MPAMAGAZINE.COM.AU ISSUE 20.04
‘IT’S GAME ON’ Non-major banks talk about broker support, technology and keeping customers happy
PROPERTY INVESTORS The challenges and opportunities for brokers in this sector
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WOMEN IN BROKING The continued fight against gender inequality in broking
BACKING BROKERS How Pepper is looking after brokers during the COVID-19 pandemic
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APRIL 2020
CONNECT WITH US
CONTENTS
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Got a story or suggestion, or just want to find out some more information? twitter.com/MPA_Australia facebook.com/Mortgage ProfessionalAU
UPFRONT 02 Editorial
A worrisome time for all Australians
04 Statistics
Are older generations struggling more with debt?
06 Head to head
The importance of BDMs to brokers
08 News analysis FEATURES
PROPERTY INVESTORS
This segment of the market has been “a rollercoaster”
Support for Australians during COVID-19
10 Opinion
How fintech can help brokers
FEATURES
SPECIAL REPORT
38 Asset finance
Five of the non-major banks gathered for a livestreamed MPA roundtable to discuss key topics in the broking industry
40 Productivity
Liberty talks about bridging the gap for small businesses
NON-MAJOR BANKS PANEL
BIG INTERVIEW
WILLIAM LOCKETT
The managing director of Specialist Finance Group talks about his focus on supporting brokers
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How to make emails less distracting
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FEATURES
WOMEN IN BROKING
The proportion of female brokers remains below a third
36 FEATURES
BROKER SUPPORT
Pepper explains how it's working with brokers during the pandemic
42 Marketing
Marketing your business like a rock star
PEOPLE 46 Brokerage insight
MPA chats to Home Loan Experts
48 Other life
The lady who lunches
MPAMAGAZINE.COM.AU NOW ONLINE: Our daily newsletter. Keep on top of property market trends, business strategy, and what industry leaders have to say.
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7/04/2020 9:56:03 AM
UPFRONT
EDITOR’S LETTER www.mpamagazine.com.au APRIL 2020
A confusing time for all
I
write this letter in isolation at home, during very confusing times for the whole world, and I’m wondering if it will even be relevant by the time the magazine hits desks. Things have been changing so rapidly, it’s hard to know where we will be in a couple of weeks’ time. But, at the moment, it looks like the current state of play will continue for a matter of months. At this time, my thoughts are with those people who are genuinely facing fear over how they will get through the period ahead, whether because they are self-employed and their businesses are struggling, or their employers are cutting back staff, or for any number of other reasons why this pandemic could affect their financial stability and the way they live their lives. It’s during these months, as people look for help, that brokers can really step up to the plate and support business owners and mortgage borrowers. As the pace of change is so fast, it’s difficult to keep up. These people will really benefit from turning to a broker who has access to up-to-date information and can help get them through this period.
It’s during these months, as people look for help, that brokers can really step up to the plate If you haven’t yet seriously considered diversifying into commercial lending, now might be the time. Not simply for the benefit of your own business, but because the people of Australia need your help. Turning to this month’s magazine, our News Analysis covers some of the announcements and commentary in the current market, although I fully expect some of this to have changed by the time it is read. But bear with me and keep checking the MPA website for the latest information. This issue also provides coverage of the recent livestreamed Non-major Banks Roundtable. Demonstrating the speed at which the pandemic has spread, this was held at a time when it felt too early to talk about the virus, but just a week later we would have probably called the event off. I hope the content of the magazine is still helpful to you, and that you’re enjoying reading it at a safe distance from others! Please keep safe, everyone – we’ll get through this together. Rebecca Pike, editor, MPA
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EDITORIAL
SALES & MARKETING
Editor Rebecca Pike
National Sales Manager Claire Tan
Journalist Tom Goodwin
Global Head of Communications Adrijana Monevska
Contributors Melissa Christy, Donna McGeorge, Nicola Moras
CORPORATE
Production Editor Roslyn Meredith
Chief Executive Officer Mike Shipley
ART & PRODUCTION
Chief Operating Officer George Walmsley
Designer Cess Rodriguez Traffic Coordinator Kristine Jamir
Managing Director Justin Kennedy Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil
EDITORIAL ENQUIRIES
tel: +612 8437 4784 rebecca.pike@keymedia.com
SUBSCRIPTION ENQUIRIES
tel: +61 2 8311 5831 • fax: +61 2 8437 4753 subscriptions@keymedia.com.au
ADVERTISING ENQUIRIES claire.tan@keymedia.com
Key Media Regional head office Level 10, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 • fax: +61 2 9439 4599 www.keymedia.com Offices in Sydney, Auckland, Denver, London, Toronto, Manila, Singapore, Seoul
Mortgage Professional Australia is part of an international family of B2B publications and websites for the mortgage industry CANADIAN MORTGAGE PROFESSIONAL neil.sharma@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.
www.mpamagazine.com.au
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7/04/2020 11:12:47 AM
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7/04/2020 12:13:34 PM
UPFRONT
STATISTICS WHO IS BORROWING?
Snapshot of homeowners
While three in five home loans are jointly held by a male and female, 21% are held by single males and 16% by single females. Only 3% are held by same-sex couples, and among millennials there is a much higher rate of same-sex couples with mortgages. Interestingly, 27% of all mortgages in the over-70s group are held by single males.
While millennials are often seen as having high debt, a new report shows older generations have it worse IN RESEARCH that analysed the mortgage records of almost five million Australians, those in their 30s and 40s were shown to have the highest average home loan values in the country, at $405,000 and $380,000 respectively. As one of the country’s largest credit bureaus, illion maintains banking and mortgage records on around 80% of Australians. Its Mortgage Nation: The Great Australian Debt report provides a snapshot of the people behind Australia’s six million home loans, which have racked up $2.1trn in debt. Painting some other interesting pictures,
3 in 5
the report shows that almost 40% of mortgages are now taken out by single borrowers, with Sydney having the highest rates of single female homeownership, as well as of arrears. “Although interest rates are falling to 40-year lows, $20.4 billion of home loans are currently in arrears ... On the positive side, almost 20% of all new homes in the last two years have been taken out by those under the age of 30, suggesting first home buyers have come surging back into the market following almost two years of a decrease in property prices,” illion CEO Simon Blight said.
30%
37%
home loans are jointly owned by a male and female
of Australians own a home with no mortgage
of Australians own a home with a mortgage
80%
of home loans are held by borrowers aged 31–60
Source: illion’s Mortgage Nation: The Great Australian Debt, February 2020
DEBT RISES TO AGE 50
YOUNGER GENERATION MORE RELIABLE
Market share of all home loans
Delinquency risk
The Aussie mortgage market is dominated by borrowers aged between 31 and 60, who hold more than an 80% share of home loans, with the highest share held at age 46–50.
Only 0.9% of those aged under 30 are more than 30 days late in loan repayments, but there’s a spike in arrears in the 31–50 age group.
15.0%
1.40%
12.5%
1.20%
All loans
Interest-only
1.00%
10.0%
0.80%
7.5%
0.60% 5.0%
0.40%
2.5%
0.20% 0.0%
0.0% Under 30
31–35
36–40
41–45
46–50
51–55
56–60
61–65
66–70
71+
Source: illion’s Mortgage Nation: The Great Australian Debt, February 2020
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Under 30
31–35
36–40
41–45
46–50
51–55
56–60
61–65
66–70
71+
Source: illion’s Mortgage Nation: The Great Australian Debt, February 2020
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National NSW 04-05_Statistics_SUBBED.indd 4
83%
84%
VIC
88%
QLD
80%
SA
75%
WA
82%
TAS
77%
ACT
83%
NT
77%
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BREAKDOWN OF BORROWERS
16%
36% By number and gender
By number of borrowers
60%
64%
Single borrower
Multi-borrower
21% 1% 2%
1 borrower female 1 borrower/male Multi-borrower/female Multi-borrower/male Multi-borrower/multi-gender
Source: illion’s Mortgage Nation: The Great Australian Debt, February 2020
WA TOPS MARKET FOR HOME LOANS
OLDER AGE GROUPS PAYING DOWN DEBT
Proportion of home loans by state/territory
Total home loan debt per age group
Made up of eight states and territories, Australia has multiple housing markets. According to the report, WA boasts the highest proportion of mortgages anywhere in the country.
Those aged 30–50 are currently enduring the ‘peak debt burden’, possibly as they trade up from units to homes, but mortgage levels drop as homeowners age.
$647.7 NT
29%
Qld
29%
WA
$647.2
$600bn
$454.6
$500bn $400bn
39%
NSW
30% ACT
31%
SA
32% Tas
34%
Vic
32% Source: illion’s Mortgage Nation: The Great Australian Debt, February 2020
$300bn $200bn
$204.8
$158.0
$100bn
$30.1
$0bn Under 30
31–40
41–50
51–60
61–70
71+
Source: illion’s Mortgage Nation: The Great Australian Debt, February 2020
www.mpamagazine.com.au
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UPFRONT
HEAD TO HEAD
How important is a good BDM to your business? Brokers rely on BDMs for good relationships, understanding credit policies, and lender support
John Kennedy
Quentin Grofski
Principal Mortgage Choice
“A good, proactive BDM is crucial for a good relationship with any lender. While it’s great for a BDM to be able to clarify and assist with policy, process and pricing, the exceptional BDMs are those that will ‘take the fight’ to Credit on deals, and those that get involved and can get deals looked at, fixed and escalated when needed. Too many will just say the request has been ‘escalated’ or ‘noted’, but the good ones make sure things get done, and appreciate the deadlines. If a deal can go to either Lender A or Lender B, and the pricing, turnaround time, etc., is similar, then it is often the quality of the BDM that determines where it does go.”
Franchisee Aussie Morley
“BDMs are experts in the credit policies of each product. They generally know how certain aspects of the deal will be viewed by the credit team. This is really important for my business when assisting customers who may not fit 100% of the lender’s credit policy. The BDM will have seen similar scenarios and will be able to provide a level of comfort on how the application will be assessed. In addition, they can provide an indication of the potential to discount rates and fees, which enables me to manage customer expectations upfront. They can also act as the conduit between the assessment team, if issues arise, all of which supports me in providing exceptional service to my customers.”
Amy Small
Finance broker Professional Lending Solutions “A BDM can be important to many aspects of running a business. A broker represents their clients’ best interests and in an application process may need to present an argument to convince the lender for an approval. A BDM can provide lender insight, niche interest and support within that lender so you can get that approval through. It is like having someone on the inside but on your side. I have many wonderful BDMs who make the loan process easy and manageable so that the client has a great experience as well. A BDM also provides lender education, as policies change so rapidly and keeping on top of 40 different lenders can be tough. A good BDM is a reliable contact when a policy needs to be checked and/or clarified. I don’t know what I would do without a good BDM.”
A PARTNERSHIP THAT WORKS Taking home the gold medal for BDM support in this year’s Brokers on Banks survey was Macquarie, after jumping from seventh place the year before. Ben Parham, Macquarie’s head of personal banking, said, “We know ongoing support is one of the most important things when it comes to brokers running their business, so we’ve invested heavily in our BDM team to make sure our broker partners are getting world-class service as well as the support they need every time we work together. We talk about partnering with brokers, because that’s how we see it – it’s a partnership. That means working together, listening, and understanding each other – all with a view to securing the best possible outcomes for clients.”
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We’re here with real life help Supporting people through hard times with humility, a sense of optimism and without judgment is what we are focused on at Pepper Money. We understand that your customers need clear guidance during this unprecedented time of both financial and health strain. To ensure they get the help needed, we have a simple, online Financial Assistance form to make reaching out for help easier, available at pepper.com.au/apply-for-assistance
pepper.com.au/coronavirus The Real Life Alternative Disclaimer: All applications are subject to Pepper’s normal credit assessment and loan suitability criteria. Terms, conditions, fees and charges apply.Pepper Group Pty Ltd ACN 094 317 665 Australian Credit Licence Number 286655 is the servicer of loans by Pepper Finance Corporation Limited ACN 094 317 647
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7/04/2020 8:43:57 AM
UPFRONT
NEWS ANALYSIS
The fight against COVID-19 With the new coronavirus pandemic sweeping the globe, the RBA and the government have been putting measures in place to support continued lending and ready the economy for a tough year IN A rare move, the Reserve Bank of Australia made the decision in mid-March to cut the interest rate to an incredibly low 0.25% as the COVID-19 outbreak continues to put a stop to normal life in Australia and across the world. In his statement, RBA Governor Philip Lowe said that while the virus was “first and foremost a public health issue”, it was also having a real impact on the economy and the financial system. Border restrictions, the cancellation of hundreds of events, business closures and people in self-isolation are having a detrimental effect on businesses. According to the Prime Minister and other government officials and experts, these measures may last for the next six months. Lowe said that while the country waited for the virus to be contained and the economy to recover, the priority for the RBA was to “support jobs, incomes and businesses so that when the health crisis recedes, the country is well placed to recover strongly”.
Measures to support the economy The RBA has also announced that it will begin quantitative easing and launch a $90bn funding facility for banks, with particular support for those helping SMEs. With over two million SMEs in Australia, accounting for 97% of all businesses, if they
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suffer, the economy suffers. According to Roy Morgan’s research in March, more than 60% of businesses reported being affected by COVID-19, up 45% from the month before. The RBA’s move complements an investment announced by the Morrison government of up to $15bn to enable smaller lenders to keep supporting SMEs. It also relaxed responsible lending obligations for certain circumstances to ensure small businesses could access credit quickly. Treasurer Josh Frydenberg called small lenders “critical to Australia’s lending markets”.
ness owners need right now. Our government has stepped up and provided that fast response, and we stand ready to do the same. These measures will also have a direct and tangible effect on Australian jobs and the economy. By maximising their cash flow, small businesses like the ones we serve can continue to pay their staff and suppliers and, crucially, keep their
“Our government has stepped up and provided that fast response, and we stand ready to do the same” Greg Moshal, Prospa The government initiative was praised by smaller lenders, who are keen to continue helping the SME market across Australia as the coronavirus has a significant impact. Greg Moshal, CEO of Prospa, said the SME lender welcomed the news. “As innovators, we are well placed to distribute government funding quickly without any long application processes or excess documentation,” he said. “A fast response is exactly what small busi-
businesses and the economy running.” The CEO of HashChing – an online market place that connects business borrowers to brokers – said it was critical that measures were in place to support the “vital” SME sector during these difficult times, but questioned whether it was enough. “This much-needed financial support will definitely help in the short term and be an immediate sugar hit,” Arun Maharaj said.
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SUPPORT AVAILABLE FROM LENDERS For consumers • • • •
Interest-only repayments Extending length of loan to reduce repayments Postpone or defer payments Agree to an alternative arrangement, or change the terms of the loan • Allow time to sell the property • Provide information on bankruptcy For small businesses • A deferral of scheduled loan repayments • Waiving fees and charges • Interest-free periods or no interest rate increases • Debt consolidation to help make repayments more manageable *Information accurate at time of publication Source: Australian Banking Association
“Injecting this funding specifically to smaller lenders will help them to stay nimble and further support their ability to be quick and efficient at getting out the necessary loans to SMEs. SMEs desperately need quicker access to funds, which is what the smaller lenders are able to provide. The question is, will the funding go far enough? I think the
customer take-up, could put as much as $8bn back into the pockets of these businesses. “This pandemic has begun to have serious impacts across the economy, with small businesses beginning to feel the devastating effects,” Bligh said. “Small businesses are the most vulnerable part of the economy and have the most urgent need for assistance. Small
“Small businesses are the most vulnerable part of the economy and have the most urgent need for assistance” Anna Bligh, ABA government needs to go further and consider tax relief, such as extensions of time to lodge and pay tax obligations.” The Australian Banking Association has also announced a small business relief package that will see banks defer loan repayments for six months for small businesses that need help due to COVID-19. ABA CEO Anna Bligh said it would apply to more than $100bn in existing small business loans and, depending on
businesses employ five million Australians, and this package is designed to help them keep doing just that. Small businesses can rest assured that if they need help, they will get it.”
‘Lighthouse in the storm’ As banks and lenders offer different rates and options, brokers may find more borrowers coming to them for assistance. Loan Market executive chairman Sam White said clients
were looking for a “lighthouse in the storm” during these unsettled times. “After the health of family and friends, finances are the top priority for clients at the moment – from first home buyers to seasoned investors, and mum and dad mortgage holders to business operators,” White said. The property market is expected to take a big hit this year, which in turn will affect broker businesses. FBAA managing director Peter White said brokers must be prepared for the pandemic to affect them “on a number of fronts”. Not only must brokers ensure they have the technology and knowledge to be able to transition to an online model, but they must prepare for an increase in clients who are struggling due to job losses and business closures. “We must be ready to guide our clients to lenders who can help them in their time of financial hardship, therefore it is vital we know what each lender is offering in terms of support,” White said, adding that it was not just existing clients that brokers should be prepared to help. “New home buyers and investors will emerge to take advantage of a weaker market, and we must be able to deal with this at the same time. Most brokers will need this new business for their own viability,” he said.
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UPFRONT
TECHNOLOGY
A digital home loan journey Neobanks have been the talk of the banking industry in the last 12 months. So, how can a neobank help you and your clients? Melissa Christy, lending product lead at 86 400, shares the story of the smartbank’s journey to creating the first digital home loan for brokers
86 400 is Australia’s first smartbank, here to help Australian’s take control of their money. We use smart technologies to strip the waste out of banking and give back to our customers. In July 2019 we were granted a full banking licence. By September we launched our Pay and Save accounts, and two months after that the first and only digital home loan for brokers. Developing the 86 400 home loan solution from scratch was achieved within 21 months. This included choosing the vendor partners – several tech firms in the mortgage industry – who were instrumental to developing our digital home loan. The main thing we focused on was to address key broker pain points. We wanted to create a better experience for both brokers and their clients. Specifically, we focused on: • reducing the time to get a decision • reducing the amount of paperwork required to be submitted with the application To achieve this, we looked at how much of the information that is collected in the mortgage application process today could be collected and verified upfront digitally so that we didn’t need to collect paperwork or PDFs from customers. We partnered with Simpology to help make this a reality. This reduction in
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paperwork helps decrease the assessment time when the loan is submitted. The 86 400 home loan solution includes: • Electronic identification. This is conducted in Loanapp and you get an instant response. • Verification of identity (VOI). This is initiated from Loanapp and completed on a client’s mobile phone.
No additional documents are required for a refinance. In addition to this, the application form and all the 86 400 documents are issued and signed electronically, meaning your clients can do this in the convenience of their own home. The 86 400 home loan solution has been designed to avoid the need for brokers to meet with their clients face-to-face. We have partnered with MaxID for our VOI solution. This solution doesn’t require the broker to see the applicant face-to-face, and the applicant doesn’t need to go to a branch, post office or meet with a Toll driver. The solution is mobile-based. Joint applicants can identify each other using their own mobile devices. Single applicants can be identified face-to-face by a friend, relative, neighbour or work colleague. To date, brokers have been impressed with the fast turnaround times and the service that the 86 400 team provide. Rohan Wood from O2 Finance has submitted seven applications to 86 400 already and had all pre-approved or unconditionally approved. He says, “The 86 400 process is different to any other application process. I've found that I can capture everything required in a single meeting with a client. Each applicant has
“The 86 400 process is different to any other application process. I’ve found that I can capture everything required in a single meeting with a client” • Smart statements. Income and expenses are collected, categorised and verified upfront in Loanapp before the application is submitted. Clients and brokers can comment on the data scraped to assist the 86 400 lending team when it reaches assessment. • Rental AVM. Verification of rental income for a new investment property can also be done via a rental AVM. All of this means that the only document we require is a contract of sale for a purchase.
been extremely happy with the process and outcome, especially the speed of the approvals and the flexible approach. Ultimately, the home loan process with 86 400 is simple, fast, flexible and cost-effective for me and my clients.”
Melissa Christy is the lending product lead at smartbank 86 400.
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7/04/2020 12:49:03 PM
17_SGS
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Home Loans are provided by Suncorp-Metway Ltd Australian Credit Licence 229882 (“Suncorp Bank”), to approved applicants only. Please read the relevant Information Documents before making a decision regarding any Suncorp Bank products. ^The $2,000 cash bonus (the “Cash Bonus”) is applicable when you are approved for and settle an Eligible Home Loan with Suncorp Bank. An Eligible Home Loan is a home loan that is: (1) applied for between 2 September – 30 April 2020, settle by 29 July 2020, unless withdrawn sooner; (2) a loan amount of at least $250,000 in new to bank lending with a Loan to Value Ratio of 90% or less; (3) Purchase or Refinance, for Owner Occupied or Investment purposes; (4) a Standard Variable or 1, 2, 3 or 5 Year Fixed Rate loan in the Home Package Plus; (5) Back to Basics & Line of Credit / Access Equity is excluded, except when application is split with another eligible loan product of at least $250,000; (6) not established in the name of a company, business or trust. Refinancing of an existing Suncorp Bank home loan or pre-approvals are ineligible for the Cash Bonus. A limit of one (1) payment of $2,000 will be made to a borrower and if there is more than one borrower, one (1) payment will be made to them jointly. Each borrower, whether individually or jointly, can only ever receive a payment of $2,000 once. If any of the borrowers have received a payment whether individually or jointly under the Cash Bonus previously then no further payments will be made. The $2,000 cash payment will be credited to the linked Everyday Options account which forms part of the Home Package Plus, within 30 days of the settlement date. Suncorp Bank reserves the right to vary or withdraw the Cash Bonus at any time. Applications subject to credit approval. Fees, and charges may be applicable. Full terms and conditions will be included in our loan offer. Depending on your financial circumstances, you should obtain independent advice before making any decisions regarding the Cash Bonus.
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7/04/2020 8:54:50 AM 1/4/20 2:52 pm
PEOPLE
BIG INTERVIEW
WILLIAM LOCKETT: HERE FOR YOU With many Australians’ financial security suffering as a result of the COVID-19 pandemic, Specialist Finance Group’s Will Lockett urges all brokers to ensure they look after their own wellbeing as well as their customers’
AS THE world faces a global pandemic, every industry and every person is being affected either directly or indirectly. Businesses are closing their doors, employees are facing job losses or pay cuts, and most people are being encouraged to stay at home. With these changes come concerns over the future of businesses; about job stability and whether people will be able to survive financially. Mortgage brokers will find that many of their clients are facing challenges in most of these areas, and it’s important for them to understand how they can help these clients. While all brokers have their clients’ needs and requirements as their priority, it is the priority of Specialist Finance Group to ensure that it provides all of its finance brokers with the very best support, care and understanding during this difficult time for everyone. Being privately owned, Specialist Finance Group is working closely with all its members and business partners to give them the support they need over the next six to 12 months.
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Managing director William Lockett is encouraging brokers to not only look after their own wellbeing but also to remain close to their client base, who will be facing great
that they and their families are all well. “Our assistance starts with them as individuals and being part of our team,” he says. “Then we talk about their individual
“Look after your wellbeing first and then you are able to help others, and that starts with your family, your friends and then your business model” uncertainty, and to provide them with an extra layer of support and assistance.
A personal touch One of Lockett’s primary concerns at this time is to maintain his close relationship with all SFG members and business partners. He has been contacting his members and starting each conversation with the individual broker on a personal level, to ensure first and foremost
business model and ensure they know they have all the assistance they require to navigate the challenging business environment.” “Look after your wellbeing first and then you are able to help others, and that starts with your family, your friends and then your business model,” he says. Brokers may also find that over the next six to 12 months they will struggle with their own finances and cash flow. Lockett says he talks to
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PROFILE Name: William Lockett Company: Specialist Finance Group Title: Managing director Years in the industry: 35 How is SFG well placed to help brokers during the pandemic? “We are a private and independent company, so all my members have direct access to my management team and myself. The relationship and our empathy for what our industry is going through could not be more direct and understood.”
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7/04/2020 8:57:17 AM
PEOPLE
BIG INTERVIEW
his brokers about whether they can support themselves and their families during this uncertain time, and to find out what he can do to assist, whether through financial support or with strategies to respond to the current changing business landscape. “Most, if not all, brokers are remunerated by commission only, therefore even at the best of times their job is both an emotional and financial rollercoaster,” he says.
“Technology also allows brokers to understand and identify where possible opportunities may exist within their business model and database, and it’s crucial that brokers identify these business opportunities within their model that will ensure that it continues to survive and evolve.” While many brokers have been adopting technology for a long time, there are those who have been hesitant to use it within their
“The use of technology ensures that brokers are keeping close to their clients during these challenging times” “With this changing landscape we also help them with their individual business model to ensure they have the goals, strategies and structure in place to achieve the best efficiencies and results from and within their business model.”
Helping brokers help their clients As an aggregator as well as a business partner, SFG is assisting brokers on an ongoing basis to ensure they are up to date with all the many changes that are occurring within the industry. This includes the use of technology in their businesses, which is particularly important now that people are being advised to isolate, minimising any direct and physical contact with others. Technology is providing the perfect platform for brokers to be able to continue dealing with customers remotely, for example through video conferencing, Skype, Zoom or Facetime. Technology also allows for both client and business partner portals, including providing the option of digital and electronic signatures. “The use of technology ensures that brokers are keeping close to their clients, and during these challenging times they are sympathetic and understanding of their client’s unique circumstances,” Lockett says.
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business, but Lockett is seeing that change. “Some old-school brokers still like to use pen and paper and see their clients face-toface; however, in the changing landscape in the use of technology, they are now seeing the great benefits and efficiencies of using technology within their business.” SFG has a strong focus on mentorship, and Lockett says this has never been more important, particularly for those new-toindustry brokers who have not built up their client base, relationships or trail commission. “Everyone either needs or would like mentoring in life, whether that is on a business or personal level,” he says. “We’ve talked about the requirement for technology in our business; we mentioned understanding the need to stay close to your clients and understand exactly where they are in their financial situation; being able to help your clients and assisting them wherever possible; and also navigating a way forward for your own model, identifying those opportunities,” Lockett explains. “For any industry broker who is relying on a mentor and their relationship, now moving forward this will never be more important; it will never be more crucial and it will be required now more so than ever.”
ABOUT SPECIALIST FINANCE GROUP Established in 1991, Specialist Finance Group is a privately owned and operated national aggregator. The multi-award-winning company operates from its head office in Perth and has offices in Sydney, Melbourne, Singapore, Hong Kong and Dubai. Managing director William Lockett has more than 30 years’ experience in the finance broking space and is actively involved in running the day-to-day operations of the company on both a national and international level. Believing in flexibility, SFG offers various agreements to suit each broker’s individual business models: Monthly fee agreements: A flat monthly fee so you receive 100% of your commission Annual fee agreements: A discounted annual rate; you still receive 100% of your commission Percentage agreements: A percentage per deal to minimise your overhead costs Transaction agreements: A minimal fee per transaction, if you are unsure of what your sales volume will be
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SPECIAL REPORT
NON-MAJOR BANKS ROUNDTABLE 2020
2020
NON-MAJOR BANKS ROUNDTABLE There may not be a royal commission going on, but there was still plenty to talk about at this year’s livestreamed roundtable with five of the non-major banks. Read on to get their perspectives on topics such as channel conflict, first home buyers and supporting regional brokers
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THIS YEAR’S Non-Major Banks Roundtable took place in early March, just a little while before the coronavirus pandemic swept the nation. So, while the event managed to go ahead, there was no discussion of the pandemic. The non-majors were still able to fill the hour with a discussion of other important industry issues, however. They were asked for their responses to some of the results of MPA’s recent Brokers on Banks survey, including those related to technology, communications and channel conflict, as well as for their views on topical subjects like the first home buyer market and the rise in popularity of non-major banks. Brokers watching the livestream were encouraged to send in questions, and the non-majors managed to get through several of these. Topics brokers wanted answers on included the best interests duty, support for regional brokers, open banking, and credit policy. The banks’ responses to these questions can be found in the boxouts on the following pages. Five non-major bank representatives took part in this year’s livestream: Glenn Gibson, head of third party distribution and direct
mortgages at ING; Glenn Haslam, executive general manager of lending at Suncorp; Ian Rakhit, general manager third party at Bankwest; Matt Wood, head of mortgage distribution at Citi; and Natasha Kelso, head of broker at Bank of Queensland. It was interesting to hear the different approaches of the banks in their responses to the questions. While Bank of Queensland and Suncorp were more regional in focus, Matt Wood demonstrated where his bank fell when he used the slogan ‘Citi by name, city by nature’. As is usually the case with the non-majors, there was little in the way of competitiveness or secrecy; these banks often enjoy coming together to share insights and communicate their support for the broker industry. The report that follows provides an overview of the discussion between the five banks, but if you would like to watch the interview in full, you can do so at www.mpamagazine.com.au. MPA will be also be holding a virtual roundtable event with aggregators in the coming months, so watch out for that report in an upcoming issue of the magazine.
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SPECIAL REPORT
NON-MAJOR BANKS ROUNDTABLE 2020 THE PANELLISTS
Glenn Gibson Head of third party distribution and direct mortgages, ING
Glenn Haslam Executive general manager of lending, Suncorp
In our recent Brokers on Banks survey, more than 80% of respondents said channel conflict was either a minor problem or a major problem. For those of you with branches, how do you address channel conflict? The Brokers on Banks survey, which MPA conducts every year, took place between 13 January and 7 February 2020 and included some questions that are asked each year to determine the changing attitudes and concerns of brokers. One of these questions was on the problem of channel conflict, where brokers feel there is a conflict between the third party channel and the direct-tobank channel. In this year’s survey, just over 32% of brokers said channel conflict was a major problem, 50% said it was a minor problem,
Natasha Kelso Head of broker, Bank of Queensland
Ian Rakhit General manager third party, Bankwest
and a little over 17% said it was not a problem. While these figures show it is less of a problem than in the previous two years, more than 80% are clearly still affected by it. When the non-major banks at MPA’s roundtable were asked about this issue, Bankwest’s general manager of third party, Ian Rakhit, said he could not remember the last time he had heard anything about channel conflict at the bank. He thought there were a couple of reasons for that, one being that Bankwest was very proactive in its broker strategy. “We actually wrote within our strategic roles: to be the best broker bank in Australia,” he said. “So, whether you’re dealing with brokers directly or you’re a support team dealing with those teams dealing directly with brokers, it’s very clear that the clientbroker relationship is paramount.
Matt Wood Head of mortgage distribution, Citi
“It’s a message that goes through the bank often – to say brokers introduce a significant number of customers to Bankwest and we must respect that relationship.” Echoing the importance of getting this message about the value of brokers to employees, Glenn Haslam, Suncorp’s executive general manager of lending, said 68% of the bank’s flow came from brokers, and its teams knew how important that was. He added that local relationships were key, and the bank connected its brokers with the local branches. While he hadn’t heard about channel conflict at Suncorp, he said he’d heard about it elsewhere. “One of the things we do talk about a lot at Suncorp is respecting the relationship, but also educating our people on why a customer goes to a broker,” he said. “They go to a broker for advocacy, and they go to a broker
BROKER QUESTION Given the extensively regulated environment brokers operate in, and that they will now have a legislated best interests duty, and given that clawback was originally introduced to prevent unethical churning by brokers, what is your opinion on clawback still being in place, considering that brokers are now prevented from recouping clawback from customers?
Q
Gibson: “It comes down to the economics of the loan. There are costs of putting a loan on a lender’s book, and there’s a cost of a broker acquiring the business, so I understand both sides. If you look at all the incentives that are happening in the marketplace at the moment, there’s a big risk of customer churn as opposed to broker churn, and there’s a big risk of brokers losing their income completely if that happens. It’s not something we want to change at the moment, but, saying that, it’s something we continually review.” Wood: “It’s always on the table to look at, and we look at what the market’s doing. We don’t want to win business on the basis of what we’re doing on a commission perspective, but we like to be aligned with what’s happening in the market and take all those factors into consideration – the economics of it – as our partners do themselves.”
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for choice, and we need to respect that.” For Natasha Kelso, head of broker at Bank of Queensland, it was also about respecting the customer’s choice. While she added that the bank was “a bit unique” for having ownermanagers, it looked at ways to partner with brokers in the area and ensure their customers had a great experience – and not just at the start of the loan. “We’ve given our brokers full access to our customer call centre, so if they’ve set the loan with us, they can call up any time after that’s settled and access the loan information so they can make sure they’re servicing that customer for the life of the loan,” Kelso said.
Something else that came out of the Brokers on Banks survey was that product diversification opportunities are increasingly important. In fact, it was voted the second most important priority for brokers. How are you offering to help in this area? The product diversification opportunities category has always been somewhere near the bottom in terms of importance to brokers, according to MPA’s previous surveys. However, this year it received the second highest score when we asked them to rate nine different categories between 1 and 5. ING’s head of third party distribution and direct mortgages, Glenn Gibson, said the bank was looking at diversification opportunities that fit together naturally, such as residential, commercial and small business. The non-major provides an education program on not only what ING offers but also how brokers can get into different lending areas and diversify their businesses. “It really comes down to the flows coming back, from a broker’s perspective, from their clients,” he said. “They want to be able to service as many clients as they can, whether that be for personal loans, or for commercial or residential, so we support them through commercial and residential.” Looking at it from a different angle, Citi
MARKET SHARE: NON-MAJOR VS MAJOR BANKS
60 59.57%
59.49%
58.05%
55.98%
50 44.02% 40
40.43%
41.95%
Sept 18
Dec 18
401
30 Mar 19
Major banks (including subsidiaries)
Jun 19
Non-major banks Source: Source: AFG Index, Q4 2019
has differentiated itself by opening up its wealth offering to mortgage brokers. The bank’s head of mortgage distribution, Matt Wood, said there were opportunities that came from being a global bank, such as access to worldwide bonds, which they could make available through certain brokers to the right clients. He added, “Citi only does residential mortgages, so we’re quite keen to develop our relationships and add something through
While none of you were involved in the First Home Loan Deposit Scheme, how are you working with first home buyers and the brokers who are working with them? At the start of 2020, the government launched the First Home Loan Deposit Scheme, which was set up to help struggling first home buyers get into the housing market. Ten thousand places were released in January for the scheme, which offered a guarantee that first home
“We love getting out and speaking to brokers, listening to brokers and hearing what they’re saying, because the communication coming back ... is fantastic” Glenn Gibson, ING our wealth offering, and we’re using the BDMs and wealth relationship managers to partner up and work together. “It’s been quite successful to start with. It’s just evolving continually, but it’s something that’s making us a little bit different to our competitors in the marketplace.”
buyers could purchase a home with as little as 5% deposit. Two of the four major banks were involved in the scheme, alongside 25 other second-tier and regional lenders. None of the banks on the panel were involved in the scheme, but that didn’t mean there wasn’t a focus on this crucial segment of the market.
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SPECIAL REPORT
NON-MAJOR BANKS ROUNDTABLE 2020 Rakhit said Bankwest continued to be strong in this area, lending up to 98% of the value of the property and adjusting its policy for renters’ genuine savings to allow for private landlords. “It continues to be a good sector for us; it continues to be the one we feel we can differentiate in and we feel we can do very well in,” Rakhit said. “So we watch it; we ensure we’ve got the right products to meet those outcomes, and we’ll continue to focus on it.” With more of a focus on Queensland, Haslam said first home buyers were incredibly important to Suncorp. But he said it was not just about giving them a loan; it was also about helping customers get into those first homes. “We’re very committed to that. We would have loved to have been part of the scheme; that would have been great, and we’ll continue to pursue that,” Haslam said. The bank has introduced new products like its Deposit Kickstart offer, which he said he would love to see customers using more. This product allows owner-occupiers to use the equity in the home of a family member towards the purchase of their home.
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“We think we have some fantastic products, and that’s one we’d love to see brokers using a little bit more, because of what it actually does for customers. But first home buyers are an absolute priority for us,” Haslam said.
A recent report showed that customers are happier with the non-majors than the majors – why do you think that is? A survey released by Roy Morgan in January showed that customers are much happier with the mortgage experience provided by the non-major banks than the majors. Home loan customers ranked ME Bank top in this area, and ING came in second. Gibson said the loan books of the nonmajors had grown considerably over the last 12 months, outstripping the growth of their competitors. He said this was down to brokers and customers liking the non-major market due its service proposition, but also because there was more of a desire to use a non-major. However, he added that the non-majors had let themselves down in the past with
regard to consistency of service, but that was now on the way out. “Where we’ve had good rates, there’s been a spike and turnaround-times blowout,” he explained. “But I think in the last 18 months particularly, we’ve seen a shift. The investment in technology and the investment in processes has meant that consistency of service is there all the time.” “From an ING perspective, we’ve been at two-day turnaround times now for 12 months. You know what you’re going to get, you know how long it takes, so when you’re speaking to the customer from a broker’s perspective, you know what your service proposition is.” Agreeing, Kelso said the non-majors were able to match the big four in terms of service, and for brokers that was crucial. “That’s their brand and their own reputation they deliver as well, so they are reliant on us to be able to deliver what they need,” she said. “So, being able to pull in all these things from a technology perspective, and having that out there for the broker to be able to speed up turnaround times and to deliver that same service they were getting from the
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SPECIAL REPORT
NON-MAJOR BANKS ROUNDTABLE 2020
majors, it makes sense that they’re going to be putting us out there now.” The non-majors agreed that technology had played a big part in improving their service to customers and brokers. Haslam pointed out that this, combined with the
as opposed to years gone by when we used to look on with great envy at the majors, and that’s well and truly changed now. From our perspective, it’s game on.” As well as technology helping their proposition, the non-majors all agreed it was the
“Another one we want to compete on really hard ... is around capability, because it’s much easier now to enable the business from a technology perspective” Glenn Haslam, Suncorp reliability of their service, meant that all of the non-majors were well placed. He added that Suncorp had been working to get into a better position, and he believed they could win on trust. “We think that’s a really important piece, both with what we do in the bank and then what we also do in the wider insurance business as well, being there when customers need us most,” he said. “Another one we want to compete on really hard with this panel is around capability, because it’s much easier now to enable the business from a technology perspective,
broker channel that was really helping them with customers. Rakhit reiterated that brokers were “critical” to his bank’s success, adding that they represented “phenomenal distribution” for lenders of Bankwest’s size. “Broker share has grown. Why? Because brokers deliver great customer outcomes, and they need their lender to make them look good to make sure we back that up and make sure we also deliver great customer outcomes,” Rakhit said. “The same as everyone else, we’ve invested heavily in making sure our service proposi-
BROKER QUESTION
Q
The big four are getting very competitive. What are your strategies to add value for brokers and customers?
Rakhit: “We are here to provide competition, and we should relish competition, because ultimately it will give brokers greater choice, and it will give customers greater outcomes. How Bankwest have approached it is, we made a decision two years ago to close the majority of our branches on the east coast, and we were quite deliberate in saying this was a reinvestment in the broker channel. It’s with technology that I feel we can really play a part; it’s a big leveller for us.” Gibson: “There are lenders in the market that are specialists, and there are lenders in the market that want to service the entire marketplace. [It’s about] wanting to specialise in certain areas and wanting to have a broad experience, but knowing what you want to do and focusing on that and knowing what you don’t do well and not focusing on that. I think it’s about what your appetite is, where it is, and then focusing and delivering on that.”
tion is strong and that brokers want to select us because of that service proposition. That ultimately will get us repeat business and deliver great customer outcomes.” Asked whether the high satisfaction and growth in loan books meant that Bankwest could afford to stay still, Rakhit said the introduction of things like comprehensive credit reporting, open banking and new valuation services would level the playing field even further. “Speed to approval continues to be one of the main drivers of broker choice and under the best interests duty will still be a really core reason for selecting a particular lender,” he said. “What’s coming on to the market over the next few years is going to help all lenders help all brokers help all customers.”
How are you staying relevant and keeping up with technology, considering the rise of fintechs and neobanks? With technology at the front of everyone’s
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BROKER QUESTION Given the future of open banking, where do the panellists see the need to provide PDF bank statements as part of a credit package (is digitally captured data sufficient?) whether that be via current aggregation technologies or open banking APIs?
Q
Rakhit: “We welcome open banking because that will eliminate the need to give up your credentials. Whether that means we don’t need payslips, or we don’t need bank statements, we’re quite excited about where open banking or comprehensive credit reporting could take us. We possibly could see a world where we don’t need documents because we’ll be able to see the customer’s credit history and payment schedule through those two mediums rather than core documents, so we’re very keen to see where this takes us.”
minds, the group continued to expand on some of their earlier comments. Particularly with the surge in neobanks and fintechs over the last few years, the push to innovate and provide the same level of speed and ease had never been stronger. It was also pointed out that while the non-majors may not have loan books of the same size as the majors’, they
probably given away to our competitors. It’s time for us now to really make that investment, take it to the next level, improve our technology offering, keep growing that as quickly as we can, and keep investing as heavily as we can.” Focusing on what the investment in new tech actually meant for brokers, Gibson said
“We know we’re going to win on service ... We know there’s a price game there, but it’s hands down a service game, so we need to keep up with technology” Natasha Kelso, Bank of Queensland also did not have the same legacy systems and could therefore be more agile. At Citi, Wood said there was a focus on growing the mortgage side of the business, which involved a great deal of investment in technology. “We really want to transform and make up for some lost ground that we’ve
ING was working on technology for both the front end and the back end, going beyond just the mortgage settlements. He added that the bank already processed 800,000 digital transactions every day, showing the importance of the digital customer experience more widely.
Gibson: “I’ll add from a global perspective, the end state will depend on the country, or it will depend on privacy legislation, or it’ll depend on regulation. The end state already in France is zero document mortgages, so no payslips, no supporting documents whatsoever. Especially for existing customers or known customers, you have open banking or the data. But the technology is there; it exists today with personal loans and credit cards. How far do you take that – down to the point of, are there even mortgage documents that need to be signed? It will come down to how we sit within Australia. But technology-wise, it’s absolutely doable.”
“When you think about the amount of customers you have, and when you think about 800,000 digital interactions daily, that shows you that, OK, it’s about processing mortgages or onboarding, but then it’s what technology do you experience as a customer afterwards?” he said.
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NON-MAJOR BANKS ROUNDTABLE 2020 BROKER QUESTION What is your take on the key changes that lenders will need to make within a best interests duty world, and how are you planning to support brokers under this new regime?
Q
Gibson: “What we’re doing at ING is really all we can do: listening, looking at where the market is shifting, and watching what actually happens. For example, let’s say best interests duty was a particular feature. We would have to react quickly if we didn’t have that feature. So, it’s more of a case of understanding what’s going to happen in the market over the next 12 months, and is there going to be a shift?” Rakhit: “I think best interests is not going to be a change for many brokers; I think it will be around note-taking and evidencing of conversations that are taking place. The reason brokers are so successful is because they look after the customer and act in their best interests today. One thing we’re looking at is product set, packaged products and non-packaged products. We’re also looking at whether we need to surface our SLAs so we’re able to arm the brokers with the full options, and they can document those full options when recommending or giving credit assistance to a particular customer.”
“How many people use their phones for everyday transactions? How do you apply for cards over digital applications? I think if you have a look at especially the non-majors and their investments, it hasn’t simply just been in the processing of mortgages; it’s been in the entire customer journey.” At Suncorp, Haslam said the message was “loud and clear”.
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“Speed to approval [is] one of the main drivers of broker choice and under the best interests duty will still be a really core reason for selecting a particular lender” Ian Rakhit, Bankwest “We need to be more predictable, reliable and consistent. So our focus around technology investments has been hitting those pain points that have been causing some grief, and we have had that investment and we are delivering on some of those programs of work, but it’s ongoing.” Haslam added that it would not be a case of delivering new technology and then thinking they had “nailed it”. The bank would continue to work on things like optical character recognition (OCR) and robotics. Expense verification was another issue, as different lenders treated this differently. “The key for us is just being consistent and reliable and predictable, and the neos come along and they can do all the things they like,
but if you actually have that confidence in your process, you’ll continue to be quite successful,” he added. Rakhit said Bankwest had introduced a number of new features over the past 12 months, such as DocuSign with electronic contracts, and a postcode and policy tool. “More than 90% of our contracts are signed digitally,” he said. “That takes about seven days out of the process, from contract to settlement. That’s a huge win; the broker sees the contract for 12 hours before to make sure it’s correct, and then it goes straight to the customer. “[The postcode tool] allows a broker to look at any postcode in Australia and see what LVR Bankwest will lend on that security.
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BROKER QUESTION
Q
There are differences in credit policy between BDMs and manuals, etc. How are you communicating with brokers as these changes come in and there’s confusion?
Kelso: “There’s an element here that needs to be considered, which is around the appetite. You can have something that will fundamentally tick all the boxes when it comes to a policy, but it’s where the appetite comes in over the top to go, is this the right thing to do for this customer? I think there’s an element there to lean on the BDM team, who are amazing, to really coach our brokers around the appetite and looking at the overall risk of the deal.” Haslam: “One of the things we really turned our attention to is our assessment team: working with them around what should they be looking for; allowing more judgmental decisions where we know there’s strong credit involved, a low risk rating, well-serviced debt; and giving that autonomy within their delegations to be able to approve. There shouldn’t be a variation between BDMs. We want to find our way back to making good credit decisions based on the customer’s situation, rather than going, ‘This doesn’t fit, I need extra information’, when in fact it’s not required.” Gibson: “You may have five things you need to comply with, but you’ve got four, and there’s one thing you’re not too sure about. I think that’s the challenge between a BDM and an assessor, because an assessor has then got to use their delegation. Being able to use that discretion, and the BDM knowing that that person will use their discretion or won’t use their discretion, has probably been the greatest focus for ING over the last 18 months: to have this massive relationship with the credit assessors and the BDMs so they knew what would back each other.” Rakhit: “We spend a lot of time on educating credit managers to ensure they truly understand the questions to ask to get the full scenario, and also our BDMs who generally get most of our credit enquiries and are well backed by our team of credit managers. There shouldn’t be such a thing as policy discrepancy; it should be that the case is a yes or the case is a no, or the case is a yes subject to you satisfying these things. If there’s still work to do, then we will absolutely do it.”
It’s investments in those types of things that will keep us relevant and at the forefront.” Digital documents are almost becoming expected now at every bank, and Bank of Queensland is no different; Kelso said the nonmajor had introduced this feature last year. But something that she was particularly excited about was the work on AI, which will create the ability to scrape bank statements and payslips and then instantly send the information. If there were any discrepancies or questions, it could go back to the broker instantly, and hopefully this would pave the way for faster and more instant approvals. “So there’s lots of work at the moment going into how we speed up this process,” Kelso said. “We know we’re going to win on service, and that’s absolutely it. We know there’s a price game there, but it’s hands down a service game, so we need to keep up with technology and make all these things happen really quickly.”
In our recent survey, brokers ranked communications, training and development as their third most important priority. What are you doing in these areas? Taking the place usually held by turnaround times, the category of communications, training and development was voted by brokers as the most important priority in MPA’s Brokers on Banks survey this year. Gibson said communication had often been a challenge in the industry, for example when businesses, banks or other industry groups might have to reach 17,000 people, and there was also the question of when communication became spam. So ING had taken a “more proactive approach” when it came to initiatives like training, such as holding human-centred design courses to help brokers think things through a bit differently. Gibson said it was
also about “two-way communication”. “We love getting out and speaking to brokers; eyeballing brokers, listening to brokers and hearing what they’re saying, because the communication back [from them] on what is working, what is not working and what the pressure points are is fantastic,” Gibson said. “All of us are out and about speaking to brokers all the time, with a desire to listen as opposed to just going through the motions. We need to change our business for the better, and the only way to do that is to speak to the brokers directly.” With all the changes coming through from the banks, whether related to policy or new innovation, Kelso said the question for her was how she would get all these changes out to brokers without disrupting them with even more emails. Bank of Queensland ran roadshows where it could get in front of the brokers, and the bank teamed up with
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NON-MAJOR BANKS ROUNDTABLE 2020 mortgage insurance provider Genworth to add that extra benefit for brokers attending. “Fundamentally, it does come back to having a really good team of BDMs out there on the road,” Kelso said. “They’re in front of
“It’s a real passion of mine in running the team as to how people are within it, what they’re doing to represent the brand and their own brand, and what the brokers need from them,” he said.
“It’s time for us now to really make that investment, take it to the next level, improve our technology offering, keep growing that as quickly as we can” Matt Wood, Citi brokers, and they’re delivering these messages, because it really is a hard piece to get these communications and training out there.” Wood said Citi also relied on its BDMs to get the bank’s messaging out. Citi had invested heavily in its people, and he said the bank encouraged its BDMs to be “longtermers”, with the average tenure across its BDM team being around seven to eight years.
According to Haslam, professional development “is never going to be more important”, particularly as the industry moves forward in terms of regulatory change. Suncorp offers platforms such as the Sun Broker Academy, a self-service portal that provides courses and team development. It also has its SunEducation program for brokers who want to diversify into small
business, and a national event that it hosts along with its insurance team. Praising the engagement between brokers in different industries, Haslam said, “They all share very similar problems, and insurance is certainly heading down a very similar path with regulation. He added, “We think there’s real value in the foundational pieces we provide, which is really important and a key part of what we do in differentiating a proposition. But that engagement we found was really quite positive in bringing those two communities together, and we’ll continue doing that this year as well.” Reiterating the views of many of the other panellists, Rakhit said, “BDMs are the kings and queens”. He added that they were a great source of knowledge on what brokers were talking about and looking for. “We don’t land any piece of change on our brokers unless our BDMs have already roadtested it and signed it off, and quite often they’ll send things back to the project teams and say, this isn’t ready,” Rakhit said.
BROKER QUESTION
Q
How are you working with regional brokers who are seeing fewer BDMs and less support?
Kelso: “One of the pieces we are doing at the moment is looking at how can we expand our team to see how they can service [places like] Queensland in particular, and we’ve got some great brokers all along the coastline. The BDMs have really big portfolios – how do we ensure they’re not being overstretched themselves, and how do we make sure these brokers are well and truly looked after? We do a lot of webinars and things that we invite them to come along to, and there’s some policy stuff that we look at with the regional brokers on how they can work with us. So, for example, remote interviews with their customers to try to support them more as well.” Haslam: “We’d love to hear from brokers if we’re not doing enough, and what they’d like that to look like, and we’ll get on to it. I know it’s really important to be face-to-face. Our senior leadership teams are the highest part of our group; they’re up in Far North Queensland pretty regularly and can find ways to connect, meet and share their perspectives. So, very happy to hear from any of the brokers up there about what more we can do if we’re letting them down a little.” Wood: “The question probably gives me an opportunity to let the brokers know what Citi does, and a slogan that I have that my staff will probably laugh at is ‘Citi by name, city by nature’. Our policies are reasonably conservative, but we’re more tailored to the bigger cities and the surrounding suburbs of those cities, and with only a 12-man BDM team we don’t push out too much further than those cities.” Rakhit: “One thing we found quite successful is getting together with two or three other lenders and then presenting something, particularly in Far North Queensland; we do that four times a year. The aggregators help us bring brokers across different groups together and really do a good education session every three months. Regional WA is big for us; we do put in a lot of time and effort there; we support them both in terms of acquisition but also in looking after some customers that are going through difficult times.”
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FEATURES
PROPERTY INVESTORS
Understanding property investors The investor market has been showing signs of recovery. MPA talks to those working to help investor borrowers, who give their advice on what brokers need to know about the segment
THE PROPERTY INVESTOR market has been on a “rollercoaster” for the last two and a half years, says mortgage broker and property investor David Merison, but there have been signs of a recovery. “With the advent of the interest-only caps placed on lenders’ balance sheets, investment lending almost became a dirty word, and lenders priced this area of business accordingly,” the Vault Plus Mortgages broker says. “This, with a slowdown in the economy, meant that investment lending really stalled. In more recent times lenders have got their balance sheets back ‘in order’ and, in line with the requirements of ASIC, investment lending is continuing to play a role in both brokers’ and lenders’ portfolios.” The investor market began picking up again after APRA removed its 30% cap on new interest-only loans in December 2018.
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The cap had been introduced in March 2017 in response to concerns about an oversupply of interest-only loans. This led to a marked reduction in the proportion of new interestonly lending, taking it down below the 30% threshold.
ultimately be rented out after substantial remedial work. “Interest-only scenarios are still sought but are becoming less frequent, largely in reaction to financiers making them less widely available.”
“Investment loans are less emotionbased than owner-occupier loans, and borrowers may be more pragmatic about the purchase” Melissa Christy, 86 400 On the current state of the market, smartbank 86 400’s lending lead, Melissa Christy, says, “There seems to be a healthy demand for investment properties in prime locations, with a few surprising results related to renovation projects to be
Differences and challenges of investment lending Although a property investor still requires a home loan, there are different scenarios that lenders and brokers need to be aware of. Christy says 86 400 actively targets investors
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BROKER’S TAKE: BENEFITS FOR BROKERS Mortgage broker David Merison from Vault Plus Mortgages says there are many benefits for brokers looking to move into the investment property space. “Firstly there is the old adage of making your current clients ‘stickier’, as they have more than one offering or service with you,” he says. “But more importantly, investment lending – done well – takes a higher level of skill, and this is invariably recognised by clients. Like any new skill set, you will need to invest and educate yourself on the mechanics of investing in property so you can truly hold yourself out as a ‘resource’ or ‘authority’ in this space. “But if you can upskill yourself to operate in the investment property space, then you will set yourself apart from the stereotypical broker who relies on software to produce an outcome for a client’s home loan.”
that have small portfolios and secure most of their income from PAYG sources rather than investment income. Another factor to keep in mind is that providing evidence of serviceability can be more problematic for investors, in that
owner-occupier loans, and borrowers may be more pragmatic about the purchase,” she says. “First-time investment borrowers should be taken through the process and explained what they will be liable for going forward in relation to water, council rates or strata fees, and
“Brokers play an important role in providing guidance and key information to people who are looking to buy a home or invest in property” Pauline Blight-Johnstone, Genworth lenders need to check whether they can afford all of their commitments, not just the investment loan in isolation. Christy also has some advice for brokers working with property investment clients. “Investment loans are less emotion-based than
understand that they might also have periods when they won’t have any rent coming in, and during these periods of time their investment loan would still need to be paid.” One of the challenges of the property investor market is the lack of understanding
of what would be payable by the landlord and what would be the tenant’s responsibility, Christy adds. “Similarly, a lack of diligence in reviewing tenants can catch investors out, and a desire to maximise rental income might see an inexperienced landlord accepting a very short-term higher rent over a longerterm more stable but slightly less attractive arrangement,” she says. From a broker’s perspective, Merison says one challenge faced when working with property investors is that of education, adding that it’s not in his DNA to provide an investment loan to a client and say, “Off you go!” “The premise of our business here at Vault Plus Mortgages is that we help people,” he explains. “We make sure as best we can that the risks are mitigated, and we ensure clients have a Plan B if certain events happen.
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FEATURES
PROPERTY INVESTORS
“The biggest fear for nearly all property investors is, ‘will we be able to lease the property out?’ and ‘will we be able to make our repayments?’ These two concerns are easily accounted for when you know what you are doing and you have experience to draw upon, and we provide these resources to our clients as part of our service.”
with information about our products, our application process and training resources,” Christy explains. “Our entire company uses Slack, which is utilised by the BDMs to get immediate responses from our credit team on scenarios and potential deals from brokers.”
“We make sure as best we can that the risks are mitigated, and we ensure clients have a Plan B if certain events happen”
Supporting brokers Although new to the market, 86 400 has come in ready to provide fast turnaround times and support property investors. The neobank launched its home loan offering towards the end of 2019 and distributes its products exclusively through brokers, with no need for the paperwork that many other banks require: everything is collected and signed electronically. For brokers looking to help their property investor clients, the bank has a team of BDMs who meet with brokers to provide assistance. But it doesn’t stop there: 86 400 also focuses on education and speed of communication. “We run group training, conduct webinars and have a comprehensive broker website
David Merison, Vault Plus Mortgages Property investors, just like owneroccupiers, can also benefit from lenders mortgage insurance. Pauline Blight-Johnston, CEO and managing director at Genworth, an LMI provider that works with more than 100 lenders, says the group appreciates the relationship it has with brokers. In support of the industry, it offers training and education so brokers can understand how the insurance works and where it may be applicable to potential borrowers. LMI can
GROWTH IN NEW HOUSING LOAN COMMITMENTS % change in new loan commitments, seasonally adjusted
Month % change
Year % change
30 25
23.3% 20
$20.73bn 26.9%
15
$15.03bn
10
14.7%
$5.70bn
5
4.6% 0
Housing
offer a property investor the opportunity to get into the market with a smaller deposit – as little as 5% – so they can start building their portfolio and equity. The benefits of LMI include being able to purchase a property sooner than would
5.0% Owner-occupier
3.6% Investor
New loan commitments, Jan 2020
otherwise be possible. It also allows the investor to borrow more and invest more into a property; to claim the cost of LMI as an expense against the property and receive a tax deduction; and to save on upfront costs by using the option of capitalising the LMI premium into the loan amount. Genworth participates in personal development training days and industry broker roadshows at which teams are available to answer brokers’ questions. Through its long association with key industry bodies, it also works collaboratively to develop tools that can assist brokers in helping their clients. The Genworth It’s My Home magazine is a lifestyle publication that includes information on the homebuying process, a checklist for moving, different home loan options, and much more. There is also a dedicated resource centre on the Genworth website where brokers can access marketing material, FAQs and videos to help them explain the benefits of LMI to their clients. “Brokers play an important role in providing guidance and key information to people who are looking to buy a home or invest in property,” Blight-Johnston says. “We work closely with our broker network to ensure they have the resources and assistance they need so they can advise their clients when lenders mortgage insurance may be appropriate for them.”
Source: ABS, Lending Indicators, January 2020
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© We
7/04/2020 9:14:05 AM
Helping Brokers open doors. Westpac is listening to what Brokers need and are making changes to help you open more doors. Visit us online to check out our initiatives for Brokers or talk to a BDM.
Westpac Brokers
Š Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.
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FEATURES
WOMEN IN BROKING
Tackling gender inequality The number of female mortgage brokers recruited has continued to drop, but the industry is still fighting to bring more women in THE ARGUMENT for increasing gender diversity in broking hardly needs to be repeated, yet figures continue to show a decline in women entering the industry, and the number of females remains below a third of the entire broker population. According to the latest Industry Intelligence Service report from the MFAA, in the six months to September 2019 the proportion of female brokers rose by just two basis points from the six months previously, to 27.2%. While the broking industry as a whole saw a drop in broker numbers, this was felt more sharply in the female segment as just 281 women were recruited as brokers during the period, in contrast to 630 men. This continues the steady drop in females entering the industry since the April–September 2017 period, when more than 500 female brokers were recruited.
Belinda Wright, executive manager, broker partnerships, in Westpac’s mortgage broker distribution team, says the industry
of work to be done to see women represented in broking at the same levels as in other industries. To encourage an increase in these
“It’s vital for the industry to be highlighting the benefits of women becoming brokers, such as being able to make a difference to people’s lives” Belinda Wright, Westpac has improved to include more flexibility and roles for women in broking. She adds that the option to work flexibly is becoming much more mainstream, including at Westpac where 74% of employees work flexibly. She admits, however, that there is still a lot
numbers, she says, “It’s vital for the industry to be highlighting the benefits of women becoming brokers, such as being able to make a difference to people’s lives by helping them get into their own homes; the fact that the work is challenging and every day will be
BROKERS RECRUITED BY GENDER Brokers recruited
Apr 15– Sept 15
Oct 15– Mar 16
Apr 16– Sept 16
Oct 16– Mar 17
Apr 17– Sept 17
Oct 17– Mar 18
Apr 18– Sept 18
Oct 18– Mar 19
Apr 19– Sept 19
Number of men recruited during period
931
972
947
938
1,168
892
854
625
630
Number of women recruited during period
475
454
439
360
523
406
371
313
281 Source:MFAA’s 9th Industry Intelligence Service
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and teams that are inclusive see greater levels of employee engagement. While there can often be a stereotype of finance being a man’s world, Wright says women should not feel that they need to change who they are to be taken seriously. “Women do not have to ‘become more like a man’ or choose their career over their family,” she says. “I have been lucky to be mentored by some extremely strong, intelligent women who have become exceptionally well-respected women in the industry, all while raising a family.” As the industry looks to encourage more women into broking – and to keep women in broking – Wright says there are things that brokerages can do when they recruit. “I would encourage broking businesses to identify potential unconscious bias in their recruitment processes, think differently about the talent pools they recruit from, and challenge themselves to aim for gender equality on recruitment shortlists,” she says. From a female broker’s perspective, Loanezi managing director Renee Tocco loves being different, and there’s flexible working hours and the opportunity to be your own boss.” Seeing the declining figures, the MFAA began its Opportunities for Women (OFW) initiative back in 2018. Jane Counsel, Executive Central Group’s principal consultant, has been leading the MFAA’s research and working groups from the start. She says increasing gender diversity in broking is “not a quick-fix solution” but something that requires a continued and sustained focus by the entire industry. “The MFAA research is telling us that retention is the key opportunity to focus on in the short term,” Counsel explains. “In the MFAA’s 2019 OFW Survey we found that women were more likely than men to report that their experiences around flexibility, earnings potential and development opportunities had not met their initial expectations. Therefore, we have identified an opportunity to provide additional support for
“We have identified an opportunity to provide additional support for our female brokers through the development of a peer-to-peer support program that will be launched later this year” Jane Counsel, Executive Central Group our female brokers through the development of a peer-to-peer support program that will be launched later this year.”
Fighting against the stereotype For Wright, the benefits of gender diversity are “clear”. She says a workforce that mirrors your client base drives increased levels of customer service and satisfaction; diverse teams challenge the status quo and drive innovation,
a broker but says she has faced challenges. As a business owner, she has “quite accidentally” employed an all-female team, hiring staff based on suitability and cultural dynamic. “I can certainly tell you that my team are all equally committed to the brand, to the vision and to our endeavour to grow,” Tocco says. “They work relentlessly under my leadership, and together we are an unstoppable force.” She adds, “I do believe females need to stick
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FEATURES
WOMEN IN BROKING
together, give each other a leg-up when we can, and help shift the equality ladder sooner.”
Wider initiatives for gender equality In the effort to encourage more women, Wright says Westpac is working closely with aggregator groups and looks out for opportunities to support them in any diversity and inclusion events they might be running. For instance, the major bank has partnered with Loan Market’s Leading Ladies Summit and supports Connective’s Empower Women program and FAST’s Women in Business series. Internally, the Women of Westpac employee action group supports female staff in reaching their full potential through engagement, education and empowerment. There are dedicated leadership coaching programs – ‘Making My Mark’ and ‘Women on the Move’ – “to help women build confidence in their capability, personal brand and networks”. Wright adds, “We also offer initiatives to support women at all stages of their career, including flexible work arrangements, paid parental leave, paying super on unpaid parental leave, and our program supporting employees with caring responsibilities.” Going beyond just focusing on its staff and the industry, Westpac has also set up Ruby
FEMALE BROKER NUMBERS CONTINUE TO FALL Number and proportion of female brokers in the industry
4,500
27.8%
28.3%
27.4%
3,700
3,708
4,000 3,500 3,000
27.1%
27.1%
27.0%
3,871
3,779
3,746
3,679
3,312
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27.2% 25% 3,361
20%
2,500 15%
2,000 1,500
10%
1,000 5%
500 0
Oct 15– Mar 16
Apr 16– Sept 16
Oct 16– Mar 17
Apr 17– Sept 17
Number of female brokers
Oct 17– Mar 18
Apr 18– Sept 18
Oct 18– Mar 19
Apr 19– Sept 19
0%
Proportion of female brokers Source:MFAA’s 9th Industry Intelligence Service
Association, she says the Women’s Forum is “one of the most rewarding endeavours” she has ever started. “Many women in the commercial finance sector rarely engage with professional development days, due to family commitments
“I do believe females need to stick together, give each other a leg-up when we can, and help shift the equality ladder sooner” Renee Tocco, Loanezi Connection, an online community for women across Australia where women can come together and become more “financially savvy and confident about what they can achieve for their futures”. Loanezi’s Tocco has also been involved in events for women in the industry. Working with the Commercial and Asset Finance Brokers
30%
27.3%
and the stigma, but this has brought us all together,” she says. “We have so many incredibly successful women, completely out of the limelight, who are connecting and actively engaging in the finance broking sector.” Rather than making its Opportunities for Women initiative a one-off event, the MFAA has continued its work and is now in its third year
of producing research and holding workshops. Counsel says the organisation believes it is an opportunity to improve the sustainability and future viability of the industry. “Increasing the gender diversity of our broker base will ensure that we as an industry are better positioned to anticipate and respond to the diverse needs of our customers,” she says. Counsel adds that the MFAA is already seeing small but important changes in terms of the perspectives of its members, but she encourages everyone to understand the role they need to play in ensuring that the industry is inclusive of everyone. She says, “That involves us thinking about what we traditionally value in terms of success, the role models that we promote as being successful, how we behave at industry events, how we call out and celebrate the contribution of our female brokers, how we call out bad behaviour, and how we promote the many wonderful things about working in this industry to women everywhere.”
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FEATURES
BROKER SUPPORT
Real-life help for customers in need In the wake of COVID-19, it’s crucial that brokers provide support for their clients. Aaron Milburn, Pepper Money’s general manager mortgages and commercial lending, explains OVER THE last couple of months, daily life as we know it has been turned upside down by the COVID-19 pandemic. Businesses have closed, jobs have been lost and infrastructure has been placed under strain, all over the world. Amid the chaos, Australia has emerged as something of a dire case, too. Given the devastation that bushfires caused just a few months prior to the coronavirus outbreak, many are now feeling the effects of what has effectively been a double hit to their livelihoods. But when looking at the broader statistics, it’s easy to lose sight of the individual narratives that make up the greater whole. For Aaron Milburn, Pepper Money’s general manager mortgages and commercial lending, it’s crucial to stay focused on the people who have been most heavily affected by the current situation. After all, he says, it’s those individuals who make up the wider collective – and helping them one-on-one is
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a step in the process of helping everyone. “We understand that the impacts of COVID-19 have been significant, and it’s an extremely tough time for many people,” says Milburn. “We need to remember that
Every borrower has unique circumstances, therefore COVID-19 will impact individuals differently. “Pepper Money has always been passionate about every Australian understanding all their financial options, which is why we have invested heavily over the years to help educate brokers,” says Milburn. Now, he believes, is a time when brokers can step up and put their education to positive use in service of the wider community. Milburn points to a number of situations that could arise for borrowers. Unexpected events, like the one we are experiencing right now, may make it difficult for some people to maintain their loan repayments. This may be the result of the reduced income of either the borrower or their partner with whom they may share a joint account. Some borrowers may also have an investment property loan and discover that their tenant is either delayed in paying rent or simply unable to pay it due to their own situation during this public health crisis. “This is where the support of an empathetic broker during this uncertain
“We need to remember that behind every customer is a real family who could be impacted – and we are committed to helping them succeed” Aaron Milburn, Pepper Money behind every customer is a real family who could be impacted – and we are committed to helping them succeed, even in these difficult circumstances.” Brokers, says Milburn, have an obligation to support their customers during this period.
period is invaluable,” says Milburn. “One of the ways they can do this is by proactively reaching out to the borrower to check in to see if they are experiencing issues or hardship – and encouraging them to contact their lender sooner rather than later
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if they need to seek financial assistance.” For example, Milburn notes, a borrower’s loan account may have features that could help them manage their repayments or cover other daily essential expenses, like groceries or utility bills. They may also be able to access available funds through a redraw or in their offset sub-account. “Other options may include potentially
change in circumstances, we will aim to work with them to understand their unique situation and find a solution.” Milburn is also keenly aware that brokers themselves will need support during this difficult time. He is quick to point out that uncertainty due to the economic impacts of the COVID-19 pandemic is not merely limited to borrowers.
“Pepper Money will continue to honour all trail payments on loans with customers whose ability to make repayments is affected by COVID-19, until at least 31 December” Aaron Milburn, Pepper Money accessing equity in their home loan or reducing their loan repayment amount for a set period of time, or implementing a repayment break,” Milburn explains. Some individuals or business owners who have been impacted by COVID-19 may also have access to government assistance through initiatives such as the ‘Supporting Individuals and Households’ financial assistance plan, or the recent support measures implemented for sole traders. Despite the media buzz surrounding the COVID-19 situation, not all clients will be aware of their options. Brokers having these conversations with their clients sooner rather than later is critical to achieving the best outcomes, Milburn stresses. “Whether they are preparing for changes ahead or having difficulty meeting their financial obligations now, we recommend that they let their lender know as soon as possible so that they can discuss their options,” says Milburn. “If we become aware of a borrower’s
“Pepper Money will continue to honour all trail payments on loans with customers whose ability to make repayments is affected by COVID-19, until at least 31 December 2020,” says Milburn. “We understand that while a broker’s priority is first and foremost their customer, they may also feel uncertainty about the future.”
ABOUT PEPPER MONEY Pepper is Australia’s number one alternative lender, and we live our mission: to help people succeed. Since 2001, we’ve been helping over 200,000 Australians who don’t tick all the traditional boxes for home loans – and we also provide personal loans as well as professional equipment and car loans. We’re a well-established global credit provider. As well as consumer lending, we also offer specialist experience in our core disciplines of Property Advisory and Asset Servicing across the residential and commercial property sectors. Our offices span Australia, Asia and Europe – including Ireland, the UK, Spain and South Korea. For more information, visit www.pepper.com.au.
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FEATURES
ASSET FINANCE
Investing in effective assets Asset finance is becoming increasingly popular as an option for businesses that are in the process of expansion. John Mohnacheff of Liberty Finance explains to MPA how brokers can benefit from the opportunity this presents
WHEN BUSINESSES are starting out or hitting a point of expansion, there are often a variety of fi nancial challenges that can present themselves to entrepreneurs. Is it a wise time to invest in new assets that may expand the company’s reach? Or would it be better to hoard cash for a potential rainy day further down the line?
Asset finance can help bridge the gap in such situations. Brokers who are working with clients who are in the process of establishing or expanding their own businesses may consider offering such products as a solution. Asset finance, explains John Mohnacheff, national sales manager at Liberty Finance, is primarily sought by customers who are
ABOUT LIBERTY FINANCIAL Liberty is a leading lender that offers free-thinking solutions at competitive prices to support customers with greater choice. With a wide range of loans for your home, car, business and personal needs, Liberty can help customers get financial even when others say it’s not possible. Our innovative and flexible approach has allowed us to help over 500,000 customers by advancing more than $25bn in funds, over 21 years. For more information, visit www.liberty.com.au.
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looking to source a new vehicle to grow their business or boost their productivity, without sacrificing their cash flow. “Even if they can afford the expense upfront, financing a new vehicle allows customers to tailor their repayment terms to better suit their budget over the long term, while maintaining cash reserves,” says Mohnacheff. “And, if they are using the vehicle in question for business purposes, it might be tax deductible.” Mohnacheff says it’s important for brokers to ensure that customers are aware of the myriad ways they can support them in reaching their financial goals – on both business and personal levels. Brokers shouldn’t be intimidated by the prospect of expanding into new areas; rather, it’s an opportunity for them to broaden both their range of services and the potential customers that they can reach.
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“Some brokers avoid moving into other areas of lending because of perceived complexity, but when it comes down to it, there is very little that changes” John Mohnacheff, Liberty “Some brokers avoid moving into other areas of lending because of perceived complexity, but when it comes down to it, there is very little that changes,” says Mohnacheff. Essentially, working with business owners is the same as working with any other customer; the fundamentals of quality service remain the same. Customers seeking asset finance expect good communication and fast turnaround times, and they still want to access the financial solutions that suit their needs, Mohnacheff explains.
“Succeeding in asset financing requires the same skills as it does to succeed in any other area of lending – and there is so much opportunity for brokers who see the benefit of expanding their customer offering,” says Mohnacheff. But how does this play out in practical terms? What sorts of discussions do brokers need to be having with their clients in order to guarantee that they’re maximising their opportunities? Mohnacheff suggests it’s best to start with the basics and work from there. “The first step is to have an open and
honest conversation with customers about their current situation and their future business goals and work out the kind of finance they might be looking for,” he says. “Depending on their needs, a simple motor loan could benefit them more than they realise, and provide the perfect solution to their personal or business needs.” Mohnacheff also sees such conversations as crucial to looking at a client’s wider finances in a holistic fashion. People often come from complex or non-traditional financial backgrounds, but this doesn’t mean they should not have the chance to attempt entrepreneurial projects. Brokers should be able to leverage their skill sets to aid people who find themselves in such situations, rather than simply rejecting them out of hand. “One of the things that sets us apart from others is our unique approach to lending, and our ability to look at the customer’s circumstances more broadly,” says Mohnacheff. “While some lenders may automatically decline borrowers with a history of bad credit, we look at the big picture and assess applications on a case-by-case basis.” Indeed, Mohnacheff sees asset finance as part of a broader trend towards diversification in the broking industry. While there’s still room for sole specialists in broking, many brokers are looking for alternative income solutions, in no small part due to the cyclic nature of property. For commercial brokers, it’s also a logical extension of working in the business space. “For brokers who help customers obtain a mortgage, it’s always worth enquiring about the customer’s additional lending needs, as you never know what you might uncover from a simple question,” says Mohnacheff. “From car loans to debt consolidation and perhaps even commercial, business or SMSF loans, there could be countless opportunities for mortgage brokers to find new leads within their existing databases. Liberty has always championed diversification, and our BDMs can provide brokers with the personalised training they need.”
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FEATURES
PRODUCTIVITY
How to make emails less distracting Many of us wish there were more hours in the day to get stuff done. Emails are one thing we all have on our to-do list, and they can end up taking way too much time out of our day. Donna McGeorge explains how you can make emails less distracting and be more productive HOW DO you currently spend the first two hours of your day? Unfortunately, most of us come to work, grab a coffee, chat with a few colleagues, sit at our desk, open our emails and respond to them from the top down. Then, before you know it, it’s 1pm and you’re still reacting to requests. News flash! You are letting email dictate your day. Whether you are conscious of it or not, those emails you have read, replied to or filed create distractions and make you unproductive for the whole day. You have given up control of your effectiveness – but the good news is you can win it back.
Transform bad habits into good According to an article by DMR, a company that looks at social media statistics and trends, the average user gets around 112 emails per day. (I’ve heard people say the number varies from
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40 to 200 per day, depending on the role.) What percentage of those are important and require a considered response from you? The answer is almost unanimously 10%. A study by the University of Glasgow found that we use email correctly to leverage time zones or answer a well-defined question only 20% of the time. The rest is a waste, and much of it could have been better handled by a phone call or face-to-face discussion. Many of these productivity problems arise because we are operating on autopilot. We don’t think about what, when or even why we are doing things; we just do them in the order in which the tasks came to us, or how they’re written on our to-do list. Well, no more!
Leave it ’til lunch For most of us, our peak alertness is at 10am and our best coordination is at around 2.30pm.
This is best explained by the work of Michael Smolensky and Lynne Lambert, published in their book The Body Clock Guide to Better Health, which describes a person’s typical circadian rhythm. Hence, tasks that require attention and focus are best done in the morning, and repetitive tasks are best done in the afternoon when your body is naturally looking for a rest while it digests your lunch. At this time, we often experience a drop in attention, memory, logical reasoning and mood. This is not a good time to have a meeting where critical decision-making or problemsolving is required, but it is a good time to do things like, yes, answer emails. While it does seem ridiculously late, remember that only about 10% of your email requires a considered response, so now you can manage and process the remaining 90%
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immediately or can be scheduled. 3. If it’s not urgent, and it requires a considered response, then schedule it for the first two hours tomorrow, or another morning later in the week. 4. Leave the rest until later in the day. 5. Get rid of stuff that has already been handled or is old. This is another task to leave until later in the day. This is about shifting your usual patterns and cycle of habits. Remember, if you are someone who responds immediately to all emails, then people come to expect that. Then, if you don’t reply to something within 30 minutes, you’ll get another email or a phone call wanting to know why you haven’t responded to the email. When you delay your email, then you start to form a new and improved habit and you protect your most valuable time in the morning for your ‘real work’.
Your email inbox is no different from the old-fashioned in-tray on your desk … we need to be more mindful of when we process it, respond to it and complete it that don’t require your brain to be at capacity. (And, given that 80% of your emails are probably a waste of your time anyway, there’s not much at stake here.) But the very idea of not checking your emails until after lunch is scary! ‘What if there is something important that I need to respond to?’ The point is that your email inbox is no different from the old-fashioned in-tray on your desk: it’s the way that work comes to you. But we need to be more mindful of when we process it, respond to it and complete it.
Scan it and move on To combat FOMO (fear of missing out on something important), scan your email first thing in the morning and make some conscious decisions about what requires action and when, following these five steps: 1. Run down the inbox and identify the 10% that require a considered response. (Colourcode senders so you can quickly identify the emails from your boss.) 2. Determine if those responses are needed
3 tips for reducing email now 1. Send fewer emails. Try other communication methods, such as phone calls, personal visits or instant messenger. 2. Improve the quality. Use the subject line more effectively. For example, rather than say, “When can we meet?”, you could say, “Can we meet on Thursday at 2?” 3. Action items. Create a ‘Done’ folder in your inbox. Once an email has been read or actioned, drag it across. If you need it later, you will be able to find it.
Donna McGeorge is a speaker, author and mentor who helps people make their work work. Using a creative, practical approach, she improves workplace effectiveness while challenging thinking on leadership, productivity and virtual work.
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FEATURES
MARKETING
Building rock star confidence There are seven ways you can create a memorable and exciting marketing strategy for your business. All you have to do is think like Freddie Mercury, writes Nicola Moras
WE ALL get inspired by the confidence that oozes out of a rock star when we see them on stage. We love it when they step into their own and take us on a journey with them throughout their performance. Their mastery over their voice; their certainty and commitment to the performance – we love it when it’s done well. Look at the example of Freddie Mercury – or Gwen Stefani or Madonna – an icon who had the ‘it’ factor: magnetism and confidence. These traits help rock stars cultivate raving fans who throw their money at them for their music, concerts and merchandise. Here’s how we can emulate this in our own marketing and create our own raving fan culture.
1. Own your point of difference The thing that makes people stand out is how they enhance and highlight their point of difference. For those of us who are marketing ourselves online, the main point of difference we have is ourselves. Think about
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BROKERS ON AGGREGATORS
2020
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FEATURES
MARKETING your knowledge, your experience, your lifestyle and even your personal qualities (for example you may be energetic or analytical) – you can accentuate some of these features so you stand out and can be seen.
2. Create a rock star mindset Musicians know that for most of them it takes a long time to ‘make it’, and they know that they’re going to need to persist. There are no quick fixes or magic pills when it comes to marketing yourself online. You need to choose to be positive about the fact that it requires you to be consistent and persistent. At times it will mean that you need to do something different and reinvent the way you show up online – a bit like Taylor Swift did when she transitioned from the country music genre to pop. Pivoting makes sense if what you’ve been doing isn’t working. It doesn’t make you a failure. Be brave like a rock star and share your opinions on the issues that are important to you and to your audience.
3. Know your audience AC/DC would be unlikely to play to the audience of an opera, just like an opera singer is unlikely to wow the audience at a heavy metal concert. When it comes to your marketing, you’ve got to know who you’re talking to, so they can enjoy what you’re saying, otherwise it can come across like you’re shouting at them – and even worse, out of key!
4. Connect and engage with them Every fan loves it when the lead singer of the band singles them out to speak to them on stage or catches their eye. It’s like a rush of adrenaline goes through their body as they feel that connection. Your audience online can feel the same way about what you’re putting out there when you acknowledge them personally. Social media isn’t like a crowd of faceless humans. They are real people watching and listening to you. Help them feel connected by speaking with them, not at them.
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AC/DC would be unlikely to play to the audience of an opera, just like an opera singer is unlikely to wow the audience at a heavy metal concert. When it comes to your marketing, you’ve got to know who you’re talking to
5. Grow your presence strategically
7. Scale it and create a community
When artists are trying to be heard and seen, they tend to play anywhere they can get a gig, which isn’t very strategic. If you play your music in the wrong venue, you risk the rotten tomatoes being thrown at you or being booed off stage. Be strategic about where you’re going to market yourself. If your audience is a professional one, then you’d be wise to invest some time in marketing yourself on LinkedIn. If they’re more relaxed and your products photograph beautifully, I’d suggest looking at Instagram. Facebook is the only platform that I tell every business owner to be on. There are 2.37 billion active monthly users on the platform, and 1.49 billion of these are active daily users. I can guarantee you that there is enough of your ideal audience on Facebook. You need to be on there.
Audiences love it when musicians create great concerts and merchandise. Concerts bring people together who all like the same thing. It’s like a community is created of people with the same interest. Creating communities online where your audience can get together is super important. Humans have a core desire to belong and to be with like-minded people. Create the space in your marketing to make this happen. Consider how you can scale your marketing by offering your audience a group or a space to ‘hang out in online’. (Facebook groups are a great way of doing this.) This is where your raving fans are going to come together and sing your praises. To market yourself like a rock star, you’ve got to take on the mindset of a rock star and emulate the way that they have built up their personal brand. This is where your marketing, your opinions and your content come in. Have fun with it!
6. Be consistent with your content We don’t tend to fall in love with one-hit wonders, often thinking months down the track, “Who was it that sang that song?” We want to be remembered, and that’s going to need consistent content. Post daily and make sure you’re adding value for your audience with the content you’re putting up there.
Nicola Moras is an online visibility expert and the author of VISIBLE, a guide for business owners on how to generate financial results from social media and digital marketing. She helps clients around the world achieve visibility, impact and profits, enabling them to become ‘professionally famous’ online. Find out more at www.nicolamoras.com.au.
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FEATURES
BROKERAGE INSIGHT
Broking for a better industry future Going straight from school to broking, Otto Dargan of Home Loan Experts has been experiencing the highs and lows of the mortgage world for the better part of 20 years. He talks to MPA about how he built his business and why talent shortages need to be addressed NOT MANY mortgage brokers start their career straight out of school. It’s often a path that comes later in life after dabbling in other careers. But Otto Dargan has never been ordinary. As a result, neither has the company he founded in 2006 – Home Loan Experts (HLE). “I briefly studied science at university, but I dropped out after six months,” Dargan says. “I knew what I wanted to do, and broking didn’t need a science degree. That said, I’ve always tried to incorporate scientific thinking into the way I approach broking. Being able to look at problems objectively and approach them methodically gives you a distinct advantage.” Dargan worked with another broker for four years, which he describes as a “great learning experience”. But he realised that he needed to strike out on his own to achieve what
he wanted, and eventually left to establish his own business in 2006. “Originally, I didn’t intend to grow it very
“I’m a strong believer that the challenges that you are facing are actually your greatest opportunities in disguise” Otto Dargan, Home Loan Experts much,” Dargan explains. “I thought we might eventually expand to three staff! But we kept hitting our goals much sooner than I expected, and we had to keep growing to manage the demand from our customers.” Within a few years, Dargan realised he would need to expand in other ways that he
THE FUTURE AND FINTECH Otto Dargan sees the introduction of the best interests duty as a big focus for the industry and a great opportunity to not just do what’s required but raise professionalism in the industry as a whole. Accordingly, over the next 12 months, Home Loan Experts is working on evolving into a fintech. “We’ve just finished building out a new training academy, and we’ll be training more of our team to be credit analysts, brokers and managers,” Dargan says. “We’ve built the foundations required for scale, and we’re going to continue to grow while focusing on what we’re good at.”
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hadn’t anticipated. In 2012 he went trekking in Nepal, and made friends with a local in the process. “I ended up offering him a job on the
spot, and that’s how HLE Nepal was founded,” Dargan says. Fast-forward eight years and the team in Nepal has grown to 170 staff, all helping service the needs of Australian clients and also providing support services to other mortgage brokers. Today, Dargan sees HLE as a business that is focused on helping people from all walks of life get into the property market – often first home buyers and people outside the normal lending criteria. “We have a situation in Australia where lots of people are let down by the major lenders,” Dargan explains. “Their personal situation might be complex, or they might fall outside of standard lending criteria. Personally, I love to be able to help someone get into the market when their bank has said it can’t be done. That’s when I know my work as a broker is
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FAST FACTS Company: Home Loan Experts Founder: Otto Dargan Location: Rhodes, NSW Year founded: 2006 Services offered: Non-conforming loans, first home buyers, and outsourcing services for mortgage brokers Number of employees: 195 Awards: Australian Mortgage Awards 2019 – Australian Brokerage of the Year; Australian Mortgage Awards 2015 – Best Community Engagement; HRD Employer of Choice 2015
making a real difference to someone else’s life.” It’s a desire to help that has been at least partially born out of Dargan’s own business adversities. Less than two years after HLE was founded, the GFC hit, throwing his plans into “chaos”. After all, it’s when these challenges occur that borrowers are going to need help the most, to deal with the changing circumstances. “The GFC was scary, but it ended up being a good thing for our business,” Dargan says. “The market went crazy, and a lot of homebuyers needed help – the banks were all over the place, so the role of the broker became far more important as a result.” Dargan believes the role of the broker has only continued to expand in importance since
then. Though changes haven’t reached the scale of the GFC, the market has still had its ups and downs over the years. “In the years since, we’ve transformed from being salesmen to being true professionals, and that’s something I’m very proud of,” he says. “Borrowers are better informed than ever now, but the complexity of the loan market has only continued to increase. Our skills are even more important now than they were in the GFC.” Dargan believes this trend is likely to continue, and this gives him pause for thought. The average age of an Australian broker is 54, meaning a big chunk are likely to be looking to exit the industry in the next decade or so. “A lot of future talk about the broking
industry is focused on tech, compliance and regulations,” he says. “But truthfully, the biggest issue we’re facing is a shortage of talent.” Dargan is also keeping a close eye on the the wider situation around the COVID-19 pandemic. The impact is only just beginning to be felt, and Dargan believes brokers need to create a pandemic strategy with a focus on health, business continuity, helping past clients and serving the community. “The recent escalation of the COVID-19 pandemic puts brokers in a unique position to help soften the blow to the economy by being there for our customers when they need them most,” Dargan says. “Most young people haven’t seen a recession and aren’t prepared for what is coming. As their trusted adviser, we’re able to guide them through this difficult time.” Nonetheless, he remains optimistic about broking in the coming months and years. “I’m a strong believer that the challenges that you are facing are actually your greatest opportunities in disguise,” Dargan says.
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PEOPLE
OTHER LIFE
TELL US WHAT YOU GET UP TO Email rebecca.pike@keymedia.com
230
Number of lunches Kaley Chu has had
4.5 hours The longest lunch Chu has enjoyed
30
Number of people Chu first invited to lunch
THE LADY WHO LUNCHES Two years ago, Kaley Chu was a shy BDM who never thought she would be the public speaker she is today COMMUNICATION AND relationships are an important part of a BDM’s job, but for Equi Wealth’s Kaley Chu, her intense shyness once meant she struggled to speak to people. After finding herself in an embarrassing situation in a meeting because of this, she decided to change. “I set myself a New Year’s resolution: ‘In 2018, I want to have 100 lunches, with 100 strangers’,” she says. Chu started by sending out 30 lunch invitations, and she received three positive replies. She says she was then very grateful to have two supportive bosses who allowed her the flexibility to manage her time. Her first lunch was with a stranger in January 2018, but she has continued the challenge and is now up to her 230th lunch. Two years on, as she celebrates the launch of her book, 100 Lunches with Strangers, Chu says she feels like a different person to when she first began. “I used to be a shy, timid person who wasn’t sure what to say most of the time, with a very small mindset,” she says. “I had no idea what I wanted in life. Now I feel confident that I can connect with anyone, no matter who they are.”
“I have the strength to overcome challenges, no matter how hard they are. I now have goals, a nd I feel great a bout myself”
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We’re here with real life help Supporting people through hard times with humility, a sense of optimism and without judgment is what we are focused on at Pepper Money. We understand that your customers need clear guidance during this unprecedented time of both financial and health strain. To ensure they get the help needed, we have a simple, online Financial Assistance form to make reaching out for help easier, available at pepper.com.au/apply-for-assistance
pepper.com.au/coronavirus The Real Life Alternative Disclaimer: All applications are subject to Pepper’s normal credit assessment and loan suitability criteria. Terms, conditions, fees and charges apply.Pepper Group Pty Ltd ACN 094 317 665 Australian Credit Licence Number 286655 is the servicer of loans by Pepper Finance Corporation Limited ACN 094 317 647
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We’re here when you need us. As strong supporters of the broker community, especially in these challenging times, we’re with you. Our BDMs are available to assist and our digital tools and services can help you keep your business going while you’re keeping your distance. › Your customers can view, sign and return their home loan contracts from the comfort of their couch, in minutes, with Digital Signing^. › Find the best deal for new and existing customers, fast, using our online Customised Pricing Tool. › Easy real-time access to your current Bankwest customers’ home loan information with our Home Lending Portal. › Instantly view our LVR limits and maximum loan amount for most postcodes in Australia with our Postcode and Policy Tool. To find out more about how Bankwest can help or for an update on our range of support measures for home loan and business customers, visit bankwest.com.au/brokers
Important things you should know: ^Excludes home loan transfers. Other exclusions apply. Due to state based laws a Mortgage Form sent via DocuSign® is required to be printed, signed and returned via reply paid mail. Customers must have access to a device (computer or tablet recommended) with internet and email access. DocuSign is a registered trademark of DocuSign, Inc. For Bankwest home loans lending criteria, fees and charges apply. Terms and conditions apply and are available on request. Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL/Australian credit licence 234945. CS-44 250320 220(w)x278(h)-v2