In this episode of Elite Broker, host Annie Kane and James Mitchell are joined by Smartline’s Roxby Downs broker, Joanne Dillon, to find out how she has been carving a path to success despite the downturn in the mining sector.
This broker, who was recently crowned the Best Regional Broker at the Better Business Awards in Adelaide, discusses how she has been keeping pace in the regional markets, how broking in the outback differs to that in the cities and what she believes contributes to her success.
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Announcer: Welcome to the Elite Broker podcast. This is your host, Annie Kane.
Annie Kane: Hello, and welcome back to The Adviser's Elite Broker podcast. I'm Annie Kane, editor of The Adviser, and I'm joined by James Mitchell, Managing Editor of Mortgages, as always. How are you doing, James?
James Mitchell: Good thanks, Annie.
Annie Kane: Great! Today we're speaking about an award-winning regional broker, Joanne Dillon, a Smartline broker from Roxby Downs, in South Australia. Now, Ms. Dillon took home the award for best regional broker at the Better Business Awards in Adelaide earlier this year, and she's been carving her way to success despite the downturn in the mining sector and a tough competition in the market.
Having been in the finance sector for more than 20 years, Ms. Dillon chats to us` about how she's been keeping a pace in the regional markets, and what she believes contributes to her success.
How are you doing, Joanne?
Joanne Dillon: I'm good, thank you.
Annie Kane: Good! Hopefully you don't mind me calling you Ms. Dillon. Last time I did that, someone said they thought I was addressing their parents.
Joanne Dillon: That's fine.
Annie Kane: Good. Firstly, we should offer you congratulations for taking home the award for Best New Regional Broker at the Better Business Awards in Adelaide in February. Congratulations for that.
James Mitchell: Yeah, congrats.
Annie Kane: How did it feel to take home that award?
Joanne Dillon: I'll tell you what, it was really nice to be recognised for your contribution, that's for sure ... but also to have the an industry to recognise regional Australia, as well, which is really, really good.
James Mitchell: It's been important to us to include those categories in the Better Business Awards over the years. I was sitting next to someone at the Sydney Awards last week and ... they were saying oh wow, it's very comprehensive, this awards, in terms of regional and best community support programme and all that sort of stuff. They were quite shocked at just how comprehensive the award programme is ... but yeah I know, congratulations.
Joanne Dillon: There's a lot of regional areas across Australia, and everyone tends to focus on the metro part of the business when there's a lot of value being added from regional areas, and it's great that it's now recognised.
Annie Kane: Yeah. In terms of the segregation between regional and metropolitan, what is it that you've been seeing in Roxsby Downs specifically in terms of your home lands, like how might that differ from someone working in Adelaide, for example?
Joanne Dillon: Roxsby Downs, being a mining town, we're very much filled with time poor professionals, we just happen to be in a remote location. The expectation of the client is still exactly the same as it would be in a metro area where they want prompt, efficient service. They love the fact that they can have somebody face to face that have the same level of expectations. We have to deliver at the same level, however, we are a little bit further out from reality. We have different obstacles with regards to timelines and turnover, that those of us have experienced, that's all.
James Mitchell: Have you always worked from a regional area?
Joanne Dillon: I have, I have. I've been regional for the last 29 years of my career.
James Mitchell: Oh, wow.
Joanne Dillon: Very much a country girl, born and bred in the city. Made a huge lifestyle change back in 1989 when I was very young. A very young adult might be linked to a mining town in an attempt to escape 17% interest rates and to take a turn ... and wow, what a turn I've taken.
James Mitchell: That's interesting, so that decision was a financial decision, and it sort of coincides with the-
Joanne Dillon: Absolutely.
James Mitchell: The birth of mortgage management and mortgage broking, really.
Joanne Dillon: Yeah, I was never involved in banking back in 1989. I was in an admin secretarial role and my then-husband accepted a job with Western Mining in Olympic Dam. We saw it as an opportunity to get out of the debt hole we were creating for ourselves with interest rates climbing quickly, and I still say it was one of the best decisions I ever made.
Annie Kane: Great, now you've been broking for the last 20 years? You said that you left in 1989, but did you go straight into it?
Joanne Dillon: Yeah, broking for five. Before that, I was 22 years with a major bank, but yeah, I made the switch to broking back at the end of 2012. Retail banking was changing and was getting further away from the client and more into a direct sales role, and that's not who I am. I want to get back and to being right in front of the client and being part of that intimate relationship space, hence the big move to step away and join the broking world.
James Mitchell: When interest rates were up around 17% like you said, and you and your then-husband were in a sort of debt hole you described it as, and then you sort of made the financial and lifestyle decision to move to a regional area ... how has that part of your story or that experience informed the way you deal with your clients now?
Joanne Dillon: Absolutely, it sort of takes that, there's no hole too deep that we can't build a strategy to work out of. Sometimes it may take some big changes, but you never give up on a dream. Anything's possible. It's just come down to how you approach it and how much effort you're prepared to put in, really.
James Mitchell: Does budgeting and a bit of financial management come into some of the conversations you have with your clients? I'm really interested in that sort of-
Joanne Dillon: Absolutely. The budgeting strategy and ongoing servicing issues and lifestyle form a big part of everything I do, because obviously people in a mining town tend to move here ... all of a sudden their wage increases, their lifestyle changes and so much of it goes to waste.
I'm all about education and teaching people how to really manage their money and make the most of what they've got while they're earning these increased wages, and get it to benefit their future so that when they chose to leave a mining scenario and go back to real life in the city, that they've benefited from it.
James Mitchell: Yeah, good point.
Annie Kane: I'm guessing ... we keep hearing in the news about the impact of the mining downturn in the regional areas, but how has it affected Roxby Downs specifically, and have you seen an increase in mortgage stress in your area?
Joanne Dillon: Very much so. Just on three years ago, BHP pretty much made nearly a thousand jobs redundant, which was a massive blow to our town. It pretty much halved the size of our town over a six month period, so there were a lot of people under a lot of financial stress.
A lot of it came with just having no idea where to turn, what their options were, what to do. As a part of being a local broker, I needed to change the way I looked at my business, and it wasn't so much about selling loans or getting people new home loans or refinancing.
It was all about helping people restructure to make things more comfortable, how to use their excess payments to buy them time, to enter into payment arrangements with lenders so that they didn't lose their property.
It becomes more of a repair and encouragement role, rather than a selling role. In hindsight, what that's done for my business has helped it grow tenfold.
James Mitchell: Oh, really.
Joanne Dillon: It's bought them loyalty to my business, saying she's not just here to sell us stuff, she's actually here to help us through all these troubled times, as well. Very big impact in a small town when something like that happens.
James Mitchell: Is some of those impacts still being felt, or do you think the market's sort of bottomed out now?
Joanne Dillon: They are slowing down, the last 18 months have seen the mine BHP bulletin announced some positive growth for the mining sector as well as for our town.
We're now back into the growth phase of re-employment. We're pegging our way back to the numbers we were at three years ago, but it's been a slow growth, and getting people's loyalty and trust back to spend their money and not stop, in case it happens again ... to invest in property, to invest in our town ... it's a slow crawl back. It was a big, fast drop at the beginning, but we're slowly crawling back to that confidence level.
Annie Kane: I think that's so interesting about what you were saying about obviously having that really close relationship with your clients, not only just as you say, provide them with a home loan, but really help them keep that home loan working for them.
Did you have to go back and do some more training when that all happened? How much of that information did you already have to hand, and how much of it did you have to learn about restructuring the way that the loans were managed, or maybe about how their businesses were running?
Joanne Dillon: I have lots of experience that came with me from my 22 years with the major bank, so I was extremely grateful to have that behind me, because it left me with a few avenues that I knew where to go and what sort of things to ask the lenders and how to approach lenders with those types of situations having worked for a major bank for so many years. That definitely helped.
I also have a small budget strategy business that I run alongside my broking, as well. The two tended to join together and work very nicely, but when you say learning ... every day we're learning. We're learning new things and new strategies every day. There's no one I've ever met that says I know it all.
Annie Kane: Yeah, of course. Can you just give us an example, though, you were saying sort of about knowing the ways to approach lenders. Can you give us an example of what that would've entailed and what they were sort of looking for?
Joanne Dillon: Yeah, when people were facing financial difficulties coming forward when they knew that they were going to be made redundant but they had six weeks to go, it was about entering into those conversations with lenders going, we have a situation that is about to occur, and preempting things like that.
Working out a repayment holiday or working out that we are in advance how much so we can make part payments for the next six months ... working with those forward strategies instead of waiting for a default letter from the lender.
It's all about pre-positioning the lenders so that the client relationship is preserved, and they don't get poor credit as a result.
Annie Kane: Yeah ... and preempting it.
James Mitchell: Joanne, I'm interested to know a little bit more about your business in terms of ... it seems so closely tied to the mining sector in Roxby Downs in terms of what BHP's doing and the impact that's having on your local clientele.
Have you diversified geographically or do you have clients in other areas, or have you moved into new revenue streams to, I guess, offset the risk of being so tied to mining?
Joanne Dillon: Initially, I'm tied to mining, but as you mentioned, James, obviously, I have lots of different clients who, due to being in the mining sector, have now moved on. I built these client relationships back when I first started my business five years ago when the town was buoyant. These people have since moved on and moved to different states or towns, or whatever.
The diversification has happened naturally. By these people moving away, maintaining a client relationship with me and continuing to refer business to me, to friends, family, close associates ... my business base is growing outside of my direct area as a result of direct client referrals.
James Mitchell: Yeah, nice.
Annie Kane: I think that, again, just really goes to show how, if you place yourself as that really trusted advisor, you can not only improve the reputation of the broking industry, but really consolidate yourself and others in the industry as being that really, much needed-
Joanne Dillon: Absolutely.
Annie Kane: Much needed professional.
Joanne Dillon: Yeah, I've always introduced to my clients, when you come on board with a broker, you're actually building a lifelong relationship that will take you through all of your ebbs and flows of finances with one point of reference. You're not having to continually tell your story over and over again. All we're doing is updating your story each time we catch up.
Annie Kane: I just want to ask a few more questions about the budgeting business that you said that you had as well. How did that work? Did you set that up because of the down turn, or was that already there? What was the decision for bringing that business in to the fold.
Joanne Dillon: This was a little brainchild of mine back when I was working with the major bank. So many times I saw people come to the back saying, I'd like to buy a house, we've crunched the numbers, we'd give them the deposit figure that's required, and you just saw their face drop. You almost watched them give up hope going, "well, I'll never achieve that" ... and it was sort of like, that's the bit that's missing.
Everyone can give you a home loan, everyone can give you a savings account, but no one actually teaches you how to manage your money and actually save. I wanted to bridge that gap to say hey, if you come to me and you are at the stage where you're ready to buy your first house or ready to make that first investment, instead of sending you away going, come back to me when you've saved x amount of dollars, how about we work together on a strategy that's gonna get you from where you are now to where you wanna be in a reasonable time frame.
James Mitchell: Yeah. I think that's a great initiative.
Joanne Dillon: That's where the business was born. Now, every time I get a client referral, if they're not at the place they need to be, I have the tools to help them get there, which also gets the client relationship started even prior to the broking actually commencing.
Annie Kane: That's a really smart and also very useful way of doing business. Do you do anything in the community in terms of trying to improve financial literacy, as well?
Joanne Dillon: I do regular talks. Every year I go and present to the year 12 students at the high school. We only have one area school here, which goes from reception to year 12. These young adults are about to step out into the big, bad world of finance being thrown at them every which way but possible.
I do a talk with them each and every year about the perils of credit cards if they're not used correctly, interest-free finance, what are the hidden messages, what it means to run a household, what are the true costs that your parents are incurring, and give them a little bit of a reality check, which is quite eye-opening for most of them.
Annie Kane: Make them feel really guilty about how they've been freeloading of their parents.
Joanne Dillon: Absolutely. It's a bit of an eye-opening moment. I also speak regularly with the year ten and 11 half students, which is like the old school economics that we used to do when we were at school.
We just talk to them about money in general ... like how it works and how does loan interest work and how do you calculate this, how does an offset work. All those terminologies that they've heard, but they don't understand the ins and outs behind it. I do a lot of that. I work closely with the school.
I also support lots of local fundraising charities by donating my budgeting services for free.
Annie Kane: Oh, wow, okay. Is that normally something that you charge a fee for?
Joanne Dillon: That is something I do charge a fee for, because it's very time consuming and labour intensive. That's something that I offer as a freebie when there's charity organisations that need to ask for raffle prizes. Rather than giving merchandise, I feel my free services are very well received.
Annie Kane: Yeah, give your time.
James Mitchell: How many clients would you say you have in the budgeting business working with you to achieve their goals?
Joanne Dillon: I would probably say roughly 10-15% of my clients are involved in the budgeting side, as well.
James Mitchell: Okay.
Joanne Dillon: Those that come to me as clients first and then require a little bit of help with budgeting afterwards quite often we just make that all part of the parcel. Those that are paying for upfront budget services initially without becoming broker clients ... yeah about that 10-15%.
Annie Kane: Okay.
James Mitchell: I think that's fantastic. In light of all the regulatory scrutiny that the industry's under at the moment, hearing your story about how even before people are ready to take out a loan, yet you're walking them through and teaching them about how to manage their money, I think that's a great thing and I think it's a huge opportunity for brokers out there that aren't doing that. It's a great way to feed qualified leads and to help people before they take on debt.
Joanne Dillon: Absolutely.
Annie Kane: Yeah, and before they get into any sort of hardship, as you're saying there about the downturn and how that affected people. I just wonder now, looking at the market in Roxby Downs currently, compared to what it was, let's say, three or four years ago.
What is the difference mainly now? Is it that people are looking to invest? Are they looking to buy their first homes? What are they mainly doing?
Joanne Dillon: Three or four years ago, the median house price was around 400,000. Now, we're looking at it being around 250, so there's been a huge drop and we're making our way back. It's a very different market. Four years ago, it was very heavily an investor market. With rents being extremely high, it attracted a lot of investors wanting to jump in and jump on the mining boom as it were.
Now that the crash has been and we're in recovery mode, probably, I'd say a good 80-85% of the houses being sold in town are being sold to Roxby buyers. A lot of these are second generation Roxby. These are kids that are born when I first moved here. These kids are now adults, they're starting their own families and they're wanting to call Roxby home. It's a big shift too, on Roxby buyers to actually make this home for the next five to ten years, and raise their families here.
James Mitchell: Yeah. Do you work with many self employed clients? I was just thinking if it's not BHP that's employing people and there's no other main industry in town, that people are setting up their own businesses, perhaps.
Joanne Dillon: There are quite a few self-employees. Many are employed through contractors to BHP, so there are the sub-contractors out there or they're running their own independent businesses like myself. There are a few, but most of them are under contract to either one of the majors or to BHP direct.
Annie Kane: I just wanna ask another question again about the difference between regional broking and broking in the cities. A lot of people would obviously say if you're a regional broker, it's a lot easier because you've got fewer clients to deal with and you can spend more time dealing with them.
What would you say when people make those sort of judgements about what the differences are?
Joanne Dillon: That's a big call. Yes, they are all closer. In my case, everybody's less than five minutes away, which is great. I don't have traffic lights in my town. I don't get caught in traffic. I have two roundabouts, does that count?
Annie Kane: Sure, yeah.
James Mitchell: Why not.
Joanne Dillon: I don't have those sort of stressors, but what we do have is, we're constantly seen in a professional light. When a metro broker goes to do their shopping, they can do so anonymously.
I will run into five or six clients while I'm doing my shop. My clients are also my children's teachers. These people are on my sport teams. They're my doctors.
You're constantly being viewed as a professional business, even in your personal life. There's not a lot of cutoff time from what you do for a living to who you are as a person.
James Mitchell: That's interesting, so you've got to be on point to a degree, I guess, or on brand every day.
Joanne Dillon: Absolutely. You're constantly on call. People won't hesitate to stop you in the street and go, hey, I've been meaning to catch up with you.
Annie Kane: Yeah, that can be a blessing and a curse I imagine.
Joanne Dillon: Yeah, it goes round and round. While yes, we have less clients to deal with, we're constantly in contact with these people and constantly being, I guess, viewed as the broker on duty, even when we're trying to relax.
Annie Kane: You can't get caught gambling or anything like that cause they'll hold it against you.
Joanne Dillon: We are human too, and we like to go and have a pint on the water or we like to pop some money in the poker machine, or whatever. The stares you get for doing so, like, oh, can't believe you're in here, you're the budget lady. I am, but I'm actually on my day off and I'm having some fun with friends.
Annie Kane: Yeah, you're like, because I budget, I can afford to do this.
James Mitchell: I'm blowing my budget, leave me alone.
Annie Kane: Well, it sounds like you're doing a great job, Joanne. We really appreciate you coming on and sharing a little bit of your story with us and with our listeners. Congratulations once again for winning the Better Business Award for Best Regional Broker and we look forward to hearing more from you in the future. I think that's pretty much all the time we have for today. Best of luck with everything, and keep in touch.
Joanne Dillon: Thank you.
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