” he says.

1995

The year FIRLA was founded

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1–2x

4

No. of times a year FIRLA No. of FIRLA divisions: U16s, hosts players from Italy U18s, U20s, men’s squad

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