The economy is rebounding, the property market is booming, and Mortgage Choice is riding a wave of success. Australian Broker caught up with the aggregator’s key leaders and top-performing franchisees to discuss its support for brokers, new products on offer, the impact of new technology, and lender turnaround times.
Q: How does Mortgage Choice support you as a franchise owner, especially your lead generation program and marketing resources?
George Boustani: I am getting a lot of support with social media content. It makes it really easy, just a click of a button. There’s a platform called Metigy that they have supplied to us for free, which is amazing. That just enables us to plan our marketing and social media for the whole month ahead. There’s definitely been a tick up in head office leads, and they’re a lot easier to convert. The branding has increased substantially over the last 12 months.
Leanne Johnstone: I have been a Mortgage Choice franchisee for almost 20 years, and the brand has continued to grow from strength to strength. The brand helps enormously and enhances credibility. In terms of head office leads, being part of a strong brand like Mortgage Choice certainly benefits. Obviously, the best leads are referrals from existing clients, and we’re really fortunate to get lots of those. Also, the size of the network – that means for newbies coming in there is this great brand that other people are recommending, providing you with the opportunity to get more quality leads.
James Algar: As a bigger business, I like the fact I can drop in and out of what Mortgage Choice supplies to us. I know there are certain things I can turn on if I want them, the leads etc., but I’ve also got the freedom to push that stuff back so I am not ramping it up at a time when I’m insanely busy already. The new website, the traffic through our website, is all much better now.
Q:The MFAA just released the latest figures on brokers’ December quarter market share, which is at 59.4%. So it’s a great time to be a broker?
David Zammit: Established brokers like the group here are absolutely flooded with [business], but a lot of new brokers coming in are not finding that. Being able to set people up for that lead generation and get their business working from the start is absolutely key to success, because we know that somewhere between 40 to 50% of those brokers will drop out in the first two years because of the lack of leads. In January/February we’ve had the largest two months in the last couple of years of acquisition of both franchise owners and loan writers. We’re likely to get to, by the middle of the year, a double-digit percentage increase in loan writers across the network.
Q: How important is technology to your role? What have been the main changes in the last 12 months, and where is tech heading?
Jane Vaughan: Technology is absolutely vital. Since COVID we definitely can’t live without it, because there’s a lot fewer face-to-face meetings, and we’re doing a lot of video conference meetings. I like it, clients like it. The technology’s amazing. I can be sitting on a boat in Thailand – if we can ever travel again – or working remotely, wherever you are on holidays. It’s an amazing job because you can pick up your computer and take it with you.
James Algar: A lot of the new technology Mortgage Choice has bitten the bullet investing in over the last two or three years. Had that not happened, the challenge of COVID would have been damn near impossible. It’s transformed our ability to cope with those changes and with working remotely. With the level of complexity in putting an application together now from every lender, the previous systems we’ve worked on before would never have coped with DTI, servicing requirements and living expenses. The platform we have is really good – it works; it’s reliable.
Leanne Johnstone: Broker Platform is an invaluable program. When I’m running loan scenarios with clients and sharing the program, I often get the response ‘Wow!’ In one place you have personal details, financial details and the ability to calculate borrowing capacity, repayments and show loan comparisons. It’s great the way it populates ApplyOnline and it’s easy to send clients information in a clear and logical format.
George Boustani: This new File Manager, which is linked to Broker Platform, that’s saved me from having to hire an extra admin person. Just with the task management, follow-up and the streamlined process – that’s enabled my office to become a lot more efficient in following up files, dealing with customers, emailing clients. It’s quite automated, easy to use; it’s very user-friendly. You can’t get it wrong, and anyone can do it. That enables us to spend more time on marketing and improving the customer experience.
Jane Vaughan: Through our online lending centre we have a wealth of information available to us. When I speak to friends who are with other aggregators, they just do not have access to the level of information that we get. We can search the toolkit for so much information, ie supporting documents required, lender policy, LVRs. They’ve thought of absolutely everything. It’s a go-to, and it saves us a lot of time without having to go back to the BDMs. That’s of huge value to me.
Q: Has there been much feedback from clients about the new technology and ways to communicate?
Susan Mitchell: We hear from customer satisfaction surveys, and they’ve come back and said they love the customer experience. They also love their broker. We have also gotten great feedback from people that look to buy a franchise, who say, “Wow, this is completely above other ones I’ve just gone and looked at”.
David Zammit: If you look over the last 10 or 15 years at relationship businesses such as mortgage broking, the client loved their broker, but the process they had to go through with the bank would have been painful. We’re seeing processes and technology catch up with the relationship. I went through the process the other day as a Mortgage Choice client, and I didn’t need to touch a piece of paper; I didn’t need to go anywhere. It was really, really easy, painless and simple.
Q: The residential property marketing is booming. How are you taking advantage of this, and what do you see happening in the next 12 months?
Jane Vaughan: I believe it’s just going to keep going up. At the moment it’s the houses that are in absolute boom, but once everybody can’t afford a house, it’s going to filter through to the unit market. As soon as everybody can fly in from overseas, there’s a lot of people who are going to say, “I have residency in Australia, and that’s where I want to be when they have the next lockdown”. My thoughts are, get in now, it’s just going to keep going up.
Leanne Johnstone: With the booming market, we are swamped with new leads, referrals and existing clients pursuing new opportunities. We are doing a record number of applications and pre-approvals. Many people are finding that properties are going for 10–20% more than what they expected. There is still a real lack of supply; however, I’m hoping more properties will come on the market soon as confidence continues. Refinancing has also been on the increase, with incredible rates and substantial refinance rebates being offered. Lots of renovation loans too.
Susan Mitchell: We had a real bubble of refi go through. It’s in our results package – you can really see it peaking in May and June and the approvals then flowing through in August and September. Our refi was up to 60% of our volumes, and the historic numbers are much closer to 35 and 45%. It’s now come back to more historic levels.
Q: Lender turnaround times blew out during COVID-19. Are they improving, and how is Mortgage Choice tackling the problem?
Susan Mitchell: We’re working with the MFAA and the other aggregators and talking as a group to the different banks. We’re also talking individually to the banks, but we’ve also introduced a new white label called Propel that has a very, very short turnaround time. We’re hoping that will give another lender opportunity to our customers that they can turn around a bit faster.
George Boustani: It’s important to manage the customer’s expectation. I’m trying to take advantage of our broker priority status, which is Flame with St. George, Platinum with Westpac and Teal Tribe with CUA, because the turnaround times there are a lot different. When a customer’s on a cooling-off period, it is in their best interest if they want that property to get that loan in a timely manner. A lot of these lenders are offering good rates and quick turnaround times.
Leanne Johnstone: There’s gradual improvement in turnaround times at present; however, it is still key to manage clients’ expectations. Lenders are pedantic. They are still approving loans; however, they are understandably thorough and often require additional information. The turnaround times with lenders have blown out with increased volumes and lending requirements. Most brokers and lenders are working long hours and weekends – I had calls from two assessors on Australia Day.
Susan Mitchell: Mortgage Choice also monitors the service levels. It’s in our system. We actually track it live, and it shows up when you are looking at the different lenders. It will show you in the system where they are with their turnaround times so you’re aware at the time when you’re picking a lender where they're at.
James Algar: Our lender spread is much greater now. A lot of this involves sitting with a client and going, “Hey, you see all these traffic lights here – any one of these mainstream banks would give you the loan as long as you’ve got six weeks to wait for them to get around to it”. We’ve got good options with other smaller lenders where I think people’s sense of urgency is driving that business to other brands, and I think that’s good. The big banks need to understand that as brokers we do control a bigger share of the market now.
David Zammit: Credit policy and turnaround time is a far greater driver of the decision-making process than what it has been. Having the infrastructure to be able to go across 30 different lenders and ask, what’s the credit policy look like, what’s my turnaround time look like – having that infrastructure in place is really, really key. It’s very difficult to be able to navigate that matrix otherwise.
Jane Vaughan: I used to use the banks a lot, and I’m using more non-bank lenders these days due to turnaround times. Also, the banks typically do not offer competitive retention pricing for existing clients when the time comes to look at a home loan health check, say three years after a fixed rate loan, whereas the non-bank lenders are more aggressive about retaining their clients.
Q: How does the new white label product Propel ensure fast turnaround times? Do you expect more products like this to enter the market, or will future products look entirely different?
Susan Mitchell: It’s very clever technology, and they’ve got everything built in. Bankstatements.com.au takes all the information in; it does a quick decision – it’s actually risk-based pricing – and then it comes back to the broker to let them know what the rates are going to be for the customer.
George Boustani: I think artificial intelligence is the way forward. We have to embrace it. It works well because the technology enables us to look at living expenses, do automated valuations and offer quick turnaround times. It needs to move forward in dealing with more complex situations. At this stage it’s more for vanilla applications.
James Algar: The technology exists in other markets around the world. Turnaround time and confidence in a decision is a big driver of people’s choice. Having an option like that for someone going to auction tomorrow is good – even six months or a year ago, getting an approval for a bank in that time was impossible. In this day and age we want answers now. Propel’s probably the first cab off the rank in terms of an actual live model, but every one of the fintechs behind the scenes is chasing the same nirvana.
Susan Mitchell: They [lenders] will get the more complicated ones. It will become less and less vanilla. There will always be space where you’re going to say, “I’m sorry this is just way too hard to program; it’s not worth our effort to program it”. But they will slowly add in all those little pieces, and they will get there absolutely.
Q: How important are BDMs to your business success, and how does Mortgage Choice assist in this area?
Jane Vaughan: We can’t live without them. They’re our support network. It’s all about relationships – these are the people to turn to when we need assistance; they are our go-to. I think that’s what sets us apart from going directly to a bank. If you go into a bank branch, if the wheels fall off during the application process, I can guarantee that that branch isn’t going to close its doors and pick up Joe Blow’s application and have four people in the office running around to get your loan back on track. But if you’ve got a broker, they will.
James Algar: There’s a direct correlation between the quality of a BDM and the level of business we send to that lender. Especially amongst the majors, they all source their funding from the same place; they just dress it up differently. Nine times out of 10 we’ll send it to a lender that’s going to have a good relationship where we can influence an outcome. It’s about looking after the client.
Susan Mitchell: At Mortgage Choice, we have franchise business managers [FBMs] that will help our franchisees.
Leanne Johnstone: With the Mortgage Choice model, we are fortunate to be able to draw on the expertise and resources of our FBMs. They are a key support who can assist our individual businesses, regardless of what stage it is at. You can reach out for as much or as little support as you need. It is awesome having this person at head office that knows a bit about your individual business and goals. It is absolutely invaluable.
David Zammit: We’ve actually just recently resourced the team further than what it was before. We’re now sitting at around about 50 franchises for every FBM. We’ve taken the view that to get it down to one to 50, we can make sure we can tailor to every single individual franchise so they’re getting what they need.
Susan Mitchell: I think a lot of the FBMs or managers are really more about recruiting in some of the larger aggregators. The FBMs in our business are asking, how can I help you grow your business, because I understand your business, what you want and what your goals are? How can I help you achieve your goals?
George Boustani: There have been times where a deal’s fallen off the rails. That’s where the FBM has come in. They’ve gone beyond the bank BDM to the state manager of that bank and got the deal back on the rails, approved and settled. In my early days, the Mortgage Choice FBMs helped me quite a bit with scripting and networking, scripting for how to talk to a real estate agent to get referrals. They take care of staffing and recruitment and shopfront issues. Their role is quite important.
Q: Within Mortgage Choice, what opportunities are there to diversify and grow a broker’s business? How does it support these opportunities?
George Boustani: As a result of BID, our car loan referral system has changed to Platform Plus, which has made submitting a car loan substantially easier. It’s a better experience for the client and for us. It was quite fidgety to cross-sell car loans and personal loans, but the new Platform Plus system is BID-compliant, easy to use and quick. The infrastructure that’s been put into place by Mortgage Choice Asset Finance has helped us quite a bit. It’s fantastic.
Susan Mitchell: So the point is they can get involved or as stand-off as they want and still get that diversified product through. Some people will actually do the whole loan themselves. The main thing was to just make it easy – to have a high-quality product that was easy for the broker to do. The more diversified income that has gone through their businesses, the stronger and more valuable their individual businesses are.