Competition Index – June 2017

Non-majors step up

Data out today would suggest Australians are testing the competitiveness of the lending market with AFG data showing the non-major lenders picking up nearly 35% of the market, according to the latest AFG Competition Index.

AFG General Manager of Sales and Operations, Mark Hewitt said the data reaffirms the value the mortgage broking channel delivers. “Mortgage brokers deliver true competition in the lending sector and provide real choice for consumers. If a lender is out of the market on service or price they will look beyond the majors to meet the needs of their client.

“Today’s figures show CBA continues to slide with their overall market share down from 20.5% this time last year to 11.8% last month.

“With CBA, AFG believes this is the result of a deliberate strategy to pull back from the investor and interest only markets to meet the lending caps mandated by APRA,” said Mr Hewitt.

“When combined with their subsidiary Bankwest, CBA has dropped their total market share from 25.5% to 15.5% in the same period.

Amongst the other majors, NAB is continuing to win market share.

“NAB have benefited from their recent actions to align their broker products with their direct channels,” he said. “Until recently there was a difference between the products made available to their direct and broker-introduced customers which created confusion for borrowers.”

“Westpac has taken the lion’s share of the fixed rate market for the majors, doubling their share from 10.98% this time last year to finish May 2017 with 22% of fixed rate mortgages.

“Westpac subsidiary St George is also picking up market share of those seeking to refinance.

AFG has 39 home loan lenders on its panel and flows of business to the non-majors are significantly higher through brokers than in the broader lending market. Last month 34.95% of all mortgages lodged by AFG brokers went to the non-majors. This is in stark comparison to the 17% market share of the non-majors outside of our channel.

“Suncorp is the big winner for the non-majors, picking up market share in the fixed rate, investor and refinancing categories.

“Increased competition delivers value to the consumer. Many of the non-major lenders on our panel do not have a branch network. Without the competitive tension mortgage brokers bring to the market, prices would inevitably rise,” he concluded.

Download full report: AFG – Competition Index – June 2017

AFG Appoints Chief Executive Officer

The Board of Australian Finance Group (ASX:AFG) is pleased to announce that Mr David Bailey, AFG’s current Interim CEO, has today been appointed as the Company’s Chief Executive Officer.

In announcing the appointment, AFG Chairman Tony Gill commented that following a review of the market it was clear that David, who has been acting in the CEO role on an interim basis, is the preferred candidate. “David’s skills and background are ideally suited to the role of AFG CEO.

“David has been with AFG for over 13 years and holds a wealth of experience from his roles as Chief Financial Officer, Chief Operating Officer, as well as Interim CEO of AFG,” said Mr Gill.

“Importantly, having worked closely with our former CEO Brett McKeon both prior to Brett stepping back and also since David’s appointment as Interim CEO, he is well known to AFG’s brokers, business partners and shareholders.

“David in his time with AFG, has had direct responsibility for its business development, strategy and finance operations as well as leading our AFG Home Loans business, including our securitisation programme.

“David has been very effective in the Interim CEO role and the Board looks forward to the ongoing growth of the company as David and the AFG executive team work together to maximise the opportunities for the business.

“I am delighted to have been affirmed in the role,” Mr Bailey said.

AFG is a great Australian success story. We have a fantastic culture, breadth of market reach, deep capability and a focused strategy that has driven our success.

“We are in an exciting and important phase of AFG’s development and I look forward to steering AFG further down the path of diversified growth whilst also ensuring the core broker proposition of choice, competition and strong consumer outcomes is maintained.”

Download Media Release: AFG Appoints Chief Executive Officer

Co-working spaces – a great option for owner-operators

Not only are there government initiatives at a federal, state and local level for those running small businesses, but there is also a growing industry of businesses whose sole purpose is to help other businesses. There are hundreds of business coaches, entrepreneur networks and a growing industry of virtual assistants for those not ready to invest in their own staff.

Small business owners around the country are also supported by a growing network of co-working spaces. Each capital city has these spaces which often provide the following for those using them:

  • WIFI
  • Printing facilities
  • Ergonomic desk and chair
  • Power for devices
  • Parking
  • Meeting facilities

In a new twist to the co-working industry, entrepreneurs have set up spaces with crèches or childcare included in the pricing. For parents of children not yet in schooling, these can be a lifesaver, allowing you to get work done while your child is entertained close by in an approved and safe location.

We’ve put together a list of links below to the top co-working spaces in our major cities. You can Google ‘co-working and créche’ to find more information on co-working spaces for parents of young children.

AFG is not affiliated with any linked websites and takes no responsibility for the content found therein.

How to market your business on a shoestring

Whether you’re embarking on your first marketing adventure as a new business, or planning your next annual marketing strategy and spend, there are quite a few options available that are low on cost but can net a high response rate. Here we explore a few and look at how you can begin setting them up.

Email database

Don’t underestimate the power of email. Some days we all feel like we drown in too many emails, but they still have far higher open rates and click through rates than social media. If your emails are well thought out and engaging then you will be able to effectively reach people via this method. Explain the benefits of joining your email list to encourage people to subscribe and don’t be afraid to send out updates, at least monthly, to share informative, engaging and educational content.

Social media

It’s here to stay. Facebook added another 1 million users between December 2016 and January 2017 taking them to a total of 16 million Australian users. Instagram now has 5 million monthly active Australian users. If you are working on a B2B strategy then you have access to 3.6 million professionals in Australia via LinkedIn. Have a look at who your target market are, and where they are currently looking online. It’s much easier to put yourself in front of your target audience than try to make them come to you.

Referrers and influencers

Marketing is built around people and human nature. As humans, we naturally turn to other people for recommendations. 92% of consumers trust recommendations from people they know directly, and anonymous reviewers have a 70% trust rate when they post online about a brand. Think about who you know, who you’ve worked with before, who loved what you do, and use those connections as much as you can. Ask them to give testimonials, reviews and share their experience.

Networking

We all belong to community groups, whether it be through schooling (our own, or our children’s), sport, neighbours, colleagues, or even family. Add to this all the online opportunities to join networks and groups. Think about what materials you can produce to encourage those people to share your business with others. You aren’t necessarily asking your family and friends to spend money with you, but to share your business with others they know. It might sound simple, but if enough people remember what you do, the potential number of word of mouth recommendations you could receive is quite high.

Ask around!

Don’t feel like you are alone in not being sure where to promote your business and what you should be spending. There are so many options when it comes to marketing and spreading yourself too thin by trying to be everywhere will prohibit you from focussing on where you can attract the most attention and conversions.

Don’t let your business finance take up any more energy than it needs to either. Enter your information to see your options online at business.afgonline.com.au.