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Registrations are rolling in for the 2010 Annual Conference to be held at Royal Pines on the Gold Coast 24th to 26th February.  We have had great support from the following suppliers who have all agreed to sponsor next year’s conference – Adelaide Bank, ALI, AMP, ANZ, BankWest, CBA, Homeloans, ING Direct, La Trobe Financial, NAB and Westpac.  A huge thank you to those businesses for your support of nMB.

With fantastic speakers, including Chris Caton (Westpac Chief Economist), Lawrie Lawrence and Barry Urquhart, and plenty of social activities, it’s sure to be a great few days.  For those nMB brokers not yet registered, make sure you do so as soon as possible, and lock in some cheaper flights before it’s too late.

Competition (or lack of it!) amongst lenders is still a hot topic.  It was pleasing that ING Direct launched a new product earlier this month and there are some signs of a return to better funding by the second tier banks with Bendigo and Adelaide Bank looking at becoming the first regional bank to issue residential mortgage backed securities (“RMBS”) without government support through the AOFM since it was first announced back in September last year.  There will be many small steps, and maybe a few false starts, as we begin to see some return to the previous robust funding available to lenders. 

The continued strong performance of existing Australian RMBS on issue, despite all the negative global events going on around us, will hopefully result in funds being directed towards local issues.  The Australian superannuation funds industry should take a lead role in this area.

With Christmas and the end of another year just around the corner, it’s a good time to start to think about opportunities which can be targeted early in the new year.  Roy Morgan Research has just released its latest small business owners (“SBO’s”) survey which shows that SBO’s are less satisfied with their banks than any other customers, particularly the “Big 4”.  In the Roy Morgan Research report, Norman Morris, Industry Communications Director, said in relation to SBO’s: “These business owners have nearly twice the average value of banking footings than overall  customers, have more products (including loans) and are less loyal, so they are certainly a segment that needs more attention………..”.

There must be many opportunities for brokers to target this SBO segment with a view to re-structuring (and splitting) existing loan facilities, arranging new loans and providing a broader range of services. 

The Reserve Bank increased the Cash Rate to 3.5% in November, up by 25 basis points for the second month in a row.  The Minutes of the November Meeting clearly set out that further rises are imminent, with another 25 basis points rise in December highly likely given the Board will not meet again until February.

A number of nMB brokers polled well in the recent “MPA Top 100 Brokers” with Jeremy Fisher ranking 3rd, Gerard Tiffen 9th and David Friend 45th.  Congratulations on achieving these great results in such a competitive market.

Until next time, stay well!

Gerald Foley - Managing Director

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With the new year only weeks away, now may be a good time to take stock of past performance and map-out a plan for 2010.  To assist with the planning process, I recently launched a new business review template to assist brokers in the following areas:

• Understanding historical performance;

• Uncovering underlying trends;

• Highlighting cyclical & seasonal behaviour;

• Benchmarking against the nMB network.

The objective of this process is to provide brokers with a clear understanding of their current state of play before discussing future business goals.

Historical Performance
The first part of the business review template presents historical sales performance as a year-on-year stack.  This ensures brokers may easily analyse monthly, quarterly & annual sales, average distribution of sales in dollar and percentage terms, PB (personal best) results, and loan book statistics.

Underlying Trends
By analysing historical data over time (time series) brokers are better positioned to understand the pattern of past performance and hence better able to plan future sales.  Specifically, time series analysis will help uncover any trend, cyclical, seasonal and irregular activity.

Note: Chart 1 includes sample-broker data only

By applying a linear trend line to the sample broker’s sales results (see blue line in chart 1), we have uncovered a long term, upward trend in sales activity from January 2000 to September 2009.   Although the long term trend is upward, it is important to note the number of months that fall below the trend line, especially in the last two years.  If we redraw the linear trend line from September 2007 to September 2009 (see orange line in chart 1), we can conclude that sales are in a downward trend over the medium term.  This opens a conversation with the broker around the causes and potential strategies to reverse the trend.

Business Cycles
Business cycles can be identified by the alternating sequence of points above and below the trend line – see chart 2.  As an example, this broker’s sales chart clearly highlights a regular and volatile pattern of points above and below the long term trend line.

Note: Chart 2 includes sample-broker data only

This pattern is typical of a one person broker business and reflects a “prospecting, selling and processing” business cycle.  A key growth strategy for this business is to employ staff to manage the loan processing function, providing the broker additional time to focus on the most important stages of the business cycle…..prospecting and selling.

Seasonal Behaviour
While trend and cyclical activity may be measured by analysing multiyear movements in historical data, seasonal behaviour is identified by a regular pattern occurring within a one year period.  By stacking several years of sales results and smoothing the data, a pattern will start to emerge, reflecting the seasonal influence in the broker’s market.

Note: Chart 3 includes sample-broker data only

Over an eight year period, chart 3 displays a regular pattern of strong sales in May, June, August and November; & weaker sales in February, July and October.  It’s important to understand the factors influencing the patterns and then deciding to either work with it or plan against it.  As an example, this broker could choose to take annual leave leading-up to the lower months or choose to ramp-up their prospecting activities in an effort to combat the seasonal component.  

Benchmarking
“How does my performance stack-up against other nMB brokers?”  This is a question frequently asked and the reason I have included benchmarking as a component of the new business review template. 

Essentially, benchmarking provides a snapshot of performance metrics such as productivity and business trends and helps brokers to understand where they fit in relation to a particular standard.  The standard used in the new review template is the nMB 1st quartile average.

Note: Chart 4 includes sample-broker data only

Chart 4 displays historical sales for our sample broker (blue line) and the nMB 1st quartile average (orange line).  The sample broker in this example is performing below the 1st quartile average but seems to be following a similar pattern of growth.  Both display an upward long term trend and both have contracted in the last two years.  This reflects the macro economic environment, while the sales gap reflects individual performance. 

Note: Chart 5 includes sample-broker data only

Chart 5 provides a seasonal benchmark as a means for brokers to compare their individual market against the sample of nMB’s total network.  It is important to note that this chart simply provides an awareness of the differences between markets, not any performance gaps.  The information can then be used to open a discussion around seasonal effects and the activities that may be employed in an effort to balance the level of distribution.

What is measured, improves…..
The first stage of preparing a new business plan or set of objectives is to review current performance.  The nMB business review process helps brokers to convert sales data into meaningful information.  The information creates a knowledge base that may be acted upon, providing brokers with the power to effect change of action and change of performance.

Should you wish to conduct a detailed review of your business, please don't hesitate to contact your nMB BDM.

Sal Cinque - Director, Sales and Marketing

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In conjunction with the November issue of Intell, we are releasing ‘nMB Top5 Products’ - a new fact sheet for Mortgage Broker Suite.  Periodically nMB will showcase the top five loans, one each in their respective categories.  The products are selected based on a combination of their pricing and unique features.  We have condensed the categories into five popular choices: 

Basic
Traditionally a no frills loan with a discounted interest rate. In return for a lower interest rate, basic loans generally have fewer features and can be less flexible.  These loans are suited to first home buyers and those wanting a low rate home loan without all the features and services of a regular product.

Introductory
A loan offered at a reduced rate for an initial period of time (usually 12 months).  The reduced rate can be either fixed or variable. After the initial term the interest rate usually reverts to the standard variable rate.  Popular with borrowers looking for increased cash flow, to assist with moving into their home or those looking to get a jump start on their loan by opting to make repayments based on the higher standard rate from the outset.

Package
A package of products, including at least one fully featured home loan, transaction  account, credit/debit card and discounts on other services.  A discount interest rate  anywhere between 0.25% & 0.70%  off the standard variable rate dependant on the loan amount.  Annual package fees normally apply. Suited to those borrowing larger amounts or a combination of loans and who like the convenience of having all their banking products with the same lender.

Fixed
Loans which give the borrower the ability to fix the interest rate for a period of 1 to 10 years.  These loans are generally less flexible than variable rate loans however offer a level of certainty for those averse to rising interest rates or who are on fixed cash flows.

Line of Credit
A revolving line of credit allows borrowers to access the equity they have built up in their property or raise funds for other worthwhile purposes.  Offers flexibility in the timing and size of repayments

Sarah Zecevic - Lending Services Manager

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With the release last month of Microsoft’s new Windows 7 platform, one could be forgiven for thinking, here we go again, another Vista moment.  Fortunately, it appears Microsoft has got it right with the latest offering.  Windows 7 is more than just spin, it is a full replacement operating system, and from all accounts it's a winner.  Users will first notice the updated Vista aero theme and the new easy to use task bar which now rivals Mac’s OS dock which many believe is the benchmark.  Including better stability, driver support & battery management, as a package, it’s the most easy-to-use operating system Microsoft has ever had.

A small number of nMB Brokers have already made the transition, and yes, aside from having to reset the dreaded "User Account Control" setting,  nMB MBS runs smoothly on the new OS.

The latest release of MBS, has hit the spot with Brokers.  Automated notification for maturing fixed rate loans has been well received together with the new performance reports and increased marketing functionality.  We are constantly looking for ways to improve the system and appreciate your feedback.

nMB MBS tip of the month:
Keeping MBS up to date ensures you have the latest lender information at your fingertips, and ensures your CRM database in sync with the nMB server.  Make sure you select “get updates” on MBS, at least twice a day for the latest information and “synchronize” regularly throughout the day so your CRM is in tip top shape.

Kon Avramidis - Director, Operations

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John Karipidis , nMB Broker - Money Saver Finance Pty Ltd

1. My all time favourite food is:

Lobster Mornay

2. The last book I read was:

Dan Brown's The Da Vinci Code

3. Lately I’ve been listening to a lot of:

Harry Connick JR's album Your Songs

4. My favourite saying is:

Better to seek permission than to seek forgiveness

5. My Ideal Sunday involves:

Driving up to Yarra Glen-Chateau Yerring for lunch and wine tasting

6. My biggest inspiration is:

My wife Christine of 23 years

7. If I didn’t live in Australia I would live in:

On a Greek Island Santorini or Rhodes

8. The most extravagant gift I have bought myself was:

Tag Heuer Carrera watch to celebrate my 25 year working history. In the great words of Sal5, “If you want a good time, you need a good watch.”

9. If I could have dinner with anyone (dead or alive) I would choose:

Robin Williams

10. Three things I would love to do in my lifetime are:

1. Purchase a prestige sports car
2. Travel around the world one day with my wife and two teenage children
3. And, most importantly watch my beloved Collingwood Magpies play in a winning Grand Final!
                                                                                            

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nMB December Sales Meetings

Please make note of the relevant nMB December Sales Meeting date in your diary:

Brisbane              Tuesday 8th December
Sydney                Wednesday 9th December
ACT                       Tuesday 15th December
Melbourne          Thursday 10th December

The nMB 2009 Christmas parties will take place following the December Sales Meetings. We look forward to celebrating the festive season with those who are able to attend!

2010 nMB Annual Conference

Thank you to everyone who has already registered to attend the 2010 nMB Annual Conference. We are pleased with the positive response we have received!

Please click here for full details of the nMB conference.

Click here to register for the 2010 nMB Annual Conference.

Please ensure that you register by November 30.