MPA 24.03

RISING TO THE CHALLENGE Aggregators back brokers in competitive market

MPAMAG.COM/AU ISSUE 24.03

AUSTRALIA’S TOP BROKERAGES Best broker businesses unveiled

BROKERS ON AGGREGATORS Survey reveals how networks performed

DRIVING BIG AUSSIE WINS

Brokerages reap the rewards of hard work and a pioneering support model Brad Cramb Lendi Group

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JULY 2024

CONNECT WITH US

CONTENTS

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

UPFRONT 02 Editorial

Record market share shows high trust in brokers

44 FEATURES

HITTING NEW HEIGHTS

31

Leading aggregators discuss their support for brokers as market share continues to rise

04 Statistics

Where homebuyers are looking to put their money

06 Opinion

Sharing opinions is fine, but avoid absolutes about interest rates, says Mark Bouris

FEATURES 16 Alt-doc lending

Non-banks share their knowledge of alt-doc lending and the advantages for brokers and clients

64 Team culture

SPECIAL REPORT

BROKERS ON AGGREGATORS 2024

Brokers reveal the aggregators that are winning their loyalty in MPA’s annual survey

How empowering people to share their views can build a dynamic team

21

66 Ethical leadership

TOP BROKERAGES

PEOPLE

SPECIAL REPORT

BIG INTERVIEW

BRAD CRAMB

MPA puts the spotlight on Australia’s most outstanding brokerages in 2024 and some of the secrets to their success

Lendi Group’s chief distribution officer explains how the network has helped propel the growth and performance of Aussie stores, with a record nine recognised as Top Brokerages this year

Tips for navigating ethical challenges as a business leader and why it’s important to get it right

70 Brokerage insight

The appeal of work flexibility and strong aggregator support drew Jennifer Lemme to success as an LNS Wollongong broker

72 Other life

Solvere Wealth director John Pidgeon blends AFL coaching and mortgage expertise to empower others

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12 FEATURES

REFINANCING IN FOCUS

Experts from two major banks give their insights into current refinancing trends and prospects for brokers

MPAMAG.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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21/06/2024 9:11:43 am

UPFRONT

EDITOR’S LETTER

Homebuyer trust is all that matters

R

ecent mainstream media commentary has painted mortgage brokers in an unflattering light, depicting them as wealthy, brash and beating the banks in a battle for the home loan market.

Opinion columns have suggested that brokers are raking in the cash as property prices rise, claiming that they are earning much more than bankers and that the average Sydney broker is making over $670,000 annually in upfront and trail commissions. The articles claimed that commissions paid to brokers weren’t clearly spelled out to borrowers, and that homebuyers were paying more than they should for their mortgages because banks factor in broker commissions when pricing their home loans.

Not surprisingly, the mortgage broking industry has been outraged by the comments, with LMG executive chairman Sam White, MFAA CEO Anja Pannek, FBAA managing director Peter White and other leaders defending brokers and labelling the depiction of the way brokers operate as misleading and inaccurate.

Brokers know the truth – that they act with their clients’ best interests at heart (it’s called best interests duty, after all); that many of them don’t earn anywhere near the suggested average incomes; that their expertise and hard work has helped millions of

The numbers don’t lie, and Australians are voting with their feet: brokers wrote a record 74.1% of new home loans in Q1

www.mpamag.com/au JULY 2024 EDITORIAL

SALES & MARKETING

Editor Antony Field

Publisher Claire Tan

Writers Kim Champion, Mina Martin Contributors Mark Bouris, Michelle Gibbings, Paige Williams Lead Production Editor Roslyn Meredith

ART & PRODUCTION Designers Cess Rodriguez, Noel Avendano, Joenel Salvador Customer Success Manager Isabella Concepcion

CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley Chief Commercial Officer Justin Kennedy Chief Revenue Officer Dane Taylor Director – People and Culture Julia Bookallil

Customer Success Executive Shara Cruzat

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customers get a better deal on their home loans; and that they’re not at war with the banks – lenders are competing with each other.

The numbers don’t lie, and Australians are voting with their feet: brokers wrote a record 74.1% of new home loans in Q1 2024, the MFAA reports, their highest market share ever.

Brokers continue to provide a valued service to their customers, who rely on their knowledge of the market and its intricacies to help them find the most suitable home loans. But it goes beyond a simple transactional relationship – brokers are there to help educate clients about their finances and assist them in achieving their life goals, whether that means buying a business, purchasing an investment property, or helping a family member get a car loan. Many brokers are diversifying beyond home loans and cementing deep and trusting customer relationships.

In this edition, MPA highlights all the fantastic work brokers and their partners do.

The 2024 Aggregators Roundtable brought together the heads of Australia’s leading broker networks for a positive discussion about industry challenges, diversification, payroll tax and succession planning. MPA also takes an in-depth look at alt-doc lending and the refinancing market, and reveals the winners of this year’s Top Brokerages in Australia. Enjoy reading the July issue!

Antony Field, editor, MPA

2

Mortgage Professional Australia is part of an international family of B2B publications and websites for the mortgage industry AUSTRALIAN BROKER

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

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UPFRONT

STATISTICS AUSTRALIA REAL ESTATE IN FIGURES

1.2 million

Number of dwellings in Australia

BUYER SHIFT TO UNITS

HOUSES VS UNITS: VALUE GROWTH, HOUSES

Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra Combined capitals Combined regions National

CoreLogic’s Housing Chart Pack for May 2024 showed a shift towards units due to soaring house prices.

Unit demand has risen in capital cities, with house values up 40% since March 2020 and units up 17.9%.

$10.6trn

1% -0.3% 2.7% 3.2% 6% 0.8% 0.9% 1% 1.7% 2.1% 1.8%

Total value of residential real estate

HOME LOAN VALUES SOAR New housing loans rose 17.9% since March 2023, reaching $27.6bn. This growth reflects larger average loan sizes due to rising house prices. Investor loans increased 31.1% annually, ABS figures showed.

$2.3trn

Outstanding mortgage debt in Australia

HOUSING FINANCE LOAN COMMITMENTS BY PROPERTY PURPOSE AND STATE, SEASONALLY ADJUSTED – MAR 2024 Aus*

NSW

Vic

Qld

SA

WA

Tas

NT

ACT

Value ($bn)

17.5

5.4

4.9

3.6

1

1.9

0.3

0.08

0.3

Value change ($m)

470

126

97

192

27

112

41

10

-80

Value % change**

2.8

2.4

2

5.6

2.8

6.3

17.8†

13.6†

-19.2†

Number change

427

-11

174

74

-35

36

18

-9

4

Number % change **

4.5

-0.5

5.8

4.2 -5.9

2.8

12.9†

-14.5†

1.6

Value change ($m)

369

236

4

124

19

53

2

4

1

Value % change **

3.8

6.2

0.2

6.2

3.6

5.3

2.2

14.3†

0.7

Owner-occupiers

Owner-occupier first-home buyers

56.2%

Household wealth held in housing

Source: CoreLogic Monthly Housing Chart Pack, May 2024

Investors

* Total Australia levels do not necessarily equal the sum of states, due to independent seasonal adjustment; ** All movements are on a month-to-month basis; † A smaller and more volatile series Source: Australian Bureau of Statistics

4

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AP

H,

TOP INVESTOR MARKETS

APRIL QUARTER

Queensland, Western Australia and New South Wales lead in property investment, according to the Australian Property Investor’s Q1 2024 Property Sentiment Report. Three quarters of survey respondents saw these states as having the best investment prospects.

UNITS

1.4% 0.4% 5% 4.5% 6.5% 0.6% 1.1% 1.1% 1.8% 2% 1.8%

STATES WITH BEST INVESTMENT PROSPECTS

2% Northern Territory

24% Western Australia

32% Queensland

8%

South Australia

20%

New South Wales

9%

Australian Property Investor Property Sentiment Report, Q1 2024

Source: CoreLogic Monthly Housing Chart Pack, May 2024

ADELAIDE LEADS POPULAR SUBURBS Driven by its affordability and attractive lifestyle, Adelaide secured eight of the 10 most-viewed suburbs in April 2024, surpassing traditional Sydney and Melbourne hotspots, PropTrack reports.

3%

Australian Capital Territory

Victoria

HOMEBUYER DISCOUNTS SURGE Home prices are peaking, but some regions are seeing more homes sold at a discount. Despite a 0.23% price rise in April, buyers in certain areas are benefitving from increased vendor discounting and homes sold below the asking price, PropTrack says.

REGIONS WITH LARGEST INCREASE IN SHARE OF HOMES SOLD BELOW ASKING PRICE

SUBURBS WITH HIGHEST AVERAGE VIEWS PER LISTING – MAY 2024

SA4 region

Metro/Regional

Share of sales below asking price – April 2023

Share of sales below asking price – April 2024

Percentage point change

Sydney – City and Inner South

Metro NSW

33.3%

50.8%

17.5

RANK

CITY

Riverina

Regional NSW

61.5%

77.4%

15.8

SUBURB

1

Torrens Park

Adelaide, SA

Murray

Regional NSW

57.5%

69.9%

12.3

2

Bridgewater

Adelaide, SA

67.4%

76.9%

9.5

Hawthorn

Adelaide, SA

Warrnambool and South West

Regional Vic

3 4

Coromandel Valley

Adelaide, SA

North West

Regional Vic

45.8%

55.1%

9.3

5

Mile End

Adelaide, SA

Ballarat

Regional Vic

63.5%

72%

8.5

6

Marino

Adelaide, SA

Bendigo

Regional Vic

50.6%

58.7%

8.1

7

Belair

Adelaide, SA

25%

32.9%

7.9

Golden Grove

Adelaide, SA

Sydney – Northern Beaches

Metro NSW

8 9

Springfield

Sydney, NSW

Sydney – Ryde

Metro NSW

25.8%

33.3%

7.5

10

Middle Park

Melbourne, Vic

Shepparton

Regional Vic

47.4%

53%

5.6

Source: PropTrack

Source: PropTrack

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20/06/2024 10:18:01 am

UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email antony.field@keymedia.com

Navigating interest rate uncertainty Given the unpredictability of interest rate changes, brokers must tread carefully when sharing their views with customers, says Mark Bouris AS THE cost of living crisis persists, intense speculation about interest rates endures. In any corner of the internet or traditional media, you can find two economists suggesting the opposite conclusion. Heck, I’ve even seen some commentators predict impending rate hikes this year.

It’s obvious why: it gets clicks.

The reality is that interest rates impact all corners of Australian life, and articles predicting rate changes grab the attention of concerned mortgage holders, who in turn reach out to their mortgage brokers to ask about where rates are headed.

So, how do you navigate this challenge as a mortgage broker?

You must avoid absolute statements about the direction of interest rates. As we’ve seen, the ‘expert’ can’t accurately predict where rates are headed.

Of course, it’s fine to share your opinions and reasoning behind your thought process, but to present these beliefs as advice is where alarm bells start ringing.

If pressed for an opinion, I would suggest that, until substantial and consistent economic data justifies a shift, a period of interest rate stability is the most probable scenario for the short to medium term. Most economists and financial markets anticipate a period of interest rate stability.

Sharing opinions is fine, but avoid absolutes about interest rates. Similar risks emerge if you are asked for advice on the direction of property prices. Remember, you are providing credit advice, not investment guidance.

My take? Supply shortages appear to be outweighing the negative effects of higher interest rates in most Australian markets.

6

With supply issues unlikely to be resolved soon and interest rates steady, the current trend of modest property price growth should continue.

However, this will vary across markets.

The rental squeeze, expected interest rate stability and continued modest property price growth should create favourable conditions for first home buyers. However, the challenge is obvious: affordability in desired locations.

relief and is a mutually beneficial solution for both borrower and broker. However, what sets you apart from the pack is how well you react when potential solutions are not so easy to come by.

So, step up.

How you can assist: 1. Utilise the lender panel: Lenders offer reduced interest rate buffers for refinance customers, providing a ‘wow’ moment for your client. Offering solutions clients may not know about is part of why they come to you.

2. Assist non-qualifiers: Exploring options and presenting justifications for a rate review approval, such as a significant drop in the estimated LVR since origination, or suggesting a loan term reset can produce outstanding results for clients.

3. Negotiate effectively: If you introduced the current loan, negotiate with the

If pressed for an opinion, I would suggest that, until substantial and consistent economic data justifies a shift, a period of interest rate stability is the most probable scenario Set yourself apart from the pack by leveraging these conditions and offering advice to those considering their options for entering the market. Keep abreast of first home buyerspecific incentives in your market and offer obligation-free advice, even for those not ready to transact. This will help you build a great customer and, importantly, referral base.

Be it for customers you have already assisted or potential new borrowers reaching out to you, helping someone in their hour of need to navigate one of the largest financial decisions of their life creates an exceptionally loyal customer base.

Now is the moment to rise to the occasion and deliver the transparency and clarity that mortgage holders and prospective homeowners urgently need.

Refinancing clients to a lower-rate product with lower repayments, possibly set up with a new, longer loan term, can provide obvious

lender on behalf of your client. If not, provide clients with the necessary information for direct negotiations.

The short-sighted may see this as unpaid work; however, the reality is that this is the groundwork for creating an exceptionally loyal client base.

Naturally, this sort of work does not pay the bills, so for any brokers suffering from a downturn in revenue, I would implore you to diversify your income, if you have not already done so, by looking at commercial and equipment finance as well as other potential revenue opportunities.

Mark Bouris AM is an Australian entrepreneur who has been innovating for years, challenging the business landscape with disruptive models that help Australians succeed. He is the executive chairman of Yellow Brick Road.

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20/06/2024 10:53:24 am

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20/06/2024 10:53:32 am

PEOPLE

BIG INTERVIEW

BRAD CRAMB: DEDICATION PAYS OFF FOR FRANCHISEES Aussie Home loans is celebrating after nine Aussie stores were named in the 2024 Top Brokerages list. Lendi Group’s Brad Cramb discusses the great result and how the network supports its franchisees and brokers to achieve success

LENDI GROUP chief distribution officer Brad Cramb couldn’t be prouder of Aussie Home Loans franchisees, with a record nine stores featured in MPA’s Top Brokerages of 2024.

That means a whopping 18% of the 50 brokerages featured on this year’s winners’ list were Aussie stores and the franchise network has tripled its performance from

in these stores, and customers can walk into their appointments with certainty that they’re dealing with a trusted expert.”

Cramb says the nine incredible businesses recognised in 2024 is a significant uplift from the three last year. “We know that there are several stores who wouldn’t have been too far off qualifying, so we’re hopeful of seeing more entries next year.

“Aussie is providing Australians with the platform to build a thriving broker business, while also giving the Australian public the support they need to secure their homeownership dreams” last year when three stores made the top 50.

Cramb says for Aussie franchisees this recognition is a wonderful payoff for their tireless dedication to growing their businesses and supporting their customers.

“We know our winning franchisees are delighted to have received this recognition, and they’re all very much deserving,” he says.

“This kind of recognition also adds authority to the expertise of our franchisees and brokers

8

“It’s great recognition that Aussie is providing Australians with the platform to build a thriving broker business, while also giving the Australian public the support they need to secure their homeownership dreams.”

Of the nine Aussie stores, six are owned by multi-site franchisees.

“One of the primary reasons people enter a franchise partnership is to leverage an established brand and centralised support to

achieve business growth, so we’re proud to see so many of our franchisees driving growth and scale in their businesses,” Cramb says.

He says the Aussie retail channel drives significant volume for Lendi Group and is critical to its success.

Given Aussie’s strong commitment to helping franchisees achieve growth, new territory opportunities are strictly capped.

Cramb says Aussie has identified a series of “hot territories in high-opportunity areas with significant growth prospects”.

“These provide an opportunity for prospective franchisees to service the local area and become the CEO of their own business.”

While globally retail businesses cut costs and close branches, Cramb says Aussie is continuing to invest heavily in revolutionising the retail experience for franchisees, brokers and customers. This includes refreshing signage and storefronts, piloting interactive new touchpoints in-store and executing campaign activity to drive customer foot traffic.

“Following the migration of our network onto the new Aussie Platform in 2023, we’re able to facilitate seamless in-store-to-online experiences for our customers,” says Cramb.

The aim is to elevate the functionality and appeal of Aussie stores without excessive cost.

To expand the reach of franchisees and

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PROFILE Name: Brad Cramb Title: Chief distribution officer Company: Lendi Group Years in the industry: More than 20 years’ senior leadership experience. Has been at Aussie/Lendi Group since 2017 Fun fact: On weekends, Cramb swaps his business suit for a wetsuit and goes surfing with his two sons Highlight of working at Lendi Group: “Seeing the value of the Aussie-Lendi merger come together in the last 12 months has been a huge highlight.

Watching our Aussie franchisees and brokers embrace new technology and leverage pioneering support models to drive growth in their businesses is truly inspiring.”

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20/06/2024 11:05:28 am

PEOPLE

BIG INTERVIEW brokers in their local areas, the ‘Great Aussie Summer Giveaway’ was held in late 2023. It was Aussie’s largest-ever competition, with a prize pool of $250,000.

During the launch week, the record for customer appointments held in a single week was broken.

“We leveraged the campaign to support

our new Aussie mobile app, downloadable property reports and credit score checks as a means of driving enquiry and facilitating new engagements.”

As Australia’s largest retail mortgage broking network, Aussie’s footprint of over 1,000 brokers and 220 stores means it can serve customers nationwide, Cramb says.

“One of the primary reasons people enter a franchise partnership is to leverage an established brand and centralised support to achieve business growth” stores in driving engagement at grassroots level, matching their local area marketing spend dollar for dollar,” says Cramb.

Aussie contributed $60,000, allowing brokers to “flex their lead-generating muscles” with reduced financial barriers.

The Great Aussie Giveaway returned in May with another $200,000 in prizes, and brokers and franchisees embraced the campaign to reach more people.

“We’ve also equipped our brokers with a suite of product-led sales tools, including

“Importantly, we offer our customers choice – whether they would like to engage with their broker in-store or virtually, via a mutually convenient location, or even in their own home or workplace.”

Aussie franchisees and brokers also get involved in their communities by sponsoring footy teams, donating to schools, connecting with local businesses, and more.

When it comes to building growth for Aussie stores, Cramb highlights the group’s Platform technology, Platform Plus and

DANNY BLAIR, AUSSIE IPSWICH GROUP No. 45, MPA Top Brokerages 2024 Danny Blair joined Aussie as a store broker over 12 years ago, before venturing into franchising at Aussie Ipswich in 2013. He has grown his portfolio and established a prominent retail presence in the west Brisbane corridor, with stores in Mount Ommaney (opened 2020), Kenmore (existing store purchased in 2021) and Forest Lake (opened 2023).

Blair has expanded his team to include three franchise partners, 14 brokers and five administrative staff.

He is now in the final stages of acquiring his fifth Aussie store, which adds another three brokers to his team.

He fully leverages Aussie’s Platform Plus model to streamline operations across his stores, and the proof is in the results, with his group of stores experiencing a 17% uplift in settlements in 2023.

Blair is now the CEO of his business, and rather than actively writing loans, he focuses on accelerating customer growth, providing career opportunities for local talent, and developing his team to achieve their own success.

10

supported model; connecting brokers and customers in new ways (such as via the Aussie mobile app); and seamless in-storeto-online experiences.

“It’s about scalable systems and processes, growing footprint and driving efficiency and productivity.”

BELINDA WOODLEY AND MATTHEW ROSE, AUSSIE PROSPECT

No. 15, MPA Top Brokerages 2024 Woodley and Rose have been in partnership as franchisees of Aussie Prospect for the last 11 years, and for the past nine consecutive years, Prospect has ranked as the No. 1 store in the Aussie network of more than 220 stores. The pair have ascended an impressive 17 places in MPA’s Top Brokerages this year, after ranking at No. 32 in 2023.

Woodley and Rose were part of the first cohort who opted in to the Aussie Platform Plus model when it began rolling out to stores in 2023, ready to further accelerate their growth. The duo also invested heavily in their business last year, with Aussie Prospect undergoing significant renovations to now feature multiple consultation spaces, back-office workstations for up to 26 brokers and team members, and new design elements to enhance the broker and customer experience.

Harnessing Aussie’s Platform Plus model allows Woodley and Rose to spend more time mentoring their brokers. The pair are working towards a goal of $1 billion in annual settlements.

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20/06/2024 11:05:47 am

FEATURES

SECTOR FOCUS: REFINANCING

Brokers urged to analyse clients’ needs While refinancing has dropped markedly, there are still borrowers rolling off fixed rates and others looking for better loan options who need brokers’ support THE REFINANCING BOOM is well and truly in the rear-view mirror, and activity has dwindled since the peak in mid-2023.

It will be no surprise to mortgage brokers as the data backs up what many will have experienced – fewer clients are refinancing their mortgages.

The PEXA Refinance Index, which measures the volume of refinances, shows that as of 9 June 2024, the level of refinances was down 28.8% compared to the previous year, although it had risen almost 12% quarterly.

ABS lending indicators for April show that the value of external refinancing for total housing was 16.3% lower than a year prior.

For owner-occupier housing it was down 22.8% and for investor housing it fell 2.8%.

There are a number of factors behind the drop-off in refinancing activity. Cashback offers from lenders have declined considerably; the Reserve Bank hasn’t changed the official cash rate since October 2023; borrowing capacity has eroded; and due to serviceability constraints, some mortgage holders are unable to refinance.

On the flip side, brokers are in a strong position to help borrowers, enjoying record home loan market share of 74.1%, with more and more Australians relying on their expertise to get them a better loan deal.

There are still opportunities for brokers to assist customers wanting to refinance, especially those who are only now coming off their fixed rate loan terms.

To understand what’s happening in the refi-

12

nancing market, MPA sought expert insights from Natalie Smith, general manager at ANZ Retail Broker, and Johnny Lockwood, general manager broker and strategic partnerships at BOQ Group, which includes ME Bank.

Refinancing trends Refinancing volumes peaked around June 2023, following the cycle of RBA interest rate increases that led to customers seeking better rates.

“External refinancing has declined notably since peaking in 2023,” Smith says. “It’s likely that there are less borrowers seeking to refinance to a loan with lower rates, with most

rates not changing over the last six months.”

There are also fewer borrowers rolling off fixed-term loans and looking for the lowest available variable rate loan, with expiring fixed rate loans having peaked in 2023.

Lockwood says there was a surge in homeowners refinancing their home loans early last year. “As borrowers moved from lower fixed rates to higher variable interest rates, they sought more competitive loan options and attractive cashback offers, resulting in record levels of refinancing activity,” he says.

Momentum began to taper off in the second half of 2023 as lenders, who were facing increased funding costs, started to

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MARKED DROP IN REFINANCING Volume of refinances, year to June 2024 280 260 240 220

INDEX

200 180 160 140 120 100 80 Jul 23

Aug 23

Sep 23

Oct 23

Nov 23

Dec 23

Jan 24

Feb 24

Mar 24

Apr 24

May 24

Jun 24

Source: PEXA Refinance Index, 11 June 2024

scale back their acquisition strategies. Some lenders reduced or removed cashback offers that had previously enticed borrowers to refinance, leading to a decline in loan volumes, Lockwood says.

“With interest rates likely at peak levels, borrowing capacity has weakened … Coupled with the challenges of higher borrowing costs, ongoing cost of living pressures and economic uncertainty, the demand for home loans is expected to remain subdued until there is some relief in interest rates.”

For brokers, it’s important to understand which customer segments are seeking to refinance now. At ANZ, Smith says most current ‘refinance’ customers are owneroccupiers. They equate to about 70% of the refinance book, with investors at 30%.

“No matter their circumstances, customers want to deal with brokers who understand their needs, provide accurate information and explain their loan options clearly,” she says. “Whilst borrowers are reviewing their loans more regularly, they still value the support, choice and convenience that brokers have to offer.”

Smith says brokers can find ANZ product information, rates and offers on the ANZ

“ME continues to see predominantly low-LVR owner-occupied refinancers ...

However, there is an emerging upward trend in the higher-LVR segment, specifically for owner-occupied loans exceeding 80% LVR” Johnny Lockwood, BOQ Group Broker Portal and anz.com. The bank has also introduced the ANZ Home Loan Offer Selection tool, a digital process available through the ANZ Broker Portal. Smith says it’s a time-saving and convenient way for brokers to request available home loan offers for their eligible customers.

“Now is a great time to consider ANZ for your home loan customers eligible for a great refinance offer. Refinance your customer’s eligible home loan of $250,000 plus and 80% or less LVR to ANZ and they could get $2,000 cashback*.”

ANZ is aware that some brokers are working with self-employed customers, Smith says,

and “where these customers have a home lending need, we have a range of income verification options for self-employed applicants”.

Lockwood says, “ME continues to see predominantly low-LVR owner-occupied refinancers in the market. However, there is an emerging upward trend in the higherLVR segment, specifically for owneroccupied loans exceeding 80% LVR.” He advises brokers to take the time to thoroughly understand their clients’ unique situation before presenting them with loan options.

“There is no one-size-fits-all approach when it comes to choosing between fixed and variable rates; in fact, splitting between the two

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FEATURES

SECTOR FOCUS: REFINANCING

ANNUAL DECLINE IN EXTERNAL REFINANCING In April 2024, in seasonally adjusted terms, the value of external refinancing: for total housing rose 1.7% to $16.3bn but was 16.3% lower year-on-year for owner-occupier housing fell 0.4% to $10.2bn and was 22.8% lower year-on-year for investor housing rose 5.5% to $6.1bn but was 2.8% lower year-on-year Source: ABS Lending Indicators, April 2024

could be a beneficial strategy for certain clients, balancing stability and flexibility in times of uncertainty,” Lockwood says.

“Keep an eye out for customers who have built up equity in their home, as you might be able to secure them more competitive loan terms.”

with knowledge and options well in advance.

Lockwood says new procedures also help the contact centre team identify potential triggers for home loan retention. And rate rise navigation hubs have been launched, offering calculators, tips and tools to educate customers about rate changes and the options available.

Smith says about 5,100 customers who were refinanced to ANZ and introduced via a broker are yet to roll off low-rate fixed term loans.

“It’s important that we continue to provide a compelling proposition for our existing customers as well as for those looking to refinance through a broker. Our existing customers want confidence that they’re receiving a good deal, so ANZ proactively contacts brokerintroduced customers with expiring fixed rates at different points of their journey.”

a convenient refinance process for eligible customers, with less paperwork.

It’s available to eligible PAYG borrowers, and self-employed customers who meet ANZ’s company wage policy, who are switching between similar term loans or to a lower-cost ANZ home loan, where the minimum repayments on the new ANZ home loan are equal to or less than the current repayments on their OFI loan. Certain other eligibility criteria also apply. Smith says because Simpler Switch uses comprehensive credit reporting to verify a customer’s ability to meet their existing commitments, there’s no need to supply any income documents as part of an eligible application.

Lockwood says ME plays a crucial role in BOQ Group’s multi-brand business strategy.

“Customers want to deal with brokers who understand their needs, provide accurate information and explain their loan options clearly” Natalie Smith, ANZ

Fixed rate roll-offs Lockwood says in late 2023 the number of ME customers transitioning off fixed rates reached its peak. “While most of our customers who were on lower fixed rates have now reached maturity, there are still some customers in this category who are yet to transition.”

To support these customers, he says ME maintains a close partnership with its broker network. Fixed rate expiry notifications via email serve as a proactive tool for brokers, alerting them when a shared customer is nearing the end of their fixed rate. “This prompts timely outreach from brokers, enabling them to check in with clients and facilitate pricing requests for retention.”

ME has developed a robust engagement plan tailored for customers approaching fixed rate maturity. It uses multiple touchpoints, including email, phone, mail and SMS, over a 12-month period, to empower customers

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Smith says eligible customers can opt to receive a discount on the applicable variable rate once their fixed rate expires, or to take advantage of ANZ’s current fixed rate offers.

Customers who seek to increase their loan or apply for further lending are referred back to their broker in the first instance. For new customers exploring a better home loan deal through their broker, a streamlined OFI refinance process is available when certain eligibility criteria is met.

Streamlining the refi process Brokers are busy people dealing with multiple clients, so fast turnaround times and efficient loan processes are important.

Smith says ANZ has several streamlined processes for brokers to ensure refinancing is fast and efficient. These include ANZ’s Simpler Switch policy enabling brokers to provide

Focused on simple, low-LVR lending, the bank offers brokers and customers competitive rates and impressive turnaround times.

Broker partners also benefit from the dedicated support of their BDMs. “We are committed to investing in and expanding our ME broker channel,” says Lockwood. “One of the most exciting advancements is the ongoing development of our new digital end-to-end home loan offering, designed with the broker experience as top of mind.”

ME is dedicated to enhancing service efficiency and satisfaction for brokers and shared customers, Lockwood says. * Offer can be withdrawn at any time. Limit of one cashback within any 12-month period. Offer is $2,000 cashback with 80.00% LVR or less; loans with LVR above 80% are not eligible for cashback. Paid within 60 days to an eligible ANZ account.

You must draw down the Eligible ANZ Home Loan(s) within 120 days from applying. Fees, charges, eligibility criteria apply

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• • • •

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FEATURES

SECTOR FOCUS: ALT-DOC LENDING

Lending a hand to the self-employed A large proportion of the Australian population find it difficult to access finance due to their income records and work patterns. However, a growing number of borrowers are discovering a better path through alt-doc loans ALL BORROWERS are facing challenges in the current lending environment. Higher interest rates mean that borrowing capacity has been reduced, and loan serviceability buffers can make it difficult for some people to refinance their home loans.

But these difficulties can seem even bigger for a particular customer cohort – the selfemployed. This segment can include people who are sole contractors, small business owners and gig economy workers.

Not having the usual income patterns and accompanying paperwork that their PAYG counterparts are able to provide can put them at a disadvantage when seeking loans, especially from the major banks.

This is where non-bank lenders and alt-doc lending come in – non-banks specialise in helping borrowers such as the self-employed.

They understand this growing customer segment and can work with brokers to assist clients who would benefit from alt-doc loans.

The self-employed made up 61% of Australia’s total employment base in 2023.

That means there are millions of borrowers that brokers could be helping with their finance needs.

MPA asked Pepper Money general manager mortgages and commercial Barry Saoud and Liberty chief distribution officer David Smith to share their knowledge about alt-doc lending and the advantages for brokers and clients.

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What does alt-doc lending cover?

Saoud says alt-doc loans have emerged as a beacon of hope for a niche yet significant segment of the market: the self-employed.

“These loans are designed to cater to the unique financial situations of entrepreneurs and business owners, contractors, seasonal workers and even property investors,” he says.

“These borrowers often have non-standard income streams or need financial solutions for business debt consolidation, outstanding tax payments or cash flow management.”

These loans can also accommodate borrowers with intricate financial arrangements such as those involving companies or trusts. Saoud says alternative income documents such as a six-month BAS (business activity statement) may be a more accurate reflection of their ability to service the loan.

“Brokers who understand the unique income structures of these individuals have an opportunity to reassure them that there are still options for them.”

“For brokers, alt-doc loan customers offer a chance to tap into a growing market segment and deliver solutions that align with the modern workforce’s financial realities” Barry Saoud, Pepper Money Alt-doc loans are particularly suitable for self-employed individuals and investors who face challenges in providing proof of traditional income, due to fluctuating income or irregular cash flow, says Saoud.

“Alt-doc loans allow them to provide alternative income evidence, such as bank account statements or an accountant’s letter, to support their loan application.”

Smith points out that all borrowers are unique when it comes to their income and financial records.

“Our alt-doc (AltA®, Nova and Express) solutions provide options for those who may not be able to – or prefer not to – satisfy traditional loan application requirements.

Alt-doc loans cater for borrowers who are self-employed, contract or seasonal workers, or

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SELF-EMPLOYED MADE UP OVER 60% OF AUSTRALIA’S EMPLOYMENT BASE IN 2023

5–19 employees

8.9%

20–199 employees

2.5%

200+ employees

0.2%

Self-employing

61.2%

1–4 employees

27.2%

Source: Australian Small Business and Family Enterprise Ombudsman

who may not have access to all the typical financial documents that lenders often ask for.”

Growth in the sector Alt-doc lending is an important part of Liberty’s business, says Smith.

“Demand for alt-doc solutions has been consistent since COVID, and we are starting to see an uplift as small businesses look for flexible solutions to help manage their finances.”

He says small business is the backbone of Australia, but many small businesses are struggling.

“While inflation drives up expenses, increased cost of living is causing decreased consumer spending. And with cash flow and profitability concerns, we are seeing an increase in the need to support small

businesses through alt-doc products.”

Liberty has always taken great pride in its close relationship with the broker channel and the accessibility of its BDMs and credit assessors, Smith says.

“With a dedicated local team, support is only a phone call away, and our teams thrive on working through scenarios with brokers to help them find a way to ‘yes’. ” Saoud says Pepper Money has seen a rising trend in alt-doc applications year-on-year.

“We expect this trend to continue, driven by economic changes and the growing number of mainly self-employed individuals.

“Growth in the alt-doc lending space is also dependent on broker education and understanding of how lenders like us can help their customers who aren’t traditional PAYG Australians obtain a loan.”

Benefits for brokers Alt-doc is no different to recommending a traditional loan, Saoud says. The basic requirements and lodgement process for brokers are virtually the same.

“It’s just that Pepper Money asks for a different type of supporting documentation in order to verify the customer’s income.”

Brokers offering alt-doc loans can expand their market to clients with non-traditional income and help them access flexible loans for debt consolidation or business cash flow management.

The clients that benefit from alt-doc lending are also a good target for cross-selling opportunities, particularly leasing, insurance and equipment finance products, says Saoud.

“Often they are much ‘stickier’ clients with more regular finance needs as their business needs regularly change. For brokers, they offer a chance to tap into a growing market segment and deliver solutions that align with the modern workforce’s financial realities.”

Smith says there is often a misconception that alt-doc or custom loans are more difficult and time-consuming, but there’s little difference when it comes to submitting an application.

“There is plenty of help available for brokers new to this area, including our highly experienced Liberty BDM team who can help walk a broker through the process and equip them with the right skills.”

Liberty is committed to enhancing the knowledge and capabilities of brokers who are currently working with alt-doc borrowers and empower those yet to diversify into this area, he says. “With access to Liberty’s specialised training and support, brokers can discover new opportunities to provide tailored solutions and build their business.”

Value proposition Smith says alt-doc lending requires a highly skilled team, “which we pride ourselves on”.

“Liberty has an operations and BDM team willing to get on the phone and talk through

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FEATURES

SECTOR FOCUS: ALT-DOC LENDING

VALUE OF NEW BORROWER-ACCEPTED LOAN COMMITMENTS* Apr 2024

Month percent change

Year percent change

$29.35bn

4.8%

24.6%

Owner-occupier (a)

$18.49bn

4.3%

18.7%

Investor (a)

$10.86bn

5.6%

36.1%

$2.58bn

0.8%

18.1%

Construction

$1.90bn

-1.4%

-46.1%

Purchase of property

$6.01bn

2.6%

8.4%

Households Housing

Personal Fixed term loans Businesses

a. Loan commitments for owner-occupier, investor housing and personal fixed term loans exclude refinancing *Seasonally adjusted Source: ABS Lending indicators, April 2024

individual customers’ situations. We listen, understand and strive for the best customer outcomes,” Smith says.

“Our bespoke systems allow us the flexibility to treat every customer based on their circumstances. Brokers look to Liberty for our ability to accept a range of income types,

“We recently raised the acceptable loan limit on our accountant letter to $2.5 million, in addition to offering single verification of income across all of our alt-doc options, from prime through to specialist.”

Pepper Money’s ongoing investment in technology has created a smooth process,

“Alt-doc loans cater for borrowers who are self-employed, contract or seasonal workers, or who may not have access to all the typical financial documents that lenders often ask for” David Smith, Liberty consider non-genuine savings and look beneath the surface with each application assessment.”

Saoud says Pepper Money has three options to verify income within its alt-doc range: an accountant’s letter, six months’ BAS, or six months’ business bank statements.

18

says Saoud, including fast turnaround times, digital verification of identity and digital documentation, with the Pepper Product Selector providing quotes for customers in a matter of minutes.

Saoud says the cascading credit model provides a broad range of solutions to meet

the ever-changing needs of the selfemployed customer. Features include unlimited debt consolidation, including refinance of tax debt, cash-out for business use, 40-year loan terms, and options for customers who may have previously experienced a life event resulting in adverse credit listings such as defaults or judgements, bankruptcy or arrears.

Looking ahead Saoud says about a third of Pepper Money customers have used alt-doc.

“We see a massive opportunity to help [mainly] self-employed customers and their families get into homes and have better deals by allowing alternative documentation.

“We anticipate that the alt-doc lending market will continue to rise due to the changing economic circumstances and the growing self-employed segment wishing to utilise documentation that reflects their current financial position and income profile.”

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F w

W y a

n th m

B

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We know all brokers are not the same, that’s why selecting nMB as your aggregator can help you find the approach that is best for your business! With our team’s experience, support and resources, you will have all the tools you need to stand out. nMB is home to some of Australia’s best brokers. So, if you’re seeking an authentic aggregator that truly understands business, get in touch with us today to discover what you’ve been missing out on.

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SPECIAL REPORT

BROKERAGES 2024

Recognising the best mortgage brokerages nationwide that continue to raise the bar and are at the industry’s leading edge

CONTENTS

PAGE

Feature article .............................................. 22 Methodology ................................................ 23 Top Brokerages 2024 .................................. 26

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SPECIAL REPORT BUSINESS STRATEGY

TOP BROKERAGES 2024

TEAM EFFORT BUILDS SUCCESS “We’ve come Rethink Financing a long way Top Brokerage rank: 25 in a short Location: Liverpool, NSW • targeting niche clientele Years in operation: 7 • upskilling brokers and team members Conversion rate of loans settled or amount of time. My • strategic planning written: 82% team is better than While all have their own secrets to success, While Rethink Financing is currently riding the average broker; each brokerage is resolute in its desire to be high, it is set to go even higher. It has built its they’re writing more TOP BROKERAGES BY THE NUMBERS than the average broker, and I’m very $1.58bn $478m Average total loan Average total happy to see where book value settlements from we’re headed” 1 January to MPA’s Top Brokerages of 2024 are a collection of innovative and skilled operations.

Features that drive the success of these outstanding brokerages include:

a trusted industry partner to its customers.

31 December 2023

76% Average conversion rate

12 Average number of loan writers

13.6 Average number of years in operation

22

Son Pham, Rethink Financing

name on commercial property investing and being a partner to its clients dealing with: • complex structures • self-employment • trust companies • SMSF

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FROM THE SPONSOR

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Bankwest has the ambition to be the best broker bank in Australia and continues to support brokers in the critical role they play in improving customers’ financial wellbeing across the country. This is one of the many reasons why brilliant brokers choose Bankwest.

Rethink managing director Son Pham says, “We’re not transactional. We’re about wealth building. Our clients don’t come to us saying they want the lowest rate. They want another property; they want to build their portfolio and need funding.”

The firm has developed deep expertise due to the complexity of its clients having multiple properties. “We understand their long-term vision of what they want to do, and we explain how we’re going to utilise certain

it’, ” says Son. “Then I really look into it and go, ‘I think it’s possible.’ I might not get there straightaway, but with a bit of digging and restructuring, we can make it happen.”

The 10-strong broking team often workshops deals in order to find these solutions.

Typically, Rethink’s clients make up about 1% of the market and have multiple investment properties.

“Sometimes you can’t use a standard bank because their policies start charging you

“We spend a lot of time educating our clients and explaining the possible solutions, but we also tell them the details so they know why” Joanne Liu, Weme Finance

lenders to get them where they need to go.

We may need to go to one lender first before we get to the next spot,” says Pham.

Commonly, clients first encounter Rethink after being referred due to other brokerages being unable to help them.

“I love it when someone says, ‘I’ve spoken to three brokers, and none of them can do

these investor loadings, and banks have to hold more capital reserves when they’ve got more exposure to a client. It does put more pressure on me, but I like the challenge.”

Post-pandemic conditions have also driven the firm’s growth, as it can now sign deals electronically, meaning it can work with customers nationwide.

METHODOLOGY To find the Top Brokerages of 2024, MPA invited Australian brokerages to submit their figures for the period 1 January to 31 December 2023. The online form also asked for details such as the number of active brokers working at each brokerage, as well as its total loan book value and conversion rate.

To be eligible, brokerages needed to have five or more loan writers in a single office headquartered in Australia. Aggregator information was also provided by applicants, and their aggregators were then required to verify the details submitted.

The final ranking is weighted across three areas: total loan book size, total settlements in the specified 12-month period, and conversion rate.

Each brokerage was ranked in each of these areas, and the ranks were then combined to produce a final tally.

While being able to access more of its niche target clients is positive, finding brokers with the skill set to support them is challenging. Most of the leading commer-

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SPECIAL REPORT BUSINESS STRATEGY

TOP BROKERAGES 2024

TOP BROKERAGES BY LOCATION

8

4

WA

Qld

4

SA

9

NSW

2

ACT

21 Vic

2

cial brokers are employed by banks. “They typically don’t move unless we pay them big money,” says Pham.

“We’ve been finding residential brokers with experience who want to learn and be better, so I bring them on board. I put them through training and mentoring with myself, and the feedback is that it’s very intense and a big learning curve.”

That upskilling is set to continue across the brokerage as it prepares for a relaunch later this year. Under Pham’s leadership, there is a detailed plan that aims to build the business out and capture a slice of the residential market.

“All I say is ‘watch out’ for all those other businesses out there,” Pham says. “People are always searching for professionals who know a bit more to help them get more. We have the expertise and knowledge, and the team is good.

We’re going to expand a lot in that space – that’s the big plan for the next 12 to 24 months.”

Tas

“The team deserves all the credit for everything we do. When I make a decision, I think about whether it’s going to help someone stay in the business.

As long as my North Star is trying to retain as many people as possible, it generally tends to be the right decision” Nitish Kumar, Loan Market Canberra

24

Weme Finance Top Brokerage rank: 47 Location: Mount Waverley, Victoria Years in operation: 4 Conversion rate of loans settled or written: 66% Weme Finance director and principal finance broker Joanne Liu isn’t surprised by her brokerage’s growth, as she was her own target customer. Previously working in a corporate role and as a certified practice accountant, she could see her peers needed mortgage brokers to satisfy their needs.

“Coming from a professional background, I wanted to help people like me,” Liu says.

“Even though I had a master’s degree in banking finance and the knowledge, I didn’t have the time to manage my own mortgage.”

Weme was created to target professionals

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such as lawyers, doctors, accountants, etc.

Liu also pitches towards self-employed business owners, as her accounting skills mean she can decipher their financials and understand their limitations. All eight of the firm’s brokers share the same background as Liu. “That’s the main point of difference; we are a band of people who are coming from finance and accounting backgrounds,” says Liu. With such a targeted customer base, Weme must operate accordingly. It is open to booking meetings between 9 p.m. and 11 p.m.

Liu says, “We make ourselves available even at weekends, especially for that first meeting, to understand their goals and show them the possible options. They’re super busy, but we accommodate them, as I believe it’s far better to meet each other to form a bond and create a sticky relationship.”

The major driver of the brokerage’s success is Liu’s determination. She founded the business on 6 June 2020, had her accreditation by the end of July, and secured her first client by August.

By the end of the first financial year, Weme had settled 50 loans, and then this rose to over 100 in the second. The brokerage is currently doing more than double that.

“We deal with a lot of complex cases and complicated structures; that’s how I’ve also made the brokerage different,” says Liu. Getting those tricky cases over the line isn’t the end point for Weme. Liu has instilled a deeply service-oriented mindset.

She says, “We always believe we need to provide outstanding service to the clients, as a lot of brokers focus on just winning business.”

Weme prides itself on presenting clients with a range of options and letting them choose what is best for them.

“We don’t promise anything we can’t deliver, and we don’t push people to take the option that we prefer. Everything is trans-

parent, and we make the client understand using simple language, so what they choose is in their best interest, not ours,” says Liu. Another feature of Weme’s service is monitoring each client’s situation and reaching out to see if something else can be done.

Liu says, “Maintenance doesn’t create any revenue, but it does create potential revenue in the future.”

Loan Market Canberra Top Brokerage rank: 50 Location: Canberra, ACT Years in operation: 4 Conversion rate of loans settled or written: 72% Loan Market Canberra’s success allows its people to play to their skill sets.

Franchise owner Nitish Kumar says, “Most brokerages get so caught up in admin, so one of the big things I wanted when I started the business was for brokers to be able to focus on the client and not worry about the backend. That’s why we built out a really large admin team.”

This has a twofold benefit: • Brokers focus on being in front of the client • The client gets an enhanced service experience and can reach their broker much more easily The second arm of Kumar’s overarching strategy is to ensure that brokers are as productive as possible with their clearer schedules.

“It’s important for me that the brokers are not working six or seven days a week. I make sure that they have a good work-life balance and can spend time with their families.”

To this end, Loan Market Canberra oper-

ates a nine-day fortnight, giving those with children or other commitments a day back solely for them.

The rapid rise of the brokerage isn’t down to chance; Kumar had a clearly defined blueprint from inception.

“I started with, ‘What does 2030 look like?’ And then I worked backwards so I thought of all the problems.”

The building blocks are: • 20 brokers • avoiding burnout by promoting work-life balance • large admin team to take the load • end target of $1 billion annually (2,000 loans) Remarkably, every person in the business has come in via referral, fortifying the internal atmosphere.

“They are automatically part of the culture because they already know someone, and that person ends up taking accountability for inducting them into the business,” says Kumar. “We know that a staff member would not recommend a person who’s not going to be good.”

Loan Market Canberra sees most of its staff choosing to come to the office daily, even though they do have the option to work remotely.

Kumar has correspondingly moved into a supervisory role, devoting time to solving complex cases due to his experience.

He says, “When I had clients, my ability to actually be available was pretty limited, so the idea behind getting off the tools was to have a bit more time. But the brokers all help each other and come together if they need to find a solution. If they’re really struggling, then I end up being the last resort, but we definitely aren’t set up in a way where I am the first resort.”

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SPECIAL REPORT BUSINESS STRATEGY

TOP BROKERAGES 2024

BROKERAGES 2024 1

Simplicity Loans & Advisory

14

Bernie Lewis Home Loans

2

The Australian Lending & Investment Centre

15

Aussie Prospect

3

Tiffen & Co

16

Azura Financial

AUSUN Finance

17

Podium Money

5

Loan Gallery Finance

18

Masters Broker Group

6

Acceptance Finance

19

Advanced Finance t/a Better Choice Mortgage Services

7

My Mortgage Freedom

20

AXTON Finance

8

Clarity Financial Group

(Tie)

3 (Tie)

(Tie)

(Tie)

8

20

XIN Mortgage

(Tie)

22

Green Finance Group

11

Shore Financial

12

Smartmove Professional Mortgage Advisors

22

BlueRock Finance

(Tie)

22 (Tie)

25

26

Mortgage Finance Solutions

(Tie)

10

13

The Loan Company

(Tie)

Empower Wealth

Entourage

Rethink Financing Phone: 02 9821 3483 Email: enquiries@rethinkfinancing.com.au Website: rethinkinvesting.com.au/rethinkfinancing

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BROKERAGES 2024 26

Pivotal Financial

27

Aussie Gawler

28

Absolut Financial

29

Loan Market Razor

30

Mortgage Choice Glenelg

39

Aussie Toukley

(Tie)

39

Aussie Moonah

(Tie)

41

InReach Finance

42

North Coast Lending

43

Aussie Launceston

44

UFinancial

45

Aussie Ipswich

46

Aussie Townsville

47

Weme Finance Phone: 0426 680 652 Email: joanne.liu@wemefinance.com.au Website: wemefinance.com.au

48

Aussie Berwick

49

Mortgage Choice Indooroopilly

50

Loan Market Canberra Phone: 02 6173 6399 Email: lmcanberra@loanmarket.com.au Website: broker.loanmarket.com.au/canberra

(Tie)

30

Mason Finance Group

(Tie)

32 33 (Tie)

33

Loan Market Geelong City

Original Wealth

Aqua Financial Services

(Tie)

35

Aussie Belmont

36

Napoleon Finance

37

DPN

(Tie)

37 (Tie)

Loan Market New Farm

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SPECIAL REPORT BUSINESS STRATEGY

TOP BROKERAGES 2024

SIMPLICITY LOANS & ADVISORY

S

implicity Loans & Advisory (SLA) has retained its crown as MPA’s Top Brokerage of 2024.

Co-founder and managing director Matthew Johnson says, “To be recognised among all these top businesses and to actually be number one two years in a row is a fantastic honour for our team.”

Despite its success and industry standing, SLA still views itself as a young business after only being in operation for seven years.

“We’re always looking for ways to do things better or efficiently because we’re still in that mindset of not necessarily a startup but maybe not far off it,” says Johnson.

One element of the firm’s continued success is linked to its youth, as its team is now a year older with greater experience under its belt. It has been able to refine its skills, gain more expertise and understand how best to leverage its tools.

According to Johnson, a key driver of SLA’s repeat win is providing clearer focus to brokers. The firm has been given more definitive boundaries for the markets to operate in.

“That’s from the really complex large transactions through to property specialists who are focused on developments, construction and helping developers with every part of their deal cycle, through to our trading business and mid-market specialists who are doing the slightly higher volume deals,” says Johnson. “Having that bit of a clearer focus has meant they have gotten better at those types of deals, rather than trying to do a little bit of everything.”

The other major development has been

28

SLA’s tech platform. It has gone live and has enabled the team to do higher volumes and be more efficient. The ominous news for the rest of Australia’s brokerages is that there’s an update coming that’s predicted to be a ‘game changer’.

Johnson says, “I think we’ll see a massive jump in that efficiency dividend for our guys off the back of that technology.”

Efficiency is the key word when it comes to SLA. The firm operates with nine loan writers, whereas brokerages with similar total loan book values have up to three times as many loan writers.

This ability of SLA to punch above its weight has been embedded in the business from the start.

“From the very beginning, we’ve tried to create processes and systems to leverage technology,” says Johnson. “To give an example, when a lead comes in, it goes through a standardised channel even though we’re commercial and a lot of people say every commercial deal is bespoke. To a large extent, I agree, but you can still leverage the technology to allow that to move through from start to finish as efficiently as it can.”

Proving how effective its system is, SLA’s average ticket size is around $4 million, up from $1.3 million when it began. To do this, the brokerage has created a team by honing the skills of young brokers.

Johnson says, “Our bias is to bring in more junior staff and promote them.

So, they very much become part of the DNA and understand how we like to go about things.”

The standard for anyone joining the

Phone: 1300 022 022 Email: enquiries@simplicity.net.au Website: simplicity.net.au

business is the internal phrase, ‘we want people that want to play for Australia’.

“If you want to just play park football for your local suburb, there’s nothing wrong with it,” says Johnson. “But we want people who are aspirational and who want to really push themselves for excellence.

That doesn’t mean killing yourself at your desk for 24 hours a day. It just means wanting to really push yourself to be the best you can.”

That drive is maintained by Johnson’s business partners, Jean-Pierre Gortan and Ryan Nelson, who have complementary skill sets to support and energise the team, ensuring that there is a strong sense of care, while also instilling a belief in continual improvement.

Johnson says, “We always make sure we celebrate our wins, then we pick ourselves up the next day and go again.”

The executives are keen to share the award with the entire staff, the lenders they work with, their aggregator partners and also their clients, who have all empowered SLA to shine brightly and retain its title.

$4.49bn

Total loan book value (all loan types)

$1.15bn

Total value of settlements (all loan types) from 1 January to 31 December 2023

89%

Conversion rate of loans settled or written

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Ian Rakhit, representing Bankwest, the proud sponsor of MPA’s Top Brokerages 2024, presents the prestigious award to the accomplished team from Simplicity Loans & Advisory (SLA)

www.mpamag.com.au

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20/06/2024 11:49:04 am

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20/06/2024 1:27:48 pm

SPECIAL REPORT

BROKERS ON AGGREGATORS

2024

BROKERS ON AGGREGATORS MPA’s annual survey unveils how brokers ranked Australia’s aggregators in 2024 across time-tested metrics such as commission payments, lending panel quality, IT, CRM and BDM support

BROKERS CONTINUE to assert their influence in Australia’s mortgage market, shedding light on the dynamics of the third party distribution channel and the standout support aggregators provide amid ongoing market fluctuations.

MPA’s Brokers on Aggregators 2024 report uncovers that broker satisfaction levels have experienced a moderate decline, dropping seven points, despite brokers being indispensable partners.

This shift in sentiment doesn’t mean the sky is falling, as aggregator loyalty remains deep, with 74% of brokers indicating they are extremely unlikely to take their business to a competitor.

This year’s top mortgage aggregators fiercely advocate for broker interests in a demanding consumer and lending market, providing the key ingredients to ensure broker success.

“Successful aggregators treat brokers as more than just a number,” says Liberty chief distribution officer David Smith. “They understand and invest in their business at the grassroots level and maintain strong relationships with key lenders.”

He adds, “The aggregators that set themselves apart embrace technology with a

progressive approach that goes beyond simple loan applications and CRM, using innovation to make the process easier for brokers and customers.”

The top-ranked aggregators have surpassed expectations on trusted performance indicators, as demonstrated by these comments from respondents on the broking community’s top three priorities: Timely commissions • “They allow us to access the commission before it is officially received, aiding cash flow” Lending panel quality • “Continually adding new lenders to the panel provides brokers with more choice for loan products and better variation of lending policy” IT and CRM support • “Improved technology helps reduce application time, helping with client refinance growth” In the first quarter of 2024, the broker market share of residential home loans reached an all-time high of 74.1%, according to the MFAA. This statistic bolsters the

pivotal role aggregators play in the evolving mortgage market.

For award-winning non-bank lender Liberty, Smith asserts that technology is proving to be a challenge and an opportunity, underscoring the critical capability of an aggregator to engage with lenders in ensuring the best outcomes for brokers and customers.

“Customer care and retention will always be vital for brokers to nurture their existing business while attracting new borrowers and marketing for growth,” he explains.

“Looking ahead, we believe the aggregator space will likely see further consolidation, while smaller, boutique aggregators will strengthen competition.

“We expect broking, generally, to face a steady increase in digital competitors, with limited property market supply, elevated interest rates, and living costs all contributing to make aggregators and brokers compete harder for customers.”

As Australia’s broking elite appear poised to expand their share of mortgage originations, the aggregators assisting them in weathering the current storm stand out as essential allies.

Continue reading to explore detailed survey results and other highlights.

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SPECIAL REPORT

BROKERS ON AGGREGATORS

TYPICAL RESPONDENT

Gender Aged between 46 and 55

Resides in Vic (31%), NSW (26%) or Qld (21%)

METHODOLOGY

Years in the industry Less than 2 2 to 5 6 to 10 10 to 20 Over 20

11% 14% 22% 26% 27%

Male

77.2%

Female

22.4% 0.4%

Other

$60m+ 14%

In MPA’s 14th annual Brokers on Aggregators survey, brokers were asked to rank their aggregators across 11 categories: accurate and on-time commission payments; IT and CRM support; quality of lending panel; communication with brokers; BDM support; compliance support; training and education; additional income streams; marketing support; white label offering; and lead generation. Brokers ranked their aggregator with a score from 1 to 5 in each category.

Due to the varying sizes of aggregator groups and the disparity in the number of respondents per aggregator, only those that achieved a response rate of at least 10% of brokers for each aggregator were included in the final list.

MPA also asked brokers a series of questions relating to their aggregator’s service and other needs, but these did not affect the overall score.

32

$40,000,001–$60m

24%

$0–$10m

Settlement volume

13%

24% 25%

$10,000,001–$20m

$20,000,001–$40m

What services are most important to brokers?

Accurate and on-time commission payments Quality of lending panel IT and CRM support Compliance support BDM support Communication with brokers Training and education Additional income streams Marketing support White label offering Lead generation

Performance indicator ranking

4.808 4.689 4.669 4.610 4.507 4.481 4.347 4.006 3.677 3.436 3.105

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BROKERS’ TOP PRIORITIES Brokers re-evaluate loyalty as they prioritise tech, service and support, with finances a persistent issue SURVEY RESPONDENTS attributed the downward shift in aggregator loyalty, falling from 81% in 2023 to 74% in 2024, to various factors, including market conditions, service quality changes and competitive offerings.

Still, a majority of brokers expressed strong allegiance to their current aggregators, with one broker commenting, “They’ve given me great support over the years and are excellent to work with.”

Another broker said, “I’m very happy where I am, and I could do more myself to learn from them.”

The top three reasons brokers gave for switching to a competitor have remained consistent since the 2021 report. They included subpar IT, CRM and BDM support, as well as inaccuracies and commission payment delays.

For the fourth consecutive year, commission payments ranked as the most important aggregator service, followed by lending panel quality and IT and CRM support.

The competition for accurate and timely payment of commissions in 2024 was fierce among aggregators with over 600 brokers.

Finsure emerged as the gold-medal winner, claiming the top spot from last year’s champ, National Mortgage Brokers, who secured the bronze. Loan Market maintained its solid silver standing.

In the boutique aggregators group, MoneyQuest rose to gold from its silver finish last year. Nectar Mortgages debuted with a silver win, and bronze went to Liberty Network Services, which claimed the gold last year.

“The competition for accurate and timely payment of commissions in 2024 was fierce among aggregators with over 600 brokers” Brokers were vocal about commissions, highlighting concerns and suggestions related to commission structures, clawbacks and aggregators’ perceived processing methods: • “Better commission splits should be implemented once brokers reach a certain book value. Establish a target, and once achieved, the trail commission should increase” • “Fight harder against clawbacks” • “Commission processing should be stronger and more automated” • “Petition all lenders for higher commissions. Brokers are handling double the workload, and lenders should process these deals within minutes” The proportion of brokers who said they were very happy with their aggregator’s fees and commission split also showed a slight decrease in 2024, from 68% last year to 65%.

A small but slightly higher margin of brokers expressed dissatisfaction, while just under a third indicated mild satisfaction, resembling results in the previous year.

The specifics of brokers’ annual settlement values were roughly the same for the past two years, showcasing their resilience to persistent economic challenges and ability to work effectively with their aggregator

partners to help clients achieve their goals.

The 2024 brokers’ settlement values were: 24% $0–$10m (two points less than last year) 24% $10,000,001–$20m (one point higher than last year) 25% $20,000,001–$40m (one point higher than last year) 13% $40,000,001– $60m (one point higher than last year) 14% More than $60m (one point lower than last year)

Unsurprisingly, survey respondents’ top reasons for leaving their aggregator correlate to the core services they appreciate most: commission payments, IT, CRM and BDM support.

Brokers pulled no punches in expressing their opinions on the issues, signalling the essentials that the best mortgage aggregators need to retain their business: • Service and support: administrative and compliance assistance, as well as

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SPECIAL REPORT

BROKERS ON AGGREGATORS

communication, transparency and leadership from the top down • Technology and tools: user-friendly CRM systems, calculators, IT support, and investment in emerging tech stacks and solutions • Financial factors: competitive financial arrangements and incentives, diversification opportunities Among aggregators with 600+ brokers, the reigning champ, outsource Financial, retained its gold medal for IT and CRM support. Loan Market successfully battled back to take silver after scoring bronze last year, and Specialist Finance Group took third place in a tight race.

For boutique aggregators, MoneyQuest’s three-year gold reign continued, Nectar Mortgages took silver, and the bronze went to Liberty Network Services.

“Working with highly rated aggregators ensures consistency and quality of applications, minimal back-and-forth and a deep understanding of the regulatory environment,” Liberty’s Smith says.

HOW HAPPY ARE YOU WITH YOUR AGGREGATOR’S FEE/COMMISSION SPLIT?

HOW LIKELY ARE YOU TO CHANGE AGGREGATORS IN THE NEXT 12 MONTHS? Extremely likely 5%

Likely Neutral

Unlikely

Extremely unlikely

4% 8% 74% 9%

TOP 5 REASONS TO LEAVE YOUR AGGREGATOR Poor accuracy and timeliness of commission payments

61%

Poor IT and CRM support 55%

Poor BDM support Not happy

5%

49%

Poor compliance support Somewhat happy

30%

44%

Poor quality of lending panel Very happy

34

65%

41%

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HIGHLIGHTS: MONEY AND IT SUPPORT

ACCURATE AND ON-TIME COMMISSION PAYMENTS Aggregators

Finsure

Boutique aggregators

National Mortgage Brokers

Loan Market

MoneyQuest

Nectar Mortgages

Liberty Network Services

ADDITIONAL INCOME STREAMS Aggregators

Finsure

Boutique aggregators

National Mortgage Brokers

outsource Financial

Nectar Mortgages

MoneyQuest

Liberty Network Services

IT AND CRM SUPPORT Aggregators

outsource Financial

Boutique aggregators

Loan Market

Specialist Finance Group

MoneyQuest

Nectar Mortgages

Liberty Network Services

www.mpamag.com/au

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SPECIAL REPORT

BROKERS ON AGGREGATORS

HIGHLIGHTS: LENDING PANEL AND SUPPORT

QUALITY OF LENDING PANEL Aggregators

Loan Market

Boutique aggregators

outsource Financial

Specialist Finance Group

Nectar Mortgages

MoneyQuest

Purple Circle Financial Services

COMPLIANCE SUPPORT Aggregators

outsource Financial

Boutique aggregators

National Mortgage Brokers

Loan Market

MoneyQuest

Liberty Network Services

Nectar Mortgages

WHITE LABEL OFFERING Aggregators

Connective

36

Boutique aggregators

Finsure

Loan Market

MoneyQuest

Nectar Mortgages

Purple Circle Financial Services

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WISH LISTS AND FRUSTRATIONS Hopes and fears collide in a mix of clawbacks, lending panel diversity and hidden costs BROKERS HIGHLY value the quality and diversity of an aggregator’s lending panel, as evidenced by its three-year run as No. 2 on their priority list.

Lending options significantly influence brokers’ decisions to jump to a competitor, consistently ranking among the top five reasons they would leave their aggregator.

Loan Market has clinched the gold medal by a commanding margin for its lending panel quality among aggregators with 600+ brokers for three consecutive years. outsource Financial netted silver, and Specialist Finance Group won bronze.

Among boutique aggregators, Nectar Mortgages won the gold medal, MoneyQuest nabbed silver, and Purple Circle Financial Services took the bronze.

ARE HIDDEN COSTS IMPOSED BY YOUR AGGREGATOR A PROBLEM? A minor problem 6%

18%

A major problem

76%

Not a problem

lending panel, with some noting they would like to have: • “greater access to lower-tier lending solutions”

“If aggregators could offer quality leads with sufficient borrower income to service average loans, that would be helpful” The size and diversity of aggregators’ lending panels appear to coincide with overall broker satisfaction, as brokers often prioritise access to a wide range of lenders offering competitive rates and products, facilitating greater flexibility and opportunity for their clients’ needs.

MPA’s survey data suggests that brokers are mainly satisfied with their aggregator’s

• “a better comparison tool for commercial lending” • “more private lenders to assist with shortterm funding” • “improved panels with more non-banks and major banks” When asked which lenders they would like added to their panel, long-standing favourites

Liberty, HSBC and Bank Australia were most often mentioned.

Compliance support endures as a fourthplace broker priority, in tandem with a reason they might leave an aggregator. Some respondents, however, believe that some aggregators have been slow to adapt to market changes, and concerns about clawbacks and fees draw the ire of many: • “The broker industry needs to apply pressure to the banks to keep their interest rates competitive, as well as reduce clawback terms extensively” • “They do not understand the franchise model and have made it harder for us to do the same thing we were doing before” • “Our aggregator is destroying the legacy and goodwill built by generations past” • “They have been too slow to change to a purchase market from a refinance market”

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SPECIAL REPORT

BROKERS ON AGGREGATORS

Other brokers offered kudos to their aggregators for their unwavering support in providing professional indemnity insurance coverage within their fee package, and education on interest rates and compliance.

Another trend among brokers revealed an increasing concern about hidden costs imposed by their aggregators. Since the strong trust level of 90% was recorded in 2021 when brokers indicated it wasn’t a problem, there has been a drop in that figure to 76% this year, compared to 82% in both 2023 and 2022.

Those who stated that it was either a minor or major problem also increased to 24% from 18% in last year’s survey.

Combined with an 8% bump recorded in the 2021 data, this indicates a substantial rise, suggesting that broker confidence in their aggregator’s commitment to transparency has been eroding.

Brokers have highlighted this issue: • “From my perspective, they want to increase the fees generated per broker. I’m not sure

TOP 6 AGGREGATORS BROKERS WOULD PICK IF THEY HAD TO CHANGE TOMORROW Connective

20%

Finsure

11%

Australian Finance Group

8% 7%

Specialist Finance Group LMG

5%

LMG (includes Plan, Choice, Fast)

4%

MAIN OBSTACLES TO LEAVING AN AGGREGATOR Lender reaccreditation

54%

Data migration/IT issues

48%

Lack of time

37%

Clawbacks/trail issues

33% 17%

Contractual obligations Upfront commission issues

38

13%

Loss of back-office services

9%

Loss of marketing services

9%

Licensing issues

8%

how that assists brokers to reduce costs” • “Marketing costs are charged per deal, not per customer. That means if I settle three loans for one customer, I get charged three times” • “Every add-on costs money, so monthly fees end up being very high” BDM support held strong in fifth place again this year with a marginally higher importance rating of 4.6 out of 5. This result suggests a continued emphasis on business development support focused on education, coaching and proactive communication.

“Get the BDMs out of Sydney for the country brokers,” a respondent said.

Another broker said, “There is a vast array of products and services available for a fee, and it is hard to know what to focus on.”

For the third consecutive year, over half of brokers cited the lender reaccreditation process as a stubborn obstacle to switching aggregators.

“Lenders and aggregators appear not to support a streamlined reaccreditation process across all parties,” one broker asserted.

Data migration and IT issues ranked as the second biggest issue for two years running, with notably fewer brokers saying lack of time was a hurdle.

If brokers could change aggregators tomorrow, their favoured choice would be Connective at 20%, Finsure at 11% and Australian Finance Group at 8%.

While Connective is down significantly as a top broker pick from 33% last year, brokers repeatedly lauded its flat-fee model and superior CRM, technology and tech tools.

“I have switched to Connective in the last six months; their commission splits are more reasonable, and the CRM and branding system is much more flexible,” one broker said.

Brokers commented that Finsure had good IT and internal processes, compliance

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support, flexibility, a flat-fee model and positive referrals.

Helping brokers adjust and thrive in a rapidly changing mortgage market with higher interest rates and inflation is a hallmark of the best mortgage aggregators.

This broker captured what places the industry-leading aggregators at the forefront: “I have been with my aggregator for over 10 years and will be with them for life.

They are supportive in all areas of broker development.”

HAS YOUR AGGREGATOR DONE ENOUGH TO SUPPORT YOUR PROFESSIONAL DEVELOPMENT, INCLUDING DIVERSIFYING INTO COMMERCIAL LENDING?

NO

YES 88%

12%

HIGHLIGHTS: LEAD GENERATION AND MARKETING

LEAD GENERATION Aggregators

Specialist Finance Group

Boutique aggregators

National Mortgage Brokers

Loan Market

Nectar Mortgages

Liberty Network Services

MoneyQuest

MARKETING SUPPORT Aggregators

outsource Financial

Boutique aggregators

National Mortgage Brokers

Loan Market

Nectar Mortgages

MoneyQuest

Liberty Network Services

www.mpamag.com/au

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SPECIAL REPORT

BROKERS ON AGGREGATORS

HIGHLIGHTS: COMMUNICATIONS AND TRAINING

COMMUNICATION WITH BROKERS Aggregators

outsource Financial

Boutique aggregators

National Mortgage Brokers

Finsure

MoneyQuest

Liberty Network Services

Purple Circle Financial Services

BDM SUPPORT Aggregators

outsource Financial

Boutique aggregators

Specialist National Finance Group Mortgage Brokers

MoneyQuest

Nectar Mortgages

Liberty Network Services

TRAINING AND EDUCATION Aggregators

outsource Financial

40

Boutique aggregators

National Mortgage Brokers

Finsure

MoneyQuest

Liberty Network Services

Nectar Mortgages

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WHAT YOU'RE SAYING With broker market share of residential loans at more than 74%, MPA asked the broking community if their aggregator was doing enough to boost this share further, and what more they could do

“Brokers are doing this by default.

I would rather my aggregator fought harder against clawbacks, which should not be worn by the hard-working broker who is forever living in fear”

“Yes. They are constantly advertising and pushing for more people to use brokers and improving the competitive reach of our panel. They always offer to help with more outsourcing or external offerings to keep buyers coming to us instead of banks”

“Have smart BDMs and support for leading brokers who are writing $100 million to grow further”

“They are doing enough by being so actively involved in the market”

“Simplify compliance processes to improve brokers’ cost competitiveness vs direct bank channels”

“Run more broker workshops to hear our ideas and feedback”

“That’s a role for brokers themselves, but the cost of advertising a small broker service is prohibitive”

“Be more proactive in ensuring commissions are paid on time”

“Get us faster approvals from banks, our biggest competitor. Waiting five to 10 days for a major to get approved, when customers can walk into a branch and get it done within 24 hours, highlights our need for speed”

“My aggregator has bent over backwards to help me grow my book”

“Focus on existing brokers to increase market share, as opposed to increasing broker numbers”

“BDMs that do more than try to sell add-ons. If a BDM could understand my business and give me one recommendation that would provide a better lead stream based on their knowledge of other like-sized businesses, then this would assist”

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SPECIAL REPORT

BROKERS ON AGGREGATORS

FINAL RESULTS MPA presents the final ranking of Australia’s top aggregators and boutique aggregators in 2024 based on brokers’ votes across 11 award categories

AGGREGATORS

42

6

1

1

GOLD

SILVER

BRONZE

1

2

4

2

1

2

GOLD

SILVER

BRONZE

GOLD

SILVER

BRONZE

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BOUTIQUE AGGREGATORS

7 GOLD

3

1

4

4

2

4

5

SILVER

BRONZE

GOLD

SILVER

BRONZE

SILVER

BRONZE

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FEATURES

AGGREGATORS ROUNDTABLE 2024

BROKER CHANNEL REACHES NEW HEIGHTS Leading aggregators discuss hot topics such as broker market share, serviceability, payroll tax and diversification at MPA MPA’s ’s annual roundtable

THE MORTGAGE BROKING industry is enjoying unprecedented levels of support from the Australian public.

The latest MFAA figures show that in the March 2024 quarter, 74.1% of all new home loans were written by mortgage brokers – a record figure, which has surpassed the previous record of 71.8% for the October to December 2023 quarter.

44

Australians are increasingly placing their faith in the skills and knowledge of brokers to help them buy their first home, refinance for a better deal or purchase an investment property. But that doesn’t mean everything is rosy in the world of broking. Five increases to the Reserve Bank’s official cash rate since the beginning of 2023 and a higher cost of living mean reduced borrowing capacity, with some

people unable to refinance due to serviceability constraints.

Brokers are working harder than ever for customers in a competitive market, and the level of refinancing has fallen since the peak about 12 months ago, with fewer lenders offering cashbacks. This means diversification into areas such as commercial and asset finance will become increasingly important

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for brokers as they look to cover all their clients’ finance needs.

The issue of payroll tax also looms large after the Federal Court found that LMG was liable for payroll tax, albeit with exemptions, with ramifications for the way brokerages are structured and operate.

New technology and ongoing training are necessary to ensure brokers can continue to

serve their customers well and grow their businesses. The support of aggregators remains crucial as brokers navigate both the challenges and opportunities of the market in 2024.

MPA invited leading aggregators to join its annual roundtable at Sydney’s Nobu restaurant. Attending the event were Blake Buchanan, general manager, SFG; Brad

Cramb, chief distribution officer, Lendi Group; Gerald Foley, managing director, nMB; Them Lam, head of sales and distribution, AFG; Daniel Marsi, CEO, Liberty Network Services; Tanya Sale, CEO, outsource Financial; Aaron Slater, general manager distribution, REA Group (Mortgage Choice), and Sam White, executive chairman, LMG.

www.mpamag.com/au

45

FEATURES

AGGREGATORS ROUNDTABLE 2024

THE PANELLISTS AGGREGATORS

Blake Buchanan General manager, Specialist Finance Group

Brad Cramb Chief distribution officer, Lendi Group

Gerald Foley Managing director, nMB

Them Lam Head of sales and distribution, AFG

Daniel Marsi CEO, Liberty Network Services

BROKERS

Tanya Sale CEO, outsource Financial

Aaron Slater General manager distribution, REA Group (Mortgage Choice)

Sam White Executive chairman, LMG

Two brokers also attended: Kristie Gould, franchisee, Mortgage Choice Warners Bay, and Adriana King, principal finance broker, Expand Equity.

How have aggregators worked closely alongside their broker members to support them and their customers in a challenging lending environment?

There have been a variety of challenges for mortgage brokers over the last 12 months, with fewer customers borrowing for property purchases and refinances dropping, while interest rate rises and inflation have affected borrowing capacity and serviceability, with borrowers rolling off low fixed rate loans onto much higher rates.

The aggregators said serviceability was one of the biggest challenges, but all shared a sense of optimism about the future, with a focus on supporting brokers through

46

www.mpamag.com/au

Kristie Gould Franchisee, Mortgage Choice Warners Bay

Adriana King Principal finance broker, Expand Equity

education to adapt to a changing market.

Sale said the challenges hadn’t just been interest rate rises or lender policies.

“I think it’s about the brokers getting guidance and education on sticking close to the consumer,” she said. “I think that’s been the challenge all the way through the turmoil with these interest rate rises.

“I think the lending’s going well. There’s now more competition outside of the majors, which I feel brings some balance within our industry.”

Sale said the industry had to stop giving such a large percentage of loan business to the major banks.

“The non-majors and other lenders have got to step up so we have a very vibrant, dynamic and competitive industry.”

White said, from LMG’s perspective, loan serviceability had been one of the biggest challenges for brokers, and hopefully that would change next year.

“In the last 12 months, brokers are probably working harder than they ever have for probably the same, maybe slightly less in some cases,” he said.

Brokers had put a lot of energy into looking after customers in an environment in which it’s been difficult to get serviceability. “The implications are having to stay in contact with clients for longer, deals taking longer.”

White said LMG was training brokers in this area, including “engaging customers beyond the transaction”.

Sale said it wasn’t the lending policies that were a challenge, it was the serviceability.

Lam noted that wage growth hadn’t caught up, and unemployment had risen slightly. He said AFG’s focus was on its broker members and their customers. “We’re looking at the whole broker business and ways to help our brokers improve profitability, given that some are not settling as much, or loans are taking longer to settle.”

Everyone was talking about broker diversification, he said, and AFG was educating brokers to “take that first step to identify the customer” that needs diverse services.

Lam said AFG not only led the charge in introducing approved policies to enable brokers to utilise (1%) serviceability buffers for their “mortgage prisoner” customers, but had also created a brand-new product including the 40-year interest-only (evergreen) loan for mature-age borrowers looking for greater repayment flexibility as they transitioned into retirement.

White said the value of brokers was on display when it came to tackling serviceability.

“You need to have niches, you need to understand where your product is. It just goes to show why broker market share is going to keep growing, because the tighter it gets, the more customers are going to need an adviser, and that’s been a real upside this year for the industry.”

Foley agreed with White and said the value of brokers was that they were across all the lenders’ activity when it came loans.

“The banks seem to be revisiting their mix more frequently now,” Foley said. “They see

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an opening – they’ll price to win and get a good inflow. Then they’ll tighten a bit or someone else will come in.”

He said one of the major banks had been almost “double sharing” off the back of policy and pricing changes, which was good for brokers and their customers.

Sale said it was a challenge to ensure the major banks didn’t dominate again. “At one stage in the industry, we got to a really nice balance, where the [loan] percentages were a really nice spread. We need the other

constraints and the challenges brokers faced with customers rolling off fixed rates.

Cramb said Lendi Group had approached these issues from an industry advocacy perspective, setting up and publishing a ‘loyalty tax index’ 18 months ago, which looks at front-book and back-book pricing.

“The great news is … customer awareness of this then drove a reduction in that index,” said Cramb. “We were at 70 points only 18 months ago, between back book and front book; we’re now tracking at 10. So

“It’s OK for pundits to talk about diversifying and tell people to do it – [but] when the rubber hits the road, they need to know how, and that’s where education and training come in” Blake Buchanan, SFG lenders to lift so it can become a very balanced environment.”

Slater agreed and said that with the changing market, a diverse lender panel really came into play.

“That product innovation you’ve spoken around is really important,” Slater said.

“That’s why we [Mortgage Choice] were so excited to enter into a partnership with Athena Home Loans to create the white label product suite, Mortgage Choice Freedom. Athena’s serviceability model is really powerful, and we’ve had great customer outcomes.”

Slater said it was about finding the right lender for the scenario and ensuring that broker members realised they had a lending panel for a reason.

“Brokers can vote with their feet, even under a best interests duty … so the more innovation lenders deliver for brokers, the more we see brokers recommending those lenders to their customers.”

MPA raised the issue of serviceability

48

that tells me that the customers are finding ways through the broker proposition to move forward.”

Cramb also acknowledged the advocacy of the MFAA and FBAA on home loan discharge timing and the home loan price enquiry.

He said Lendi Group had contributed to the MFAA’s white paper that it recently submitted to the federal government, which recommended ways to streamline and speed up loan discharges. Cramb said the aggregator provided data that shined a light on

lender practices and helped lead to better customer outcomes.

One of the challenges for brokers was finding customers, so the group had been helping brokers generate new customers through tactical campaigns such as its recent Great Aussie Giveaway campaign, which had driven the “biggest appointments ever”.

Cramb said the network had also been working with brokers to scale up their brokerages and reduce costs, assisting franchisees to “become CEOs of their businesses”.

Slater said at Mortgage Choice brokers were at different stages in their careers, and market dynamics were constantly changing.

“Sometimes franchise owners are seeking additional support with lead gen, sometimes with back-book retention, sometimes with loan processing,” Slater said. “Our role as an aggregator is to be working and innovating to match where our business owners are at.

We need to be match fit for the market – wherever that shifts.”

Marsi said with challenge comes opportunity. “It’s an opportunity for brokers to further elevate their efforts and differentiate themselves, in terms of sales, prospecting and marketing.”

He said LNS valued keeping brokers informed about the current market and potential trends. “That way you’re upscaling and empowering brokers to feel confident and knowledgeable, which enables them to effectively educate their customers. I think that’s crucial.”

RECORD MORTGAGE BROKER MARKET SHARE Between January and March 2024, 74.1% of all new home loans were written by mortgage brokers – the highest mortgage broker market share on record

4.5ppt In the March 2024 quarter, mortgage broker market share rose 4.5 percentage points compared to the same period in 2023

22ppt Compared to the same period in 2020, mortgage broker market share rose by 22 percentage points

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Buchanan said that at SFG education was paramount, and brokers were provided access to great content. “The best investment a brokerage can make is in education. The good ones are always learning, adapting, evolving, and it’s because education becomes knowledge, and with that knowledge you identify opportunities and assist people.”

When it came to market share, Buchanan said it was important to remember that “without competition we don’t exist”, and there were many benefits that consumers enjoyed due to this competition. In uncertain economic times, customers rushed back to safety, and that safety had always been the big banks.

“It’s disappointing to see big bank market share grow across the industry, and sometimes that comes from complacent conversations. I’m sitting with a customer, they’re banking with big bank B, it’s easy for me to keep them there rather than have that different conversation of it’s a wider world out there and let’s explore those options.”

On refinancing, Buchanan maintained his

views from last year. “If you’re in the system and fundamentally nothing has changed, and you’ve got 27 years to go of your 30-year term, and you can refinance to a cheaper rate,

refinances at a lower buffer, and AFG had a compliance policy to help brokers facilitate this type of loan.

But Buchanan said this did put brokers at

“Diversification is not only a growth strategy or a new income stream, it’s a retention strategy. Brokers are learning that if they don’t offer commercial and asset finance, someone else will” Brad Cramb, Lendi Group why do you have to jump through those serviceability hoops?”

If nothing had changed on affordability and the bank was willing to accept the risk, the regulator should step in and allow it to occur, Buchanan said.

Lam said that, pleasingly, innovation was occurring, with some lenders offering simple

risk by not validating income documentation and making sure the loan could be serviced.

He said when it came to competition, there were a number of lenders heavily scrutinising deals, trying to get to a ‘no’, and there were others, particularly second-tier lenders, trying to get a ‘yes’, and their market share was increasing.

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With residential mortgage broker market share at a record 74.1% and aggregators’ growing focus on diversification into commercial and asset finance lending, how are you equipping your brokers to take advantage of this sector and grow their businesses?

Sale said outsource Financial had identified that commercial and asset finance was going to be the “next big thing” for brokers about two and a half years ago.

With a focus on training and education, she said outsource had created mentoring programs for its members, enabling residential brokers to get into commercial and asset finance. “We worked with the lenders on this, and that’s been extremely successful.

We’re seeing a much more diverse broker out there.”

Residential brokers moving into this space usually started off with asset finance, Sale said. More and more brokers were diversifying, so working with lenders on the mentoring program and accreditation process gave them some comfort.

“They’re not going to just go around accrediting brokers with zero experience, so we have to build around it. We’ve got to create that path for them.”

50

King said clients weren’t getting what they needed from business banking. “They traditionally always just went to their existing bank, and in this changing environment, they have to go elsewhere for solutions,” she said.

“The major banks don’t return phone calls, you can’t get a small business banker, you can’t get someone to do something small, because it’s not worth it [to them] or their KPIs for that month.”

This was where the broker channel had to come to the fore. “They will be seen to be independent [and] have the right advice and solution for what the client needs instead of pigeonholing them to the one bank or saying often, ‘no, I can’t help you’, and the client accepting that from their business bank.”

Cramb said diversification was not only a growth strategy or new income stream for brokers but also a retention strategy. Brokers were learning that if they didn’t offer commercial and asset finance, someone else would.

“They’ve got to be able to offer that breadth of product range,” said Cramb.

For Lendi Group, it was about providing brokers with options and support, whether they wanted to specialise, or have a referral arrangement if they didn’t want to do the deals themselves.

Foley said diversification meant “different

things to different brokers at different times”.

“We’ve had some where their first diversification strategy was – use more lenders. Keep doing resi, you’re good at that, but you’re too focused [on particular lenders] and you’re falling into habits, so let’s diversify, and it’s worked.”

Foley said brokerages could also diversify by hiring someone from a different background to their team; for example, all-male brokerages bringing a female broker on board.

“You can also look for different types of clients. If they’re all owner-occupied resi, get into investors, get into SMSF.” He said it was sometimes better to diversify this way before looking at commercial and asset finance.

Slater said it was all about changing a broker’s mindset away from focusing purely on residential. “Three years ago, it was just raining residential loans, but we’re in a different market now, and it’s important that brokers diversify their businesses.”

Mortgage Choice also focused on education, and it was important for brokers to share their diversification success stories, Slater said.

“We put a big focus on knowledge-sharing because brokers often learn the most from their peers. As soon as they share their success stories, that’s when you see traction.”

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AGGREGATORS ROUNDTABLE 2024 “The Cert IV and diploma qualifications are like a learner’s permit. It doesn’t mean you know how to drive a car. You don’t learn until you’re actually in business and doing it” Gerald Foley, nMB Diversification was not new, Buchanan said.

He remembered back in 2009 during the GFC when “everybody was screaming from the rooftops about diversification”.

“It’s OK for pundits to talk about diversifying and tell people to do it – [but] when the rubber hits the road, they need to know how, and that’s where education and training come in.”

White said LMG now has 60 people in its asset and commercial finance team and launched its first commercial tech platform within myCRM in April with significant investment in this space.

“We want to have a commercial, asset and resi platform together because, going forward, businesses are going to get bigger, there’s going to be less of them, and they’re going have to be multidisciplinary.”

White said what was missing was “how to get there”, and this would require technology, process and structure, with features such as online submissions and quoting tools.

Buchanan agreed and said that while there were some tech solutions, a lot of innovation was needed. He said SFG had started focusing on diversification, including education and partnerships, a few years ago.

“Last year our commercial volumes went up 50% through our existing network, so you can tell that the education piece and the access piece actually works and translates to opportunities.”

Lam said education was also key at AFG, especially teaching the sales teams to be better business partners for brokers. “Understanding our brokers’ needs and focusing on profitability, analytics and insights is critical.”

He said AFG brokers had large customer

52

bases with plenty of self-employed clients who they could tap into for diverse lending.

Using a McDonald’s analogy, Lam said: “They are the best in the world at what they do. When you go to Maccas, they will offer you a range of their products, including the fries and the Coke.

“It costs so much to acquire new customers.

You’ve already helped them secure funding for their home or investment – why aren’t you considering all their needs? We call it life admin: it’s commercial, it’s asset, insurances, utilities.”

Lam said AFG had built the Partner Connect platform, which enables brokers to refer customers to different platforms for their needs, such as Fintelligence (Broli Finance) for asset finance, Marketplace Finance for commercial and AIA Financial Wellbeing for life and health insurance.

“Our brokers have already seen the quick wins,” he said.

AFG brokers were also encouraged to segment customers depending on their life cycle. So, for clients over 50, brokers should ask if they could write the personal loan for their child’s first car. Lam said this built a more valuable, scalable business.

He added that if brokers didn’t want to be experts in asset or commercial, they should find the customers first and then partner with someone through a spot and refer.

Cramb said in the future there would be fewer brokerages, but these would be more sophisticated, boasting breadth and quality of service.

“We’re now a significant industry, and we have significant operators. It’s great for the customer, great for the broker and ultimately great for the industry as well.”

Marsi said diversification had been a cornerstone of LNS’s value proposition for the last 13 years. “For us, it extends beyond commercial and asset finance to include self-managed super fund lending, business finance and personal loans.

“Our discussions with our advisers are around cash flow management versus book building. Training and education is crucial.

We invest a significant amount of time

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GROWTH TREND OF FIXED VS VARIABLE RATE HOME LOANS, 2019-24 Fixed vs variable rate loans funded by month, inc. refinances (original) value

Total fixed rate housing loans

Total variable rate housing loans

60 50

$ billions

40 30 20 10

Ju

l 19 Se p1 9 No v1 9 Ja n2 0 Ma r2 0 Ma y2 0 Ju l2 0 Se p2 0 No v2 0 Ja n2 1 Ma r2 1 Ma y2 1 Ju l2 1 Se p2 1 No v2 1 Ja n2 2 Ma r2 2 Ma y2 2 Ju l2 2 Se p2 2 No v2 2 Ja n2 3 Ma r2 3 Ma y2 3 Ju l2 3 Se p2 3 No v2 3 Ja n2 4 Ma r2 4

0

Source: ABS Lending Indicators, April 2024

in the training and education of our adviser network.”

Sale said she totally disagreed with spot and refer, and outsource Financial had spent a lot of time and money on educating brokers to diversify.

“That’s what training and education is all about. More and more brokers don’t want to do spot and refer because they’re a business owner. They want to educate themselves, not build up Joe Blow over the road.”

Brokers didn’t want to give their clients to another person because they could lose the clients, said Sale.

Both aggregators and lenders needed to be on the journey with the broker, helping them to learn how to write commercial and asset finance.

White said LMG offered over 300 courses on Brokerversity, and asset finance was always in the top five. More brokers were looking to asset

and commercial finance to maximise their revenue and expand their services to customers.

Broker question from Kristie Gould: In the current challenging market, what are aggregators doing to support existing franchisees and broker members to achieve their business goals and grow their existing businesses?

Sale said outsource Financial had a major focus on training and education.

“We as an industry want to encourage new entrants to come into our industry; we want to keep it vibrant. But what we saw is other groups charging all this money for so-called mentoring, and that mentoring just wasn’t there.”

So, outsource built its own complimentary mentoring programs for broker members. The programs educate new brokers about being a business owner, with a focus on lending, prod-

ucts, compliance, technology and marketing.

Sale said they had been highly successful.

“We work with those new entrants; we sit down and do a broker business review, and we help them build to where they want to go.

They need support like that, not to pay someone $5,000 and get zero support. The stories that I’ve heard … [are] an embarrassment for our industry.”

Foley said it wasn’t as bad as it had been in the past. “I agree [with Sale], but I feel like we’ve evolved through that largely to a more structured approach”.

Buchanan said he hadn’t seen any new data, but when half of all new-to-industry brokers failed in the first two years, “we’re not doing it well”.

“I think that the regulations around new entrants and mentoring procedures aren’t heavy enough; there’s not enough weight there,” he said.

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Buchanan said people were attracted to broking by the thought of running their own business, but apart from completing their Cert IV or diploma, many hadn’t completed any business courses.

“I’d encourage further coursework in business ownership in particular, but it’s also our job to work with the partners and try to understand what they [the brokers] are trying to achieve and then shine the light on to the things that they don’t see,” he said.

“This whole thing of growing for the sake of growth, and I’ve always got to do more, doesn’t apply in every case.”

Buchanan said aggregators saw how thousands of broker businesses operated, and each business was unique.

“It’s about understanding the cost and journey to that growth. No decision is made today and then remunerated tomorrow; it’s actually a journey and needs patience and understanding.”

Slater said Mortgage Choice operated a Broker Success Program to address the twoyear dropout. It provided support with the broker’s business and other key areas such as marketing, data and technology.

He said it was important to remember that while investment in new brokers to establish

54

best practice was important, so was providing support further down the track.

Acknowledging that broker support had to keep evolving and innovating to keep pace with where the business owners wanted to go, Mortgage Choice had also recently set up the Peloton program.

“Using a cycling analogy, just think of it as

insightful conversations between members.

Foley said the Cert IV and diploma qualifications were like a learner’s permit. “It doesn’t mean you know how to drive a car. You don’t learn until you’re actually in business and doing it.”

White said LMG did not admit new-toindustry brokers; they had to work for a broker first. “Mentorship needs to be from a business owner, not from a mentor,” he said.

“We also recognise business owners want to grow – the biggest challenge is recruiting and managing staff.”

LMG helps brokerages screen and recruit brokers through its TalentForce service, then onboard, upskill and manage them through Brokerversity.

White said that when one of LMG’s brokers completed a Cert IV or diploma through Brokerversity, “they were actually qualified on the tools, know what AOL [is], know how to submit a loan, know what LVR is”.

“We get them out where they’re ready to rock and roll.”

White said LMG was also helping brokers with a profitability analysis service.

Cramb said benchmarking was “where the real science occurs, because not all businesses

“Education is key at AFG, especially teaching the sales teams to be better business partners for brokers.

Understanding our brokers’ needs and focusing on profitability, analytics and insights is critical” Them Lam, AFG the ‘chasing pack’,” Slater said. “We’ve identified like-minded businesses, who may be at different stages but which are all ready for growth, and brought them together.”

About 65 businesses are involved in the Peloton program, including Gould’s. While the program includes structured content, sessions are predominantly focused on facilitating

are created the same, but you can find likeminded businesses in the peer-to-peer”.

“How am I performing where I am in my journey is really important,” he said.

Aussie is also looking at benchmarks but from a franchise viewpoint and offers the Grow and Plus supported model, which involves a customer acquisition model or

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loan packaging service. Cramb said new Aussie brokers were supplied with qualified appointments, and the loan packaging was done for them. “So the broker can focus on earning quickly. The first eight weeks of being a broker, they’re submitting over eight to 10 lodgements because they have a fully supportive model.”

To White’s point, Cramb said the B2B problem was trying to bring in new talent and retain them, so this was Aussie’s response. “We’ve definitely seen a step change in the way that this has allowed the franchisee to bring in a new broker and keep that broker.”

White said LMG had found that the best pathway for new brokers was to start off as a customer service manager and then transition to being a broker.

He said leads were also becoming a bigger challenge for brokers coming into the industry.

“Where am I finding the next customer?

We’re finding we’re having more and more discussions about marketing than we’ve had in the last few years.”

Foley said the refinancing frenzy had also disappeared, which made it harder for brokers.

Lam said most brokers started out thinking they wanted to be a self-employed broker, not thinking, “I’m going to be a business owner

“Clients aren’t getting what they need from business banking … brokers are seen to be independent, [and] have the right advice and solution for what the client needs” Adriana King, Expand Equity one day, and the GM, the counsellor, the HR manager and accountant”.

HR strategy was critical to the success of any business, he said. “So, when you’re looking for new talent, [it’s about] understanding where you want to be as a business over five years, the customer experience that you want to deliver, the process underlining all of that, and then plugging in the people.”

AFG focuses on helping broker members find the right people for their business. “If you need an ops manager or sales manager in five years, bring them in as a rookie and train them for five years,” Lam said.

Building a sustainable business came down to the contractor versus employee model, he said. “Our members, rightly so, are hesitant with the initial upfront costs of the employee model, but longer term, it could improve the valuation of your business.”

Lam said AFG had created a learning and development service enabling any of its broker member groups to brand their own learning portal “based on their content and our content”.

“To your point, Tanya, there’s some different set-ups out there,” Lam said. “We have a structured approach to mentoring and have partnerships with a panel of mentors, such as Mr Mentor, who we vet and approve.”

He said AFG tried to help all brokers and their team members, for example mums returning to work who “might be great at operations but don’t want to be brokers”.

“What you’re trying to do is grow a business that one day you want to sell hopefully not at multiple of trail but a multiple of EBITDA.”

Broker question from Adriana King: What is the next game changer or enhancement to your offer in the pipeline?

White said LMG had recently launched Smart Data, which was “a chance to really help brokers save time”. It was based on open banking and getting an application to a vendor using permission data rather than documents.

“We’ve seen it cut down the file time by three days … our biggest thing at the moment is how do we help our brokers save time on an application, and then through that, how we help them grow their profitability.”

Cramb said a technology-led experience was at the core of Lendi Group’s proposition, and the group was working on Approval Confidence, which provided direct integration with the lenders.

“Our vision is that that will give us realtime approval,” Cramb said. Saving time

56

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MEAN PRICE OF RESIDENTIAL DWELLINGS STILL RISING Mean residential dwelling price by state/territory, last three quarters

Sep qtr 23

Dec qtr 23

Mar qtr 23

1,250

1,000

$’000

750

500

250

0

NSW

Vic

Qld

SA

WA

Tas

NT

ACT

Australia

In the March 2024 quarter, the number of residential dwellings in Australia rose by 52,700 to 11,176,100, and the mean price of residential dwellings increased by $14,300 to $959,300.

The mean price of residential dwellings in NSW ($1,212,000) remains the highest in the country, followed by the ACT ($950,500) and Victoria ($914,300). The lowest mean price is in the NT ($511,400).

Source: ABS Lending Indicators, April 2024

and providing a better customer experience were the aims.

He said the group was also using AI for lender policy and pricing that searched in real time and provided more accurate and timely results. And phone-based brokers were being assisted with phone scripting and scoring when talking to customers, which also saved time and was valuable as a training tool.

Cramb said AI, data and open banking were the next big frontiers in broking. Aussie had also just launched a new app that provided customers with property valuations and reports but “also have the broker

business in their pocket”, allowing brokers to interact with customers.

“We’re very close to being able to do the processing of the loan through that app as well,” said Cramb.

Slater said realestate.com.au played a huge role in powering Mortgage Choice’s engagement of customers and consumers.

“Mortgage Choice is a lead gen business in its own right, so adding the leads from the Mortgage Choice website with those coming through from realestate.com.au now drives about 10% of value from a settlements perspective,” Slater said. “Having access to realestate.com.au’s audience of 11 million

Australians is really, really powerful for us.

And we’re working to bring that audience together with Mortgage Choice’s brokers to help more consumers find and finance property in the one place.”

Slater said Mortgage Choice was empowering brokers with technology and focusing on driving efficiencies and connecting consumers with a broker at the right time.

“It’s all about making those franchises as profitable as possible. Data is a really big focus area for our business, and thanks to REA Group’s PropTrack, our brokers and their customers have access to rich property insights, reports and valuations.”

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Lam said AFG’s view was that the best way to attract customers was to combine AI with humans. “The humans being our brokers, our broker being the champion, and providing them choice on the tools that they want to use.”

Lam said because tech was moving so fast, AFG was moving away from building one system for use. “It’s about what are the best tools in market and if they’re safe to use and we can vet them – how do we put that in our brokers’ hands?”

What impact will the NSW Supreme Court’s decision that aggregators are liable for payroll tax have on you and your broker members? Do the exemptions go far enough in easing the burden on brokers?

White said the payroll tax exemptions didn’t go far enough. “I think it’s a reflection of the fact broking actually hasn’t changed much in 30 years. Technologies change, regulations change, but the fundamentals are still the same.

“We still don’t believe that it [payroll tax] should apply, but the judge in our case, Justice Richmond, decided that we were wrong.”

White said the implication of the Federal Court’s decision was that there would be fewer single-broker operations. “The government’s decided that people can’t be in busi-

“Diversification has been a cornerstone of LNS’s value proposition for the last 13 years. It extends beyond commercial and asset finance; it’s predominantly focused on SMSF lending, business finance and personal loans” Daniel Marsi, Liberty Network Services ness by themselves for themselves and need to be in business now with other people.

I think that’s a sad indictment of what the government’s done.”

He said there would be more consolidation of brokerages, with the trend of bigger businesses continuing to accelerate. “People will employ more staff. There’ll be less businesses; they’ll be bigger. I think that will probably be good for customers. It’s not necessarily good for brokers who don’t choose to do that.”

White described it as sad day for individual brokers, who would be forced to consolidate with other businesses.

“The exemptions don’t go far enough,” he said. “No doubt there’ll be more legal cases coming up, and there’ll be more tests of this

[law], and we’ll learn more as we go through.”

White said the NSW government was taking money out of the system – a system the industry had invested more in for customers and compliance.

“They went after doctors last year; they’re going after the gig economy.”

King said, “We already pay 10% GST on our services and can’t claim a GST credit on the income we distribute to ourselves personally.

“The payroll tax shouldn’t exist at all and would add 5.45%. Adding to our personal tax rate is a prime example of government taking multiple clips along multiple lines of small business.”

Sale said the industry was not going to sit still on the issue of payroll tax. “We’re going to be going straight to the government; we’re

MORTGAGE BROKERS INDUSTRY SNAPSHOT

Population of mortgage brokers

Ratio of mortgage brokers

19,236 Up to 19,456

1

to

1,350

Brokers per head of the Australian population

Oct 22–Mar 23 Compared to 1 broker per 1,386 Australians in Oct 21–Mar 23

Source: MFAA Industry Intelligence Service 16th Edition, October 2022 to March 2023

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FEATURES

AGGREGATORS ROUNDTABLE 2024

going to lobby it big-time, just like we did in the royal commission. We’re just not going to leave Sam and a couple of others out on a limb; we’re all going to get in on this together.”

Sale said she believed the industry would come out of it all right because “the government has indicated to us that they support what we’re saying”.

Foley said the judge had stated that the payroll tax was capturing businesses it wasn’t intended to capture.

White said LMG was keen to lobby on behalf of brokers on this issue. “What’s frustrating is that it’s taking away the option from individuals to run the business the way that they should.”

He said LMG would have to employ extra people to deal with the tax.

Lam said that sadly this had the potential to be a national issue as tax regimes were largely harmonised across the states, meaning that if one state introduced or enforced a tax, the others generally follow suit.

Buchanan said the judge was quite objective around the rules. “It goes to show that we are a complex industry, and it takes a lot of learnings to understand it,” he said. “We’re vehemently against it [the tax].”

“For businesses such as yours that are looking to scale up, get your model right now, get your offer ready, because they’re coming,” he said.

White said LMG was most worried about brokerage businesses that were on the payroll tax threshold in each state. He said these employed staff that had more than $1 million

“More and more brokers don’t want to do spot and refer because they’re a business owner. They want to educate themselves, not build up Joe Blow over the road” Tanya Sale, outsource Financial Regardless of the payroll tax, the rate of individual brokers joining brokerages had never been greater, Buchanan said. “I think we’re going to see more consolidations and bigger businesses. I think this ruling will give that a bit of shove along.”

SFG also didn’t accept new-to-industry brokers for a number of reasons, Buchanan said, and SFG brokerages were growing by proxy because of that.

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in commissions going out to other brokers.

“That’s where the liability is going to sit.”

“What we’re trying to do is actually make sure that bigger businesses have the right structure in place to able to manage this going forward,” White said.

“If you’re a one-man band you get caught; if you’re in the sweet spot you’re OK; if you’re too big, you get caught.”

One of the payroll tax exemptions involved

an LMG broker using outsourced services 10 times in one year.

Buchanan said that while White described the LMG court appeal against the payroll tax as a loss in some areas, there were many positives in the exemptions.

As more and more brokers reach retirement age and plan to leave the industry, how are you assisting them in successfully exiting but also attracting, training and retaining new brokers to take their place?

Slater said succession planning looked different for every franchise owner, depending on their business, how it was structure and the owner’s goals.

“It could be a family transition, it could be a plan for retirement via expansion and then ultimately a sale, or a partial book sale into the network. We are active with our network on this subject, and it’s about planning ahead.”

Mortgage Choice’s recruitment team was always looking for new brokers who could play a role in retiring franchisees’ succession plans, Slater said. “When we find someone who is looking to buy a business, we can connect them with a franchisee who is open

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NSW PAYROLL TAX EXEMPTIONS

Engaging an offshore loan processor

Engaging a family member in the business, on the basis that it can be shown that the family member is doing genuine work for the business. Evidence would include a job description and an ability to show consideration being made to that person in exchange for their services

to a partner joining their business as part of their succession plan.”

The benefits of partnering with a broker meant the franchisee could scale back over an agreed time frame while the broker developed skills and business knowledge, learning from an experienced franchisee.

Cramb said the industry was going through

“Our state-based relationship managers have a very high-touch, engaged relationship with their brokers,” Sale said. “When they identify a broker is considering growing their team, be it with brokers or support staff or they are considering their options to retire, we assist them in working out a strategy that is right for them, be it attracting

“Our role as an aggregator is to be working and innovating to match where our business owners are at. We need to be match fit for the market, wherever that shifts” Aaron Slater, Mortgage Choice a generational change. “There’s an opportunity to help older brokers bring in a new generation of brokers but at the same time have a different role in their business. So we’re trying to create platforms and pathways for that.”

Sale said outsource Financial took its position “as a true business partner to our brokers seriously and work with them to be successful, whatever stage their business is at”.

talent to transition to owning the business or taking the pressure off so they can enjoy the semi-retirement that is so attractive to a lot of brokers – we help them implement the right strategy.”

Buchanan said there were many ways for brokers to plan their exit. “But the three most common that I see are sale, partnership and subsequent exit or succession. With each, SFG is able to assist, advise, value and even

Engaging another business as a genuine service provider – evidence of a contract may be necessary to establish this

Application of the less-than-90-day exemption (brokers performing work for less than 90 days) as it relates to upfront commissions paid in a financial year

Application of the ‘two or more’ exemption where a broker engages the services of a loan writer; and an agreed reduction of the total commissions to reflect the proportion paid in relation to non-labour components of a business Source: LMG

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FEATURES

AGGREGATORS ROUNDTABLE 2024

fund these acquisitions for our members.”

Marsi noted that while the industry offered flexibility and a lifestyle that allowed many brokers to work well into their 60s and beyond, it was an issue to be mindful of.

“We are focused on encouraging new entrants into the industry, whether through the establishment of new businesses or through succession planning strategies,” Marni said.

“We’re seeing an increase in the success of emerging family-owned businesses, which is a promising trend. But we can’t rely solely on this. Therefore we are placing a strong emphasis on calibrating our mentoring programs to provide comprehensive support and training to new brokers, ensuring they are well prepared to thrive in their roles.

“By fostering a supportive and educational environment, we aim to attract, train and retain the next generation of advisers who will continue to drive the industry forward.”

Lam said AFG offered a comprehensive suite of education and support programs for

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“[The payroll tax means] there will be fewer single-broker operations.

The government’s decided that people can’t be in business by themselves for themselves and need to be in business with other people” Sam White, LMG its brokers, designed to help them through the different stages of their business life. “The retirement phase is no different. It takes time and considered planning to transition to retirement. We offer a buy/sell program and connect our retiring members with broker groups who are looking to grow, that meet the retiring brokers’ requirements.”

White emphasised LMG’s proactive approach in helping business owners realise the full potential of their businesses through a dedicated succession and profit analysis team.

“From initial planning to eventual transition, this team partners closely with them, offering services ranging from creating information memorandums to managing the transaction itself and everything in between,” he said.

“Ultimately, LMG is committed to partnering with businesses for their full life cycle, ensuring a seamless transition for brokers when they are ready to step out of their business, while attracting, training and retaining new talent to take their place.”

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FEATURES

TEAM DYNAMICS

Sharing our views improves work culture Employees who stay silent and don’t speak up about problems or share ideas can lead to dysfunction within a team, so inviting communication that encourages connection is the way forward, says organisational psychologist Dr Paige Williams WHETHER WE like it or not, all teams have the potential to become dysfunctional.

Why? Because they are made up of fallible, perfectly imperfect human beings like you and me.

And while each of us knows that working together and pulling in the same direction would help us accelerate progress and lift performance with less effort, making it happen can feel impossible. This is because the ways we work together are rarely logical.

Our diverse personalities, values, life experiences, skills, job demands and hopes make our relationships at work complex.

Add to this the ever-changing environment in which we live and work, and even small changes such as an increased performance goal, a shortened deadline, or variations to your team can dramatically increase the perceived risks we experience.

Mind-reading abilities The critical-to-understand term here is ‘perceived risks’.

Researchers have found that as we interact with others, our brains gather and interpret people’s facial expressions, body movements and language on an almost minute-to-minute basis, to try to understand

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their intentions and motivations in order to predict their future behaviours. This ‘mindreading’ ability is designed to enhance social connections and avoid the pain of social rejection quickly and automatically; it allows us to cooperate with people we trust, avoid those we don’t, and track our reputation in the eyes of others.

The difficulty is that people tend to overestimate their mind-reading abilities, which often leads to social friction, contributes to dysfunctional dynamics and undermines psychological safety in relationships.

no more reliable than flipping a coin. Yet how much drama is created – and consequently how well we work together – greatly depends on these snap judgements. And while drama may be the ‘loudest’ symptom of dysfunction, it has a quiet colleague that is equally powerful.

The silent risk Have you experienced moments at work when saying nothing feels like the safest choice?

Yup, me too. What is it about speaking up at work that makes it feel so hard?

Speaking up feels risky, and silence feels like the safer bet, because in the moment, silence seems cost-free. The challenge is that it carries a significant hidden cost For example, if asked to predict how much different colleagues like us, our efforts are likely to be little better than random guesses. Similarly, when it comes to accurately predicting if someone is lying or telling the truth, our judgements tend to be

The uncomfortable truth is that we are wired for avoidance and have a natural aversion to mistakes, failures and the feelings of shame and embarrassment that can come with them.

There is a cost to these experiences that

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simply doesn’t exist if we maintain silence.

This hardwired aversion is often reinforced through cultural norms that create a climate of ‘artificial harmony’, whereby our desire to maintain civil working relationships means we are reluctant to share our perspective, disagree or be vulnerable.

The problem is, this also makes us less willing to admit mistakes, acknowledge weaknesses or ask for help.

All of this means that speaking up feels risky, and silence feels like the safer bet, because in the moment, silence seems costfree. The challenge is that it carries a significant hidden cost. When people stop talking, they stop sharing their ideas, thoughts, questions or concerns. They stop sharing the challenges they see coming and the opportunities ahead.

Silence means that our collective wisdom and learning are not being harnessed to help

us navigate the future more effectively.

And it means dysfunctional team dynamics continue unresolved. The reality is we cannot address what remains unspoken, unacknowledged and beneath the surface.

An antidote If our teams feels that silence is cost-free and speaking up is risky, our role as leaders is to create a climate in which we flip this equation.

One way to do this is by holding space and inviting conversations that encourage connection, allow for shared meaning to emerge, and create psychological safety in the team.

Asking our team members to share their experience of the following five questions is a good starting point as they speak to the specific perceived ‘threats’ that can create drama dynamics.

1. Is it safe to stuff up, slip up and learn?

2. Is it safe to succeed and grow?

3. Is it safe to share weaknesses?

4. Is it safe to shine in strengths?

5. Is it safe to be authentically me?

Dysfunctional team dynamics are grounded in fear-based responses to perceived risks.

Building psychological safety is the antidote, but it is not a quick fix. It takes effort, attention and energy, requires nurturing, nourishment and nutrients, and may take time to bear fruit.

Dr Paige Williams is a keynote speaker, organisational psychologist, researcher, and an author of five books. Her latest book is The Leaders Ecosystem. For more information, go to drpaige.au.

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FEATURES

ETHICAL LEADERSHIP

How business leaders can learn to navigate moral dilemmas Doing what is right as a boss is not always easy or convenient, but taking an ethical approach is beneficial to business leaders and their teams, leading to sustainable growth and innovation, says Michelle Gibbings ETHICAL LEADERSHIP is critical as leaders confront uncertainty, complexity and new decisions in a world in which technology, particularly generative AI, is changing how we work, connect and engage.

Guided by a strong sense of integrity, ethical leaders respect the dignity and rights of others and strive to secure outcomes that benefit the common good, not just themselves.

Ethical leaders accept that navigating ethical challenges at work requires fortitude, a deliberate approach and a willingness to make tough decisions – doing what is right, not what is easy or expedient. If you want to elevate your ethical leadership, it’s time to get ready.

Recognise the benefits Deloitte Access Economics and The Ethics Centre in Australia found that a 10% improvement in ethical behaviour across companies and government organisations would add $45 billion to Australia’s GDP annually.

Taking an ethical approach benefits your leadership, drives innovation and creates a more sustainable platform for your organisation to grow. Consumers and clients also

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increasingly expect and want to work with ethically aligned organisations.

Get ready to be tested All organisations face ethical issues. These can range from addressing privacy and security concerns arising from AI, to ethically managing global supply chain and sustainability issues. By their very nature, ethical dilemmas often involve ambiguity and uncertainty, and they always involve decision-making.

As a leader, you will face choices when working through ethical issues, such as the level of transparency; balancing the collective good with organisational outcomes; the best approach to workforce changes; and how to address societal and environmental impacts.

When confronting choices, ask yourself: how does this align with my values, and if I make this decision, does it represent the leader I am?

Be alert to ethical challenges In the busyness of the working day, it can be easy to overlook ethical challenges.

Therefore, it’s important to be alert to weak signals and open to assessing what is

happening around you. Be curious, and question things. If something doesn’t feel right, it’s worth investigating further.

It also helps to identify potential ethical challenges in advance so you’ll be more prepared should they arise. One way to do this is to adopt a risk assessment process in which you regularly identify potential sources and dilemmas.

Through this process, you identify potential issues and the options for addressing them, and you can assess how those options align or misalign with your organisation’s values. For example, new technology may facilitate the ability to collect and analyse vast amounts of personal user data, which could be monetised. However, doing so would go against the organisation’s values of putting customer interests first.

Know the impediments Complex and adaptive ethical problems require deliberate focus and an acute awareness of any bias or limitations that impede decision-making. It can be easy to fall into the trap of making easy and popular decisions and consequently take the path of least resistance. However, ethical dilemmas require leaders to think broadly and deeply.

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FEATURES

ETHICAL LEADERSHIP

You must challenge your cognitive thinking patterns to identify any bias or assumptions filtering into your decision-making.

In such situations, it helps to use a structured decision-making process where you are explicit about what you know and what you don’t know. The most effective way to do this is to detail the knowns and unknowns.

For example, what do we know for sure?

What are we curious about? What is uncertain and unclear? In looking at those details, challenge yourself (and others in the room) to consider whether information or data is being ignored because it goes against a world view, belief structures and assumptions the decision-makers hold.

Decision processes like this take time, so be considerate and deliberate and recognise the value of deep conversations.

Build support structures Robust ethical frameworks, processes and systems support ethical decision-making.

As part of building your organisation’s ethical approach, outline how you and your team will work through ethical challenges as they arise.

For example, your framework may specify the key steps to take when a potential ethical issue is identified, and how to best engage in open dialogue, transparent communication and effective stakeholder engagement.

The first step might be to bring together the relevant parties to gather data and critical insights so they can openly and robustly debate the challenge and ensure that everyone fully understands the risks and consequences.

Next, the group may work through the best options to address and weigh each of these options using agreed-upon decision criteria. That decision criteria can balance expectations, needs and desired outcomes across stakeholder groups.

The last step may involve socialising the

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When confronting choices, ask yourself: how does this align with my values, and if I make this decision, does it represent the leader I am? preferred approach to key stakeholders to get additional input or buy-in before the appropriate person or decision-making body makes a final decision.

Know who you are listening to As you work through these ethical challenges, being conscious of who you are listening to and who is being sidelined is critical. Create space to hear different voices by asking questions and ensuring participation in the process from a broad range of people.

Remember, the person with the dissenting opinion or asking the probing questions often helps you see the issue from a different perspective. Also, be aware of gatekeepers who control the flow of information to and from you. If access to you is heavily managed, securing a realistic assessment of what is happening and its consequences is harder.

Encourage your team Ethical leaders support their team members when facing ethical challenges by rolemodelling ethical behaviour. So, as part of your ethical leadership approach, foster a team dynamic that actively encourages your team to discuss ethical challenges.

This means you genuinely listen to them when they raise concerns and are consistent in your approach. Doing so sets a standard and tells your team that you have their back and are committed to creating a psychologically safe work environment in which ethical behaviour matters.

Michelle Gibbings is a workplace expert and the award-winning author of three books, including her latest, Bad Boss: What to Do if You Work for One, Manage One or Are One. For more information, visit www.michellegibbings.com.

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PEOPLE

BROKERAGE INSIGHT

Free-thinking approach to lending The freedom to source clients from all over Australia, along with work flexibility and a supportive team environment, were the drivers behind Wollongong’s Jennifer Lemme becoming a mortgage broker at Liberty Network Services FREEDOM AND FLEXIBILITY – these are the factors that attracted Jennifer Lemme to mortgage broking, a decision that led to her building a successful business.

“I started my employment journey as a high school maths teacher after completing my Bachelor of Mathematics and Diploma in Education,” says Lemme. “Six years ago, I

stand real estate as I was a director and owner of a real estate agency years earlier.

“I understand lending as my parents were actively buying properties when I was growing up. My first experience with a broker was in 1998 when they were few and far between. I understood the concept of letting someone ‘do the walking for you’

“Clients that have multiple loans, such as car loans, personal loans and even credit cards, have consolidated their debt to reduce their repayments” decided that I wanted a career change, and my focus was owning my own business to be able to leverage time and have flexibility in my work hours. I started new-to-industry and reached out to Liberty, as they were a lender as well as an aggregator with a panel of lenders.”

Joining Liberty Network Services (LNS) meant Lemme had “no restrictions on where I could work and who I could work with” as it’s not a broker franchise. “They are a national company, and I have clients in all states,” Lemme says. “There are no limitations on where I can work and with whom I can work.”

Lemme’s LNS Wollongong brokerage has grown organically through word of mouth, including recommendations from clients and referrals from associated parties. “I work with a few key real estate agents, and I under-

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instead of me walking into every bank.”

Apart from Lemme, the brokerage team includes LNS network sales manager Barbara Hogan and Liberty advisers across the network.

Hogan is a vital part of the business, Lemme says. “She helps me with my business

plans, day-to-day running, and helps me to stay focused and connected to my peers across the network. We are very much a family with a great culture and compassion for one another. There is never any competition with one another but rather an outpouring of expert advice through our various platforms.”

Lemme says LNS managing director Brendan O’Donnell, who is retiring, has been a great influence on her. She also praises LNS state manager Daniel Marsi, who is taking over as CEO. “They keep us together as a team rather than competitors to one another.

They keep us focused and informed on all levels of the lending industry. You can lean on the LNS team for technical support, to [discuss] scenarios, having access to all staff, especially assessors.”

LNS Wollongong provides a range of lending services covering residential lending, including refinances, and investment loans as well as SMSF, commercial and car loans.

Lemme says she listens to what her clients

LIBERTY SUPPORTS CHILDREN IN NEED “I am proud of the work that Liberty Network Services does with the Mirabel Foundation, making a real difference in the lives of vulnerable children all over Australia.

With more than 1,400 children aged from zero to 17 years under their care, Mirabel stands as the sole organisation dedicated to aiding children affected by parental drug use, ensuring these children experience the semblance of a normal childhood despite their circumstances.

Each year at our national conference, Liberty hosts a special evening dedicated to raising funds for Mirabel. Liberty advisers also support this foundation directly through the Friends of Mirabel Program.” – Jennifer Lemme, mortgage broker, Liberty Network Services

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LNS WOLLONGONG AT A GLANCE Owner: Jennifer Lemme Location: Wollongong Services: Residential lending, including refinances; investment lending, SMSF, commercial and car loans Number of employees: 1

“Flexibility and agility are essential … and being able to change and diversify is crucial for nurturing a healthy business” require and then provides tailored solutions, communicating openly and honestly and explaining complex terms and solutions.

“I keep my clients informed and updated; I provide continuous support and assistance. I have a deep understanding of various financial products. I communicate with my clients; I am responsive and build rapport. I have learnt how to think creatively and find solutions to meet my clients’ needs.”

Lemme’s clients include first home buyers, investors, and SMSF and commercial borrowers. “Liberty really does tailor its lending to these types of buyers, as well as offer a variety of non-conforming lenders.

We have an increase in these.”

Lemme has noticed an increase in investment lending and SMSF lending. “People want to take charge of their own superannuation and what they can do with it. Property seems to be what they want to invest in instead of their industry superannuation funds.”

She says her clients have had to learn how to budget, and some have had to use their savings to cope with rising rates and inflation.

“Clients that have multiple loans, such as car loans, personal loans and even credit cards, have consolidated their debt to reduce their repayments and make life a bit better in terms of expenses.”

Client retention and acquisition are both important to her brokerage’s growth, Lemme

says, and require “understanding the market and how it can change, being adaptable and being able to diversify with the lending products you offer”.

“I focus on providing exceptional service, nurturing [clients] so they are likely to recommend you to someone they know.

Word of mouth is the most powerful tool in this industry. I attend networking events and have partnerships with real estate agents, accountants, financial advisers, as well as other professionals.”

Lemme continuously seeks feedback from clients so she can enhance her business practices and strengthen client relationships.

“Flexibility and agility are essential in a changing market, and being able to change and diversify is crucial for nurturing a healthy business,” she says.

She relies heavily on her knowledge of Liberty’s products and the niches it offers, as well as the policies and products of other lenders, to match clients to the right lender.

“I call myself a matchmaker,” Lemme says.

She is also broadening her reach through her lemmebyourbroker page on Instagram.

“My future goals are to collaborate with a variety of small businesses to create greater reach through our existing client base and contribute to a local charity or cause – raising funds while raising awareness,” Lemme says.

“I’m a big believer in supporting local community businesses and would like to contribute more to helping small businesses have a presence as well.”

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PEOPLE

OTHER LIFE

TELL US ABOUT YOUR OTHER LIFE Email antony.field@keymedia.com

“Give it all you’ve got a nd play ea ch day as if it’s you r last”

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Years’ experience as an AFL coach and player

7

Ironman events completed in Australia and New Zealand

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Finals victories with the Killarney Vale Bombers

PUNTING FOR PROSPERITY John Pidgeon, director of Solvere Wealth, blends AFL coaching, life lessons and mortgage expertise to empower others IN THE grand arena of AFL, property coach and buyer’s agent John Pidgeon began his coaching journey in 2000 in regional Victoria while still actively playing the game.

“A fiery passion for the sport fuelled my coaching endeavours,” which started with the under-17s, he says.

For over 24 years, Pidgeon has worn the

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boots of a player and wielded the clipboard of a coach, and this has shaped his understanding of the game and life.

By 2012, he had led the Killarney Vale Bombers to three finals wins and one grand final loss.

From coaching under-9s to seniors, Pidgeon has been in the trenches at every level. “Coaching extends way beyond the

field,” he says. “It’s a philosophy applied to life.”

Pidgeon, author of Sort Your Property Out, is also an Ironman, having completed seven Ironman Triathlons between 2008 and 2018 in Australia and New Zealand, with three finishes in under 10 hours.

“In the end, it’s about empowering people to reach their full potential.”

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