Elite Business Writers, 2009

Mortgage Business’ inaugural Elite Business Writers ranking has clearly confirmed one reality of broking: the relationship between quality and quantity.

QUALITY COUNTS

Who are the industry’s leading business writers?

Mortgage Business is proud to release its inaugural Elite Business Writers ranking, shining the spotlight on the brokers who generate the most business, and the best.

Against the background of an industry that is moving rapidly towards licencing, the Elite Business Writers ranking is based on both a qualitative and quantitative analysis.

So why is quality so important when rating the industry’s elite? Because quality is the bedrock of the broking industry’s future. An industry that is focused on quality will instil greater confidence in consumers – which in turn will lead to greater opportunities for business growth.

Consumers are already showing a growing willingness to turn to brokers to meet a range of financial services and product needs, a situation that looks set to continue.

Mortgage Business believes that it is the quality operators who will drive the broking industry to new heights and increase its potential to meet borrowers’ needs across a broader spectrum.

Our 2009 Elite Business Writers have excelled in both their client service focus and their approach to business.

Not only are they the industry’s leaders but they have reached great heights in what has been a challenging year.

I’d like to thank all the brokers who took the time to participate in our research process, the lenders who have worked with us in reviewing the nominations, and the Commonwealth Bank for its support in making this inaugural ranking possible.

Alex Whitlock

publisher

Mortgage Business

LEADING THE CHARGE

We have all heard it said: it’s quality not quantity that counts; yet looking at the industry’s top performers recognised in the Elite Business Writers, it’s plain to see that both exist side by side.

And in the home loan business quality has never been more important.

In the current volatile market conditions borrowers are increasingly vulnerable to poor quality recommendations. It is therefore essential that the industry as a whole continues its march towards greater professionalism and strives for the very highest quality service for the borrower.

This new ranking of our industry’s top professionals is an important initiative by Mortgage Business – and Commonwealth Bank is proud to support it. All the brokers who have made it on the ranking are to be commended for their focus on quality.

At the Commonwealth Bank we are committed to supporting our broker partners but in order to achieve this we are also very serious about quality. Error-free submissions, high conversions and minimal arrears are all essential requirements to enable us to work effectively with our partners and ensure the best possible experience for the customer.

It is our belief that a quality broker is an efficient and profitable broker – and the outstanding results achieved by the Elite Business Writers bares testament to this philosophy. The Commonwealth Bank is committed to partnering quality brokers and we look forward to seeing them thrive in the years to come.

Congratulations to the Elite Business Writers of 2009. You are leading the way.

Kathy Cummings

executive general manager third-party banking

Commonwealth Bank

THE INDUSTRY MATURES

Mortgage Business’ Elite Business Writers ranking highlights what those at the forefront of the industry already know: that there is a clear relationship between quantity and quality/

Environmental forces have been behind much of the change the industry has undergone over the last 18 to 24 months.

Unprecedented market conditions have decimated lender numbers, particularly at the smaller end of the scale. Originators have not fared well either.

The subdued lending environment has also had a major impact on the industry.

In the wake of the GFC, lenders moved quickly to claw back shrinking margins by cutting broker commissions, tightening their lending policies and cutting loose brokers they no longer had the appetite to deal with.

But as the Elite Business Writers ranking shows, the tough environment has led to the emergence of a more savvy and dexterous broker.

Aggregators, lenders, and consumers have demanded higher quality standards from brokers – which are being reflected in the quality of business they are writing as well as the service they are offering clients. But has the demand for quality business also been reflected in brokers’ bottom lines? Or is the industry heading down a one way street?

Volumes across the 50 professionals that made the cut clearly demonstrate that quality brokers are also the industry’s top performers in terms of the value of business they write.

And while the drive for quality has been uncomfortable for some, the broad consensus is that quality is where the future of broking lies.

Diversification has also been a clear driving force for many of the country’s leading business writers. In years gone by a broker’s success depended largely on residential volumes. Today this is no longer relevant.

While strong residential volumes still lie at the core of the vast bulk of successful mortgage broking operations, it is the additional services, products and resulting revenue streams that mark out the top performers.

And there is still significant scope for growth. A large number of brokers now provide their clients with products above and beyond residential loans, such as insurance, transaction accounts and personal loans.

With this in mind the launch of Mortgage Business’ Elite Business Writers could not be more timely.

Not only does this groundbreaking report recognise the brokers who lead the field, it provides valuable insights into the business practices, attitudes and vision of today’s most successful operators.

Methodology

To be considered for the inaugural Mortgage Business’ Elite Business Writers ranking, brokers had to have written a minimum of $30 million in residential mortgages over the 2008-2009 financial year.

They also had to have met at least two of the following three criteria:

º Minimum conversion rate of 80 per cent

º Less than one per cent arrears

º 90 per cent of submitted business did not require

a re-work

To ensure the quality and transparency of information brokers provided in relation to their volumes and cross-sell activities, data was cross-referenced against that held by the broker’s number one lender. As a result of this process, a number of brokers narrowly missed out on the quality criteria despite strong loan volumes and cross-sell figures.

Once this process was completed, brokers’ volumes for residential business plus non residential business were combined to give a total business written figure, which determined the overall Elite Business Writers rankings.

The final 50 were then assessed against a range of criteria to come up with individual top 10 rankings for key business indicators such as residential volumes, mortgage size, number of mortgages written, insurance volumes and number of mortgages that included a cross-sell.

These sub-rankings highlighted not only consistency between the top performers but also the business focus of many brokers towards a more diversified offering.

Indeed, of the top ten performing brokers, four brokers’ residential volumes accounted for less than 50 per cent of their total business written.

THE QUALITY GAME

Mortgage broking is now unquestionably the business of professionals – and where quality reigns supreme.

There is a sea-change occurring in the mortgage industry that is set to dramatically re-shape its future.

It is the discernible shift in focus to the quality rather than quantity of broker written business. And the industry is set to reap the benefits.

A number of factors are driving the change: among them, the impact of the global financial crisis, the drive by lenders for greater efficiencies, and the industry’s natural evolution and maturation.

Some brokers – such as Mortgage Business’ Elite Business Writers – have embraced the new environment. They’ve actively sought to lift the quality of the business they submit to the banks and are achieving strong conversation rates and low

re-work levels, which are translating into lower arrears on the mortgages they write.

All of this year’s Elite Business Writers are focused on meeting these quality metrics.

They are the brokers who are redefining the third-party industry, setting the standard for all brokers to follow.

Brendan O’Donnell, the CEO of Choice Aggregation Services (Choice), says brokers who are at the top of their game in today’s market are not there by chance but as the result of “good business planning, sound procedures and a clear understanding of both the client’s and lender’s requirements when it comes to writing business”.

He says the aggregator’s ‘Platinum’ – or top performing – brokers share a number of traits in common, including a focus on quality “at every touch point with their clients”.

“They understand that client acquisition is key and retention paramount to their business’ future… They’re focused on continuing education, they’re focused on business building and prospecting, and they are continually investing in their businesses – be it time or resources,” he says.

Aussie’s CEO Stephen Porges says quality and quantity tend to go hand-in-hand.

“[The] quality brokers get a reputation as such and then find themselves writing more work,” he says.

Anatomy of an elite broker

Mr O’Donnell says he has identified four key traits in the successful brokers he has encountered: a client-focused approach to their business, a sound understanding of product and policy, a desire to adapt to a changing market and the drive to work hard.

“These four pillars are present with every successful broker that I have met,” he says.

Mr O’Donnell says both new and experienced brokers who build their businesses around their clients will prosper in the long run – good news for those brokers who have yet to realise their full potential.

But he says the days of the ‘right place right time’ brokers are disappearing fast. “I believe that there will be an ever-widening gap between the fortunes of the quality operator and the fair weather broker,” he says.

Mark Haron, principal of aggregation group Connective, says the number one trait all elite business writers have in common is passion. “If you have a passion for what you do, this will shine through in your work and your abilities to offer excellent customer service,” he says.

Elite business writers generally also have a “caring nature”, says Mr Haron, “but they are competitive at the same time. They want to do what is best for their client and they want to do it better than anyone else.”

For Aussie’s Stephen Porges, elite business writers have three key qualities: process, perseverance and professionalism. Without all three, he says, a broker will attract neither quality business nor experience high conversion rates.

“Process means each broker is focused on a holistic view. Perseverance is extremely important in any line of work. Professionalism is what keeps clients coming back time and time again,” he says. “These three traits are common among all top quality brokers and they are the three traits we really encourage at Aussie.”

Into the future

One of the main benefits of the shift from quantity to quality in mortgage broking is that it has also led to a more professional, client-focused approach on the part of brokers.

The last 18 months to two years have seen a marked improvement in the industry’s level of quality and professionalism, and the introduction of the new licencing regime is set to drive this even further.

Aggregators have had to up the professional ante to keep their accreditation, while the MFAA now requires all brokers to obtain their Certificate IV in order to maintain MFAA membership.

The banks are also linking quality business to broker commission rates, both individually and at a group level.

That means brokers who are writing inferior quality business will be either forced to lift their game or be penalised financially.

Aussie’s Stephen Porges says the industry has taken big steps towards creating a more professional culture. But he says more could be done to improve the level of education among brokers.

“Education plus knowing your products is what makes a good broker great,” he says.

Mr O’Donnell says the banks have placed the broking industry under considerable pressure in their emphasis on greater quality business, and in many cases, increased volumes.

He says brokers have largely risen to the challenge, with most moving to online lodgment over the last 18 months and working hard to improve the quality of the business they submit.

But he says while broker quality is improving on average it is being dragged down by the lowest tier of brokers, and predicts a further segmentation of the market over the next 12 months.

“This will be driven by the advent of licencing, tougher standards required by aggregation groups, and the overall requirements of the banks,” he says.

Mr Haron says the onus is on key industry stakeholders to improve the overall quality of brokers in the industry.

“I think 20 per cent of brokers have lifted their game over the past six months, and as licencing edges closer I think we’ll see the remaining 80 per cent either pick up their socks or pick up their bags and leave the industry,” he says.

According the Haron, both brokers and lenders need to be made accountable for their mistakes – “there needs to be a better system in place for tracking their arrears”, he says of brokers – but the blame game needs to stop.

“As it stands, I think brokers are responsible for about 60 per cent of all the errors in the industry, while lenders are responsible for the remainder,” he says.

“[But we] need to stop shifting the blame and take responsibility for our own actions.”

PROFILE: Finding your niche

Moshe Moses has found success in providing a one-stop service to his target market

Moshe Moses makes his living from writing loans for high net worth clients.

It’s his ability to successfully cater to the needs of niche markets such as this that is behind his success – as well as “passion, knowledge and hunger”.

“You need to be hungry for success, have a passion for your craft and a sound knowledge of the various products on the market,” he says.

Having worked for one of the major banks for a number of years, Mr Moses knows and understands the lending process better than most. He says knowledge is often the key to success in any industry and mortgage broking is no different.

But he says it is equally important to provide the customer with a satisfying loan experience. And he believes that like attracts like. A high net worth client that has experienced exceptional customer service, for example, is more likely to refer the broker to a friend or family member in a similar financial position to their own.

“A lot of our business is repeat, so a positive customer experience is crucial to our success. If you don’t make a good first impression, you won’t be given the chance to make a second,” he says.

“You will do well to treat your customers well.”

When it comes to his customer service strategy, Mr Moses likens it to that of a private banking experience. “We want to fulfil our customer’s every need and give them no reason to approach another bank or broker,” he says. “That is what we try to achieve every day.”

Mr Moses and Niche Lending have earned a reputation for quality among the major lenders – so much so that when Mr Moses submits a loan, he can be guaranteed of a fast turnaround time.

“Niche Lending is very well respected by the major lenders. They know we submit high quality applications and that our applicants are of a high quality,” he says.

“Even if we do not manage to write a lot with one lender for one reason or another, we are still acknowledged as being quality brokers and our applications are subsequently pushed through very quickly.”

But while it is helps that Niche Lending is respected by the majors, Mr Moses says it is just as important that it has the respect of his clients.

Mr Moses says the more interaction a broker has with their client, the more likely they are to receive positive referrals from them.

“That’s why I always make sure I stay in constant communication with my customer database by way of various touch points including e-newsletters, birthday and Christmas greetings and post-settlement phone calls,” he says.

“I want my clients to know that I will listen to their needs and endeavour to not only match them but exceed them.”

PROFILE: Keep it local

Wendy Higgins of Wendy Higgins Finance is well-known among her local Adelaide community for her dedication to customer service and for giving back

Wendy Higgins is one busy woman.

The Mortgage Choice franchisee, who also operates under her own name Wendy Higgins Finance, writes more than $120 million in residential loans each year and says the last 12 months have been her best to date.

And when she is not busy writing loans she is a regular face in the local community, sponsoring more than 20 different sporting clubs.

“I like the thought of giving back to the community that has given me so much in my 11 years as a broker,” she says.

The desire to serve others is one of the reasons Ms Higgins decided to pursue a career in mortgage broking, after a long career in finance working for ANZ bank.

After more than 24 years of service, Ms Higgins was given a promotion she knew wouldn’t satisfy her desire to help people. So she threw in the towel and opened her own Mortgage Choice franchise in the South Australian suburb of Glenelg.

It wasn’t necessarily the smoothest transition – she worked out of a garage when she first started broking – but Ms Higgins soon gained a reputation as an excellent broker who went above and beyond the call of duty for her clients.

As her reputation grew, so too did her business and a few years ago Ms Higgins moved out of the garage and into an office that is ideally located in the heart of Glenelg right opposite Brighton Beach.

“When I organise in-house meetings with my customers I do not have to describe where we are located because everybody in town already knows exactly where we are,” she says, adding that five per cent of her business comes from “walk-ins”.

Although a licensed commercial broker, Ms Higgins prefers to write residential loans because “they are easier and I get a great level of satisfaction helping people obtain the finance for their dream home”.

Ms Higgins writes approximately 60 residential loans each month. While her affiliation with the Mortgage Choice brand is responsible for a good deal of business, the great majority of her loan book is generated through positive word of mouth, repeat business and referral partnerships.

Ms Higgins has a referral partnership with one of the local building companies, a relationship she describes as “worth its weight in gold”.

“Our referral partner provides us with some excellent leads and we can rely on them when times are tough,” she says.

Not that times have been tough lately. Government support for first home buyers and historically low interest rates have contributed to a booming residential property market, which has generated plenty of business for quality brokers.

Ms Higgins says it is important that borrowers have a good quality broker they can rely on to help them navigate their way through the many and varied products on the market.

“Bank policies are very different at the moment, so a broker’s service is becoming more vital,” she says.

“There are also a lot of people seeking to refinance their home loan at the current time, so that has provided us with a lot of work as well.”

So what is her secret to attracting and retaining quality business?

“I don’t try and do everything myself,” she says. “One of my full-time support staff will ask each customer a series of questions to determine which loan writer would be able to service their needs the best,” she says.

Ms Higgins says her other trade secret is “track and report” – ensuring every loan transaction is monitored and the quality of loan applications remains consistently high.

If any errors do occur, they are noted and the broker responsible is alerted. Similarly, Ms Higgins sends out customer feedback forms after every loan settlement, a technique she says helps her to stay abreast of what her customers want.

“We do not want anything to slip through the gaps, which can so easily happen when writing residential loans,” she says.

It is this attention to detail and dedication to customer service that has helped Ms Higgins establish such an outstanding reputation in the market. But she is also her passion for the industry that has helped her business thrive. “Have a passion for what you do and you cannot go wrong.”

PROFILE: Customer service is king

Peter Ellis puts his success down to going the extra mile for his clients

After a decade writing loans with the Commonwealth Bank, Peter Ellis was looking for a new direction.

He knew he wanted to give customers the best deal possible. He also knew that he wouldn’t be able to do that while writing loans for the one lender.

So armed with 10 years of knowledge and experience in loan writing, Mr Ellis made the decision to part company with CBA and embark on a new career as a mortgage broker. It’s proven to be a good move, with Mr Ellis now writing $80 million a year in residential loans on average with Oxygen Home Loans.

And he is still just as passionate about securing the best deal possible for his clients, as well as providing an exceptional customer service experience.

“I believe it is a broker’s customer service that separates them from the pack and helps put them strides in front of their competitors,” says Mr Ellis.

“I like to think it is my customer service skills that separates me from my peers and keeps my customers coming back.”

Communication is core to Mr Ellis’ customer service proposition. He will call a client up to 20 or 30 times during the loan process: “I make sure a customer never calls me to check on the progress of their loan. I want to be one step in front of them at all times”. He will also make follow-up calls post settlement.

He also likes to send birthday and Christmas cards, and “call every few months just for a friendly catch-up”.

“I like to keep in touch with all my clients,” he says.

Mr Ellis says repeat business accounts for around 40 to 50 per cent of business, with the balance coming from a combination of client referrals and referral partnerships.

Oxygen Home Loans has a strong referral relationship with McGrath Real Estate in the Sydney suburb of Edgecliff, which provides Mr Ellis with a substantial number of leads. But his referral network extends far wider to include other real estate agents, builders and even financial planners.

As well as strong referral partnerships and the ability to provide an exceptional customer service, Mr Ellis says a passion for mortgage broking is what a broker needs to achieve success in the industry.

“Beyond these three things, I believe a broker also needs to have sound product knowledge and the ability to learn from their mistakes,” he says.

Coming from a banking background, Mr Ellis had plenty of loan writing knowledge and skills when he started his career – but with the one lender.

Embarking on a career in mortgage broking meant he had to educate himself about what products other lenders offered and the differences between them.

During the learning process, Mr Ellis admits he made the occasional error. But he quickly learned from his mistakes and now boasts an 80 per cent plus conversion rate.

“My biggest tip for brokers is to never fear failure. You will make errors and that’s natural, just make sure you can learn and grow from your mistakes.”

PROFILE: A commercial success

Mike Coombes reveals the secrets to his success

With than 22 years’ experience under his belt, it’s no surprise that Mike Coombes of Southshore Finance is one of the nation’s top ranked brokers.

And having been through many financial cycles and come out the other side, he knows that it takes more than luck to succeed in the industry.

Mr Coombes began his career with a local ANZ branch upon finishing high school, spending five years there before moving on to roles with a credit union and finance company.

In 1987 he was approached by an investment broking company that was looking for an in-house broker.

He quit his credit union job at the beginning of October 1987 with a plan to take two weeks off before starting his new role. It was the beginning of a turbulent but formative period.

“It was in those two weeks that the bottom fell out of the share market,” he says.

But Mr Coombes says entering the market during its volatile state taught him some important lessons, including the value of hard work.

“As a broker, you should never expect anything. You have to work for everything and never rest on your good looks or charming personality. You have to knock on doors for them to open,” he says, adding that “excellent customer service and a passion for what you do” are also fundamental to succeeding as a broker.

Primarily focused on commercial lending, Mr Coombes says his best year was two years ago, in 2007-08. That financial year, he wrote more than $100 million in commercial loans and approximately $157 million in residential loans.

But giving preferential treatment to a client based on the size of their loan is not part of the Coombes’ client service ethos. He says brokers should never judge a book by its cover and always be prepared to put in the hard yards.

“Never prioritise deals. Every deal should be treated the same – because they are all equally important,” he says, recalling a time early in his career when he helped a client obtain a $2,000 loan for a fax machine.

While the loan seemed small at the time, it laid the foundations for a long term client relationship.

“Nobody else wanted to touch this guy because the loan was too small. I took the deal upon myself and since then I have written more than $200,000 for this particular client,” he says.

More than 65 per cent of Mr Coombes’ business is repeat, with the rest coming from client referrals and referral partnerships.

Mr Coombes says commercial brokers often find it easier to generate repeat business, provided they deliver excellent customer service in the first place.

“Commercial customers really appreciate it when you put in that extra effort. They want to be able to concentrate on running their business and we help them do just that,” he says.

And providing a good customer service is likely to create sticky customers as well.

“As their business expands, commercial clients will need more money and bigger loans, so if you treat your client with the utmost respect and successfully meet all their needs you can earn yourself a client for life,” he says.

Southshore Finance employs the KISS [Keep It Simple Stupid] method, with a flat management system and minimal red tape.

Mr Coombes says the company does not believe in boardroom meetings and prefers to keep everything transparent so that “everyone knows what is happening at all times”.

“We keep overheads as low as possible and make sure we treat our customers with the utmost care and respect – because our referrals are our livelihood.”

PROFILE: Running your own race

Australia’s number one ranked business writer Justin Doobov is passionate about helping people realise their dreams

Providing a quality customer service and having a true passion for broking have helped make Justin Doobov of Intelligent Finance Australia’s number one business writer.

And Mr Doobov, who writes more than $80 million a year in residential loans, says his passion for broking far outweighs the financial rewards that come from writing exceptionally high volumes.

“To me it is all about the customer experience. If I can put a smile on my client’s face and know that I have helped them purchase their dream home, then that is worth more than money can buy,” he says.

Mr Doobov has been a mortgage broker for the past eight years, opening Intelligent Finance six years ago.

He says it was wanting to help people that led him into mortgage broking in the first place.

“I am so passionate about my work. If I can help a customer save money by refinancing their loan or organising their insurance needs, I get really excited,” he says.

While Mr Doobov has found mortgage broking a natural fit, it took some years to discover his true passion. Having first completed a degree in engineering, Mr Doobov found he was bored and unfulfilled with his project manager position in a logistics firm.

“I knew I could only go so far in logistics and I didn’t want to have a self-imposed glass ceiling, so I went back to university to study finance and accounting.”

After graduating, Mr Doobov found himself working as an accountant for one of Australia’s largest accounting firms. But it still wasn’t quite the right fit. “I didn’t really have the personality for an accountant,” he says.

“I wanted to work in a profession that utilised my skills with numbers, allowed me to set my own limits and enabled me to help people in the process – so I guess mortgage broking really suited me down to the ground.”

Since establishing Intelligent Finance six years ago, he has not looked back. The business has grown exponentially and now boasts three support staff as well as a diversified offering that includes insurance and financial planning services.

Although Intelligent Finance’s target market is high net worth clients, Mr Doobov says he is happy to help first home buyers, mums and dads and investors.

“You never know what is going to be around the corner. What may seem like your regular mum and dad property buyer could turn into a lifetime investor,” Mr Doobov says.

Apart from a philosophy of treating all clients the same, Mr Doobov says he believes it is also important that brokers run a lean business and not spend their money before they make it.

“This may seem like common sense, but you would be amazed at how often brokers settle a big deal and rush out and buy a car before paying their employees,” he says.

Although he tries to average around $12 million in loans a month, Mr Doobov says it is important to be flexible around targets.

In fact, he does not have a hard and fast business plan, preferring to use the time it takes to write a plan in helping customers make their dreams a reality.

“Basically my business plan each year involves writing as many loans as possible and giving each and every single customer unparalleled customer service,” Mr Doobov says.

“When dealing with a client, only 30 per cent of my time is spent actually writing the loan. I spend the other 70 per cent working on other services we provide. I try to make my business a bit of a one-stop-shop for my customers.”

With 100 per cent of his business the result of positive client referrals and repeat business, Mr Doobov knows the value of good client relations. He gets great enjoyment from meeting a customer’s every need and says brokers can never go wrong if they deliver on what they promise.

“In broking, failure is not an option. You may run 380 metres of a 400 metre race and think you have done pretty well, but a customer that has put their money on you finishing that race won’t view the whole situation as kindly,” he says.

“Providing exceptional customer service is what ultimately puts bread on the table. I don’t want to do the hard sell on any client and would prefer to have borrowers approach me because they have heard positive things about my business through a friend, colleague or family member.”

So what does the future hold? Not content to rest on his laurels, Mr Doobov says Intelligent Finance is looking to diversify into areas not necessarily aligned with mortgage broking, including fitness.

But true to form, he has no hard and fast plan, preferring to play it by ear.

“The best thing about being a broker is that there is no limit to what you can achieve.”