Property Hub - Investment Insights & Inspiration - Get Invested: Alex Whitlock on the human cost of the Banking Royal Commission outcome

Episode Date: March 16, 2019

There’s been a lot of noise about the Banking Royal Commission findings, but for many people questions still remain: How is all this going to affect me? What if anything can I do about it? Who can give me honest objective answers on all of this? Well, over the last few weeks I have been trying to identify someone who’s an expert observer on this important subject – someone independent who is intimately knowledgeable across the full spectrum of property, finance and wealth creation policies, practices and people. Someone who doesn’t have a vested interest. And this is where today’s guest Alex Whitlock is perfectly positioned to give you all of the answers. Alex is a Director of Momentum Intelligence, a multiple award winning media, information and market intelligence business that connects over a million of Australia's professional services communities across the full range of property, real estate, finance, investment, wealth, retirement, legal, defence and Small to Medium Enterprise sectors.  Momentum Intelligence is a leading provider of quantitative research to Australian business leaders. They’ve a proven track record of delivering actionable insights to leading financial intermediaries to help shape their strategic direction in complex markets. Alex’s company has received four consecutive BRW Fast 100 rankings and is recognised as one of Australia's fastest-growing and most progressive media businesses. And Alex also walks the talk in the property arena, as an avid home owner and investor who has accumulated a joint multiple property portfolio currently worth over $7 million. In fact, we start our conversation by getting him to share the intimate details of his journey and learnings in property, so stay tuned. I’ve been a big fan of Alex’s work and his hosting of a number of industry podcasts for a number of years now, including The Smart Property Investment show with his business partner Phil Tarrant. I love his passion, his well-informed insights and his forthright, down to earth ‘tell it like it is’ approach – so there is no-one better to demystify the Banking Royal Commission. And I can’t emphasise enough that we all have a very small window of opportunity to protect ourselves, by pestering and influencing politicians of all persuasions in the next few weeks before the Federal Election. And the quickest and easiest way to make a difference is to do two things: Join the recently formed Property Investment Council of Australia by jumping on www.pica.asn.au/membership and paying just $5/yr to join and build the ranks of other everyday Aussie property owners, so that we have a united apolitical voice to educate and advocate with all governments and protect the interests of all like-minded hard working Australians. Jump on two separate websites to sign the petitions and use the easy tick boxes to email your local politicians - Just go to www.keepcompetitionalive.com.au and www.brokerbehindyou.com.au/support-your-broker/   Please ask your family, friends and work colleagues to do this now. Now we cover a lot of very important ground in this very interesting and in depth conversation today, so stick with us till the end - otherwise you will miss out on some real opportunities to protect yourself and your future in what is proving to be very interesting times in the short to medium term. So do yourself a big favour and enjoy Alex Whitlock. Alex's book recommendation: How to Win Friends and Influence People by Dale Carnegie Get Invested is the podcast dedicated to time poor professionals who want to work less and live more. Join Bushy Martin, one of Australia’s top 10 property specialists, as he and his influential guests share know-how on the ways investing in property can unlock the life you always dreamed about and secure your financial future. Remember to subscribe on your favourite podcast player, and if you're enjoying the show please leave us a review. Find out more about Get Invested here https://bushymartin.com.au/get-invested-podcast/  Want to connect with Bushy? Get in touch here https://bushymartin.com.au/contact/  This show is produced by Apiro Media - http://apiropodcasts.comSee omnystudio.com/listener for privacy information.

I was watching the findings of the Royal Commission, and I was so incensed by, you know what, do you know what really, really, really annoyed me, is you have a very few people talking about Australians as if they just don't matter, going, yes, we think it's best for Australians to have to pay a fee to a broker. I just thought, hang on a second, 60% of Australian borrowers now choose to use a mortgage broker, and that has grown year on year on year on year on year. And what you're essentially saying, you know, Mr. Hayne, CBA, is that most Australians are idiots. They don't know what's good for them.

Welcome to the Get Invested podcast, where we share great conversations with experts from all walks of life to uncover their secret know-how on where they invest their time, their skills, and their money, and the benefits that this has created. You see, the truth is that everyone invests. Every minute of every day, we're investing our time, our skills, our energy, and our money in something some of us are investing consciously some unconsciously sometimes for good sometimes for bad and sometimes for no impact get invested will help you to start living by design not by default i'm going to help you to make it happen not let it happen you'll hear the top tips on

how you can live with conscious intent so that you can live more work less and leave a living legacy by investing now. Listen to the show to discover the top tips on how to get started, make the most of your investment journey, and ultimately to be living your dream, not someone else's. More episodes can be found on iTunes or at bussymartin.com.au forward slash get invested. Thanks for listening, and now let's get invested. hi freedom fighters are you overhearing about the royal commission on just about anything and everything at the moment it seems you just can't turn on the tv radio or open a newspaper without hearing about some form of horror story that's unfolding on a royal commission there's currently

Royal Commissions on the aged, on abuse, on disability, and banking. And if you're a bit cynical, you might be excused for thinking that they're all one and the same thing, with just the names changed to protect the not-so-innocent. Now, in our world that has gone mad with political correctness, it seems that if the politicians are in doubt, then don't make a decision, just call a Royal Commission. That way, you can be seen to be doing something without actually doing anything. You get good press and you have someone else to blame for making the hard calls. So you can then play a variant of the old game of bad cop, good cop, or in this case, bad commissioner, good government. It has the sound and smell of an

episode of the old comedy, Yes Minister, where the intended target of the Royal Commission calls for one so it can then influence the brief and the outcome. The governor of the day then spends millions of taxpayers dollars being seen to do something about a very small unrepresentative part of an issue milks it for as much media exposure as possible and then the final report recommends wholesale ill-considered and knee-jerk changes that target the most unrelated and defenseless scapegoat it seems it's a bit like combining a game of blind man's buff with pin the tail on the donkey and if the reality wasn't so serious it'd be almost laughable now i understand why all of this royal commission palaver might be making your eyes close over and

your mind go to sleep and perhaps this is the real intention so that everyday aussies are so numb to the noise that major impacts on you and your family just can just slip through almost unnoticed because the sad thing is the repercussions of implementing the royal commission recommendations have the potential to negatively affect every australian in a big way if we don't all do something about it now. What do I mean by this? Well, let's take the case of the recent Banking Royal Commission on Misconduct. Now, we all applaud the call to stamp out shonky behaviour by banks.

And we all heard the horror stories about the big banks, like the Commonwealth Bank, in their fees for no service scandal, where they continued to charge the dead for a decade after they passed away, or where they sold worthless junk insurance that customers couldn't even claim on or their fantastic efforts in continuously increasing credit card limits by thousands of dollars for a declared gambler. Seriously, no wonder no one trusts the big banks. However, we need to look at this in context

because according to reliable sources, misconduct in the banking and financial services sector represents less than 1% of the total transactions. Yet, wholesale changes are being recommended that will negatively impact on the entire 100%. Now, it feels a bit like wanting to make global decisions on the future of the world's oceans based on swimming in your backyard septic tank.

Yeah, yeah, Bushy, I can hear you say, but is any of this really going to affect me? Well, sadly, yes, and potentially in a significantly bad way. While you would expect the Royal Commission to be making recommendations that produce better consumer outcomes by encouraging competition, sadly, the opposite now appears to be the case. And according to today's special guest, if the Royal Commission recommendations are all implemented,

there's strong potential that everyone's home values would drop, that home loan costs in terms of repayments, rates and fees will all go up substantially and it'll be much harder to get a loan so housing affordability will fall. There's also strong potential that many competitive smaller banks and brokers just won't survive which all plays back into the greedy hands of the big banks who caused all the problems in the first place. Now varying the common saying I've always operated on the basis that if it ain't brokered then you don't need to fix it and to continue with some really bad mixed metaphors it all looks like the small banks and the brokers are being thrown out with the

bathwater yep it's sounding more like yes minister every minute now i can hear you all saying so exactly how is all this going to affect me and why is this the case and what if anything can i do about it. Who can give me the honest, objective answers on all of this? Well, over the last few weeks, I've been trying to identify someone who's an expert observer on this really important subject. Someone independent, who's intimately knowledgeable across the full spectrum of property, finance, and wealth creation policies, as well as the practices and the people involved. Someone who doesn't have a vested interest. And this is where today's guest, Alex Whitlock, is perfectly positioned to give you all the answers.

You see, Alex is a director of Momentum Intelligence, which is a multi-award winning media, information and market intelligence business. And they connect over a million of Australia's professional services communities across the full range of property, real estate, finance, investment, wealth, retirement, legal, defence and small to medium enterprise sectors. Momentum Intelligence is a leading provider of quantitative research to Australian business leaders. They've got a proven track record of delivering actionable insights to leading financial intermediaries to help shape their strategic direction in very complex markets.

Alex's company has received four consecutive BRW Fast 100 rankings and is recognised as one of Australia's fastest growing and most progressive media businesses. And Alex also walks the talk in the property arena, as he's an avid homeowner and investor who's accumulated a joint multiple property portfolio currently worth over $7 million. In fact, we start our conversation by getting him to share the intimate details of his journey and learnings in property. So stay tuned for that. Now, I've been a massive fan of Alex's work and he's hosting the number of industry podcasts for a number of years now, including the Smart Property Investment Show with his business partner, Phil Tarrant.

I love his passion, his well-informed insights, and his forthright, down-to-earth, tell-it-like-it-is approach. So there's no one better to demystify the Banking Royal Commission so that you know exactly how it's going to affect you. And I can't emphasise enough that we all have a very small window of opportunity to protect ourselves with this. And we need to do this by pestering and influencing politicians

of all persuasions in the next few weeks before the federal election. And the quickest and the easiest way to make a difference is to do just two quick things. Firstly, join the recently formed Property Investment Council of Australia by jumping on www.pica.acn.au forward slash membership and paying just five bucks a year to join and build the ranks of other everyday Aussie property owners so that we have a unified apolitical voice to educate and advocate with all governments and protect the interests of all like-minded hard-working Australians. And you don't have to be a property investor to be part of that. So jump on board. Secondly, jump on two separate websites to sign the petitions and use the really easy tick boxes to email your local politicians.

So you just need to go to www.keepcompetitionalive.com.au, that's all one word, that's keepcompetitionalive.com.au, as well as www.brokerbehindyou.com.au, that's brokerbehindyou.com.au. Now, please get your family, your friends, and your work colleagues to do this now. now we cover a lot of really important ground in this very interesting and in-depth conversation today so stick with us right till the end otherwise you'll miss out on some real opportunities to protect yourself and your future and what is proving to be very interesting times in both the short to medium term so do yourself a big favor and enjoy Alex Whitlock Hi, Freedom Fighters. Now, we've been hearing a lot in the press lately

over some changes in the winds, and with all the palaver around the Banking Royal Commission, we've got a federal government election coming up in a couple of months. There's potential changes being talked about to capital gains and negative gearing. And I really wanted to boil it down today and talk to someone that can look at what it actually means to you as everyday Aussies.

And I wanted to talk to someone who's independent of the industry, get fully informed and can actually speak with authority as one, a property owner and investor in their own right, but someone who understands the intricacies of the full spectrum of both the property and finance industries and I'm very humbled to be able to welcome Alex Whitlock, who's a Director of Momentum Intelligence to Get Invested to talk about that. Welcome aboard, Alex. Thanks, Bushy. That's a very kind introduction.

It's a great pleasure to be on and I'm very happy and keen to speak to fellow investors. Fantastic, mate. Now, I've heard you in person and an avid listener of your work on the podcast that you work on with the advisor, et cetera. Yes. But rather than me try and fumble through who you are and what you do, tell the listeners a bit about yourself, what you do do, and run through your history, if you don't mind, too, please, mate.

Okay. Yeah, look, I'm not a native of this land, English by birth. Left the UK in 1996. I'm 51 years old now. Went to Hong Kong in 96. And so a couple of years later, I got a job in media. I worked in the sales side and I had an opportunity to really take my first steps into property investment, which for me was a life-changing experience and something that has been sort of very defining for me.

so um you know i purchased a property off the plan uh first first purchase i'd ever made um went through the sort of process of you know sort of saved up for a deposit and then you know there is a sort of a delayed settlement so the property's completed but anyway the the interesting experience for me in the run-up to settlement was that i to my absolute horror found that i was unable to find a bank that was actually willing to lend me the money to complete and you know i I had a 20% deposit. I had good income and sort of good rising income, but I was really struggling to get a loan.

And the developer actually said to me, when it was getting really close to settlement, you ought to look at using a mortgage broker. And I had no idea what he was talking about. First, this is my first purchase. Second, because back in the sort of the late 90s, mortgage broking wasn't very prevalent. And a mortgage broker came over from Australia,

actually based over in Perth, sat down with me. And the first thing that she said is, don't worry, I'm going to get you a loan, which I just found almost impossible to believe, given my experience as going direct to the banks in Hong Kong. So that was my first step into property purchase, financing a property, understanding how horrible it is from a first-time buyer's perspective. And really this is an absolute lifeline that came from a mortgage broker. So moving forward from there, that really created a large interest in me

in terms of investment, so wanting to better understand investment. So working in media as I did, I started to look at creating publication. I launched a publication called Portfolio, which looked at a range of different investments, but really with a sort of point around property. I then got a wonderful opportunity to come to Australia, which I've always wanted to live here. I got a chance to come here in 2001, and again, working in media, I was actually launching a retail property investment publication, and I was calling around a couple of lenders, that's a couple of non-bank lenders at the time, and one of them said, oh, look, before you launch a property magazine, because there was a very strong publication back then called Australian Property Investor, which I used to read, this chap said, oh, you should look at having an industry publication for mortgage brokers. And I went, well, hey, mortgage brokers, well, I know about mortgage brokers. Oh, you know, if there's nothing for mortgage brokers, I'm all over it.

So I made a few phone calls. I spoke to some of the aggregation businesses, which were, well, you know, sort of quite embryonic at the time, Plan Australia, some of the more established ones, AFG, and so forth. And then spoke to a few of the lenders, some of the non-bank lenders, small lenders, which you may or may not be aware of, Liberty Financial, Pepper Home Loans, and quite quickly realised there was this growing marketplace of these people who'd helped me out of my situation. So I launched a mortgage

broker publication, which I ran. It's called Mortgage Professional Australia, and I launched another one called Australian Broker, which is for a company called Key Media. I left there in 2006 and sort of set out on my own with my business partner phil tarrant um and we uh we we went into corporate communications because we built up quite a lot of knowledge around mortgage lending particularly around some of the complexes around funding for securitization so forth i've got a real i don't know maybe being english i'm sort of a bit of an underdog fan you know i was very fascinated by the banks because they very much dwarfed by the major institutions i really loved the fact that um in the 90s you'd got um wizard uh came to the marketplace and also

aussie home loans that really looked at the obscene margins that the big lenders had the banks you know the big four banks yes went in there and went and said well we can give two percent of this back to the borrower and we can keep two percent ourself and we're all making money and so i was very interested in the non-banks and what they really mean for australian borrowers um so uh yeah and then look subsequent to that i went back into media um launched a number of publications another mortgage broken publication um but also went into other areas a major legal publication uh publications financial planning um we've got australia's only accounts of publication we've also got we're in defense uh we're in a whole range of areas and

then i also got a chance to launch finally my um property publication called smart investment and And then more recently, sort of a couple of years ago, launched a publication that's also very close to my heart, being the idea I am, which is called Nest Egg, which is really looking in layman's terms at building sustainable wealth, not sort of short-term gains, but really about, you know, helping Australians think about where they want to go in terms of why they're building wealth, how much they need,

what their goals are. And then over the top of that, I've always been a bit of a nerd all my life, very research-orientated in all the publications. We did major research projects. So we actually took the research component out of all the individual publications and verticals, and a year or so ago launched a business called Momentum Intelligence, which I head up with some very talented people. Well, we now dive deep into certain areas.

one of the key things is mortgages and I recently launched a major report looking really at the impact of mortgage broking on the consumer on the borrower, so trying to get some facts that have really not been looked at so far Yeah, brilliant mate

you've covered an awful lot of territory there and it's the reason I've got you on the podcast You better get that, I do a lot of talking as well and I love that mate that's exactly why you're here because what I love about your approach is that you're quite holistic and you're quite long-term in your thinking. And each thing you touched on there is a very important part of that nest egg process,

which you very well mentioned, which is something that's near and dear to us on Get Invested. We're all about helping people to sustain and maintain their lifestyle by building wealth outside of their employment income. And property is certainly an important part of that. And what I also love about it is that because you've therefore touching each and every element of that process through your business activities, it also aligns with what you're doing personally. And you mentioned that first property that you secured in Singapore. Tell us a little bit, just to dive in a little bit more detail so that the listeners understand the difference between the contact you had directly with the banks versus a broker from Perth telling you in three minutes that, yes,

you can do this deal. And they probably put it back with one of the banks you'd already spoken to, I'm guessing. Yeah. Yeah, you know what? You're absolutely spot on. I'll just say, okay, I'd love to share that story with you. So I purchased – one of my clients – it's so funny thinking about it. One of my clients in a publication I was running was a developer called Central Equity, which develops and builds properties primarily in the South Bank in Melbourne.

And I used to sell them advertising. And these guys were very shrewd and very savvy. They're also really nice guys. And so rather than me being able to secure a long-term deal, they used to make me come down to their office every single month, and they would sign a month at a time. And they also used to submit an article in conjunction with their advert, and the article would be an informative thing. So it would be, you know, kind of the power of leveraging, or it would be looking at negative gearing, or it would be, you know, understanding, you know, cash flow. So I'd have to read this article. So I'd go along, and then I'd sort of say, oh, a fascinating article on negative gearing.

I didn't realize X, Y, Z. By the way, do you want to buy another advert and write another article? and in the middle of their in the middle of their room they had one of those uh models with little plastic trees and small people walking around and uh so it kind of it was there every time i did it and i remember i was probably after about the eighth or ninth advert that i'd sold them in the eighth or ninth article i'd read about property investment that i started focusing on this model and i said so of course as soon as i said so how much would one of these apartments cost and i was you know my cards are marked um but i've purchased a property i i've got i know they i know that they

say that people say that uh investment is not an emotional thing but it really is in terms of property because it's not like i don't know i buy shares i'm not emotional about shares shares are you know they're just purely numbers you know with you know of asx listed or globally listed businesses but property doesn't matter whether you're buying for investment you're buying bricks and mortar warmth shelter that people are going to live in and it's a creation of um you know accommodation uh stimulation to the economy because you stimulate in the the building uh industry um and it is emotional i got and i felt once i felt myself looking at this particular and i literally hadn't thought about it but as soon as i felt myself going on

this pathway of looking at this uh this model thinking about the about could i afford to put the deposit down how long would it be before the the property was completed so and so forth it was quite an emotional journey and I have to say it was a you know sort of a rewarding journey I came to settlement so in my role uh in Hong Kong at the time I dealt with um all the all the major banks uh and there's also a bank called Advanced Bank at the time there which is now St George yeah um so I knew these people very well they did various things with me in various different uh areas so of course I thought because I knew National Australia Bank I thought well I'll get a loan there because i'll go and speak to people i know and one by one nab westpac anz

advanced bank um i didn't speak conwell um they all turned me down and you're absolutely right when uh when the broker came over from uh from perth they actually placed my first loan with anz um yeah it was yeah it was it was really really it was a really very it was a really kind of tough experience to go from the you know the excitement and also the nervousness the apprehension of investing in property for the first time. Of course. So then getting down to finance and this sort of sense of finance slipping away and then the reality of what the consequences would be if I couldn't settle

was really pretty terrifying for me. As it is for everyone. And I think that emotional exercise is one, the reason why property is such a good asset is because people do buy with emotion and it tends to influence. So for investors to slipstream on that, it's a great, great vehicle to do so. But the emotional rollercoaster ride you go on in that whole purchase process and how fundamental financing it is, if you're needing a bank at all, it can turn an easy process into a very frightful one and a frantic one pretty quickly. And tell me, because this is really interesting for me, obviously,

because we see this all the time, because brokers, as we see it, are there to get a yes, whereas nine times out of ten, a bank's looking for a reason to say no. Yeah. Is that pretty much the experience you had? Is it just the broker knowing how to present the information in a way that was going to get a yes versus someone who's just looking and saying, well, no, that doesn't fit?

Yeah, it was. And I think, look, I probably – I was – you know, what I think I think I probably like quite a lot of people I don't I didn't understand the process so you know back then applying for a for a loan you need to be organized you need to have your income and breakdown of your income sort of documented very very clearly and I was a bit blasé and I kind of went along and sort of was a bit vague so I think the banks got inadequate information from me and went well this guy is not somebody we can lend money to he's a liability um but what was sort of bushy what i found i just speaking as a borrower as an investor

as a punter what was hard for me was the wall of silence and then six eight working days later sometimes 10 working days later just getting a no and that was the really tough thing um and this happened you know four different times with four different institutions and by the time i got the fourth no and i can't remember which order they went incidentally i'd be i would start to feel pretty crushed um when i sat down with the broker basically what i realized firsthand was the broker helped me with the application form now that that very simply means made sure that i filled it in properly uh i earned really good money in hong kong tax is really generous over there uh you know you get charged about you know 11 12 it was at the time so and i earned really good money so

i had plenty of money i had the funds to complete it was really about how i was presented as an applicant not about any kind of creativity in the world in terms of the way my finance presented just getting things done accurately and in a timely manner the other thing as well is um you know that that broker because they were active involved with dealing with the banks on an hourly basis working with a lot of clients you know that particular asset class so again you know south bank in melbourne in a city quite dense in terms of the apartment uh sort of construction there and what i didn't know as an investor is that because i just thought you go along and you earn plenty of money and you've got a deposit so the bank's gonna lend you money yeah you know it seems to

be straightforward what i didn't know as a as an investor is that different banks have different appetites for different kinds of asset classes when it comes to property i thought probably was just property so you know the broker knew where they knew which lender was their policy would would be in line with that particular asset class and i've got the decision really quickly from a bank that turned me down in hong kong so yeah the interesting thing there is that the adding to what you're just saying it's it's not only an appetite for an asset class it's an appetite for an asset class at a certain period of time because a lot of the banks will have uh budget allowances around how much they'll lend in that particular sphere when they hit their threshold they turn off the

tap and the average punter who says well thinks well a loan is a loan is a loan uh doesn't appreciate the nuances that sit in behind all of that and that that policy uh and asset uh appetite does fluctuate continuously over time so well i'll reinforce that and i'll stuff up the order you want to do things so i'll fast forward to the last purchase that i've made which was um Six months ago, in Deception Bay, I bought two blocks side-by-side, quite small blocks, 400-square-metre blocks. If you don't know that particular area, it is going through a certain amount of gentrification. It's an up-and-coming area, but it's still at the moment going through quite sort of a transition in terms of the kind of demographic there. And I went via broker. ANZ had been very much in the marketplace for that particular, you know, just to reinforce what you're saying about things changing.

So we went to ANZ to start with, and during the process, they moved out of that particular area. So we changed our application and went to a non-bank lender called Pepper that was moving into that particular area, had an appetite to lend there. So you're absolutely correct. It isn't just a matter of we don't lend in this one area. You move around, once you've fulfilled your, once a lender has fulfilled its criteria, its appetite for a certain postcode, asset class, you know, whatever, then they call off on that and then they might go back in a bit later on. So you're absolutely right. Yeah, and you've made a really good point in that loans aren't vanilla and it's the

complexity that's now attached to the whole lending sphere with the number of products the continual dynamics in relation to policy change, almost on a daily basis now, Alex, means that the average person who traditionally has bought the property and then gone to their bank and gone, right, get me a loan, they're in for some very challenging times because the world has changed very significantly, particularly in the last 12 months.

And I guess the underlying theme there is that if you're just dealing with a bank teller who might be doing a personal loan now and a credit card the next minute and three months' time he'll be off in another branch somewhere, their knowledge of the lending policy is pretty limited. And it's the reason why it took you so long to get a no because it's not until it hits the credit desk of the bank that they go nut and reject.

And so you've got a long, slow, painful no versus someone who's dealing with this every day and minute of their working experience where they can look at something And just as that initial broker did in three minutes, say, well, yeah, there's a deal here. We can get this to work for you. That's awesome, mate. Awesome. I think, you know, just look, I've taken loans directly from banks, but not for a long, long time.

And, you know, when I moved to, when I first moved to Australia, my broker was in Perth. For my next purchase, I actually went back to ANZ because I was very pleased with ANZ as a lender. And I walked into my local branch in St. Leonard's, which is where I worked. and the the branch manager there was absolutely fantastic she was really really on the ball and i got an anz loan through her branch level but you know what it's kind of the luck of the draw but at that stage you know i thought well okay that's good and then i went back to another branch to try and get another loan and i had a completely different experience and that was the last time i ever walked into a branch to get a loan and because it is luck of the draw um going into

into a branch um because you if you've got you know and again there's it's luck of draw because if that lender is lending for your particular need at that particular time that's one thing that's lucky the second thing is having somebody that's on the ball and that is so important you know to have somebody who actually is on the ball and gets things going and hustles the third thing is somebody having somebody who actually understands mortgages and occasionally in branches you'll get really talented people who understand a whole range of their own branch products mortgages being one of them but my experience often and i'm not anti-bank per se but in terms of mortgages i believe in going to the to go to the source that's going to get the

best outcome for me as a borrower and and the problem with going to a bank branch of any brand is you may well end up with somebody whose first role is not to deal with mortgages but what they do is they will run through this sort of like pre-scripted really for me as somebody who's I've taken out a lot of loans over the years. I can just tell it immediately. And there's one lender, Westpac, where we took out a Westpac loan through a broker. And Westpac, I don't know what their policy is now. At that time, they sent me off down to the bank branch.

Myself and my business partner, we've got a joint portfolio, which we'll maybe touch on a little bit later. And we were sent down to the local Westpac bank branch. And the experience was just crushing. And we were sat there with somebody who knew so much less about property than we did, but still went through this really rather painful kind of process. So the problem is it's the luck of the draw. I've had some fantastic experience with a really good professional at ANZ. I've had some really dreadful experiences with, I'm sure, very good people.

They just don't understand mortgages, even their own mortgages. I agree. And it's almost the McDonald's formula that you want fries with that, so here's a credit card and we'll flog you the insurance and all the blabber that you don't need and don't want, and yet they don't understand the fundamentals of how you need to structure things, particularly for a sophisticated property investor like yourself.

And then they're only offering you what they can offer you, not the 39 other lenders and 2,000 loan products that are out there that might be better for you. One thing I'd like to... You know, look, I am an experienced property investor. I'm not... There's things that I don't know. I don't know everything. But I'd say to you, even for the first-time investor,

in many ways it's more of a liability for a first-time investor going to a bank Because, you know, you may get advised by somebody who works in the bank that a particular type of structuring, i.e. principal and interest or fixing interest or having an offset account. So you end up with people, particularly for investors, I'm not, you know, look, you can end up getting some very poor advice from people who work in banks because they don't deal with mortgages and different people with different levels of experience enough. they'll just do what is on the sort of the song sheet they've been given so a broker from my experience and i've dealt with lots of different brokers uh will look at my need first and foremost and they understand when an interest only loan is going to suit me best or when a when a principal interest loan is going to suit me best i've never been with a broker that's ever recommended that i

that i fix my interest um but i've regularly consulted my broker to find out not necessarily should i fix or not because that's my my decision as a borrower but just to get a bit of a sense of what kind of deals there are in terms of fixed rates so i think you know even as a first-time buyer or investor you can probably come more unstuck going to somebody who doesn't really understand investment because they'll just recommend things that they think is okay but they don't know for a fact whereas most brokers that i've dealt with because they deal with investors some that have got one property some that have got you know 30 and something in some instances they understand how to how to structure investment loans absolutely and the devil's in

the detail too that's the unfortunately uh the bank's like a dumb it down so the only thing that people focus on is right and even yes even on that basis uh right is no indication of cost because when you factor in uh ongoing outgoing uh offset account potential impacts on cost a good broker will actually apples for apples look at what the true cost of a loan solution is rather than the rate. And then all of the other risk protection that gets brought in versus if I'm working for a bank, the only risk I'm trying to protect is my bank. I don't really give a thing about what's happening to you.

I just want to make sure that I'm protected. So, no, that's really interesting, mate. Well, tell us a bit more about your portfolio because that'll be interesting. So, you got the one in Melbourne as the first one and the last one. Well, I had the one in Melbourne. Had the, yeah, okay. Yeah, I'm the classic investor who doesn't have the first investments that they bought. I actually bought off that developer.

I bought four apartments and I sold four apartments. You know what? I made an interesting, I made good money on all but one. And again, you know, I moved to, I was really, really keen once I got going and I bought and bought and bought and moved to Australia in my, because it was a very favorable tax in Hong Kong. And because there was a lot more money, you know, the job that I did paid more money there.

When I came here, really all my life I wanted to come here. So I took a bit of a haircut and took my salary. Had to make a sale of one of my apartments. It's the only property I've ever lost money on. I lost about $10,000 on that apartment. So the first one I bought in South Bank, I bought it in 1998. I think I settled in late 99 or something like that.

And that was $217,000 or two better in a fancy apartment block. And I sold that for about four or five years later for about $120,000 profit. But one of the things, one of the interesting things, one thing that you learn as you go down the path is you've got capital growth in terms of your, you know, those apartments in the South Bank all have pretty good capital growth. but one thing that I learned was really about the cash flow

so one of the things that and everyone's got their own preference in terms of what they like to invest in so I'm not an advocate for one particular asset class or another but one thing that I learned was the price of holding property with you know

swimming pools and tennis courts and big public areas you know that's an expensive asset a lot comes off in terms of the body corp and so forth. So you end up, you know, it's one of the reasons why I'm doing what I'm doing now and one of the reasons why I'm so passionate about property,

and I'll get on to the SPI portfolio in a moment, is to show investors, fellow investors, warts and all, the realities of buying property. Because, you know, if you read some of the investment publications, they're very, very inspiring. You hear about investors that, you know, go from X to Y and millions of dollars, But the reality is that it's not really quite the case that, you know, after all the deductions, you look at all the true costs of investing and all the true costs of holding. You can do really well in property investment, but you've got to really have your eyes open to what those costs are.

So first of all, properties were off the plan, all in South Bank, all from central equity, and all went up in value, save the one that I had to sell because I had to sell it at a time that wasn't very suitable. So that was not the fault of the developer. had a bit of a hiatus after that so I got young kids my kids were both born in Hong Kong but they were sort of getting a bit older and there was pressure on me to slow down with my aggressive investing

and to have a bit of focus on looking after the family and actually take us out of rented accommodations so I reluctantly had to liquidate some of my portfolio and go and buy a home which, look, at the end of the day,

it's actually a really good move. But, you know, it's been an important thing. Absolutely. And then, as I sort of touched on earlier, when I took the leap into setting up a business with my longtime friend and business partner, Phil Tarrant, and we stepped into that in 2006. So, again, there was a, you know,

my own personal goal to build up a portfolio really was sort of, I'd got a couple of properties left in that portfolio at that stage but wasn't in a position to look at um you know leveraging any further probably market had been fairly flat i know that there is no such thing as the property market because it's a patchwork across australia but in general um you know markets have been fairly fairly static um so we moved back into uh when when phil and i we set up SPO to smart property investment because we wanted to do

what we love and what we care about and looking at the enabler through property investment and I love property for a host of reasons but the fundamental reason why I like property is it just ticks my boxes on a personal level one, I'm really not that smart

and you don't need to be a real scientist to invest in property, you just need to have the discipline the second thing is I'm really really impulsive um and you know i i dabble a little bit in shares i make the worst possible decisions for the worst possible reasons i panic and sell because i think that everything the world's you know going to fall apart or i buy because i think you know everything's going to explode into rainbows um the great thing for me the way that i'm wired with property is it is just

you can't do things quickly in property so um you know it is very very important to me um so you know launching uh smart property investment was was really critical to me something i believe so fundamentally and i want to share with other australians and anyone else that has an interest so the you know the realities the simple realities of making informed decisions around so what we wanted to do when we launched spi rather than just marketing um you know those that are in the profession um marketing their services or their products or whatever it is they do uh you know whether it's buyers agents or developers we decided that we would start investing in a portfolio and we would show how our investments went warts and all uh so we we

so we bought uh we publish the purchase price we went through every facet of uh uh all the expenses documented everything you know every single penny that went on expenses we detail every single penny that goes out on a regular basis um it's it's available on uh uh it's called property in action It's on the SPI Smart Property Investment website if anyone wants to take a look. So we built that portfolio. We started building that in 2011. And we started off in New South Wales. So back then in New South Wales, particularly in and around Western Sydney,

you've got this really sort of pent up – you've got sort of a supply of property in certain areas where the prices were really, really low. So I hadn't typically looked. My business partner, Phil, he originates from Seven Hills, which is sort of out west in Sydney, so he knows that area quite well. And we looked at the prices out there, and just for the Sydney market, you were getting properties out west that were really cheap in comparison to, you know, stuff that's located.

Similar stock either sort of up the north shore, you know, sort of down in the south, you know, getting in towards the inner west. You go out a little bit further out west, you know, sort of beyond Parramatta, and there's some, you know, instance there is, you know, Mount Druitt. There were properties which were just unbelievably affordable with really good yields on them as well. And I've come to sort of see over the years there is this balance, not always, but often a balance with the price or the value of a property

versus the yield. And if you look at many markets at the moment because you've had, you know, sort of exponential growth particularly in sydney the yields are very very low and that's really a symptom of like you know huge acceleration in terms of property values without the rental yield having a chance to catch up when we're looking out west and seeing rental yields of seven eight nine percent that said to me you know just just simply said this is a market which is probably gearing up for some sort of growth in some sort of capital growth and anyone could look at the prices you know seeing you know three bedroom houses going for like 215 000 you know not that

far outside sydney it's not hard to work out that potentially you're going to get that ground swelling value so yeah we started investing out west uh and uh look just to see you know i won't go through every property in detail but um the total purchase price across that portfolio we've got 17 properties uh in that portfolio um the total purchase price um yeah our point of purchase was a total of $4,314,000. The estimated value of that today is $7,405,000. Nice. The growth since we purchased that has been a sort of circa

about 70% growth. We've got debt on that. We've got a lot of debt, you know, and we've got debt of, you know, $5 million, which if you'd have told me that 25 years ago there would be $5 million in debt, I would have laid down and not been resuscitated. So it shows. Alex, my father always used to say,

it's the bank's money, let them worry about it. And I thought that's great advice, mate. Yeah. It's not how much you owe, it's how well it's working for you, really. But you know what, Walshie? We've had a really, really, really solid partner. Our mortgage broker has been pivotal in helping us grow our wealth.

And I'll just give you the background to that. So when I first came to Australia, And obviously, through negative gearing and managing my tax, I had an accountant who was actually out west. So he's a really, really, really hardworking guy called Brian McEwen. Charged me next to nothing and really had such a huge value on me in terms of advice around how to structure my investments. And he's just a really genuinely nice guy. so through brian brian recommended a mortgage broker uh called ross mccain who's a who's a mortgage broker for aussie um so we sort of met up with ross myself and phil started using ross

and of course you know in a relationship you know it's a bit transactional the first time because you don't know people and you start to you know the first thing is that we need to get a loan and you go through the process and the loan is secured and and you sort of get a sense for the fact it's worked well and then he used you know we use the broker again and then and then the bonds of trust start to start to evolve um yeah so ross was so ross then introduced us so through ross we've been introduced by my accountant ross and introduced a buyer's agent um that they had a relationship with but because now i i ross knew his stuff inside out he was thorough to the absolute you know tiniest detail with uh with everything around our investment he understood

investment absolutely in every single uh intimate detail so when he recommended the buyer's agent there was a high level of trust in that recommendation and the buyer's agent uh is a group called right property group and they have helped us grow this portfolio so again i come back to what i said i'm not a genius i'm not a rocket scientist you know but i've got the great thing about property investment is you have people around you a mortgage broker an accountant someone along the lines of a lender because let's remember the lender will look at your investment and they'll go

am I going to lend or not and as long as you get a lender that lends on that particular asset class they will help you decide if they say we're not going to lend you know what it may or may not be as good of an investment so you get all this help as an investor from all these different points

to help shape the way that you go ahead and it's not infallible you're not guaranteed to make money you've still got to you know, put the right moves in yourself. But we've been very, very – it is a partnership for myself and Phil. It's a partnership with our mortgage broker, with our accountant, with our financial planner, with our conveyancer, with our insurance broker.

So we have a team around us. And you know what? Our mortgage broker charges us nothing, which is unbelievable. And I go back to that first time when I got this loan back in Hong Kong And I sat there quaking when she came in and she said, oh, blah, blah, blah, blah, blah, you know, $1,500 commission. And I went, okay, so do I pay this now or do I pay? She said, no, no, no, no, no, ANZ will pay me that. And I sat there and I could not believe the fact that this woman had saved my life, but I didn't have to pay for it anyway.

So, you know, as an investor, I get huge help from, we pay our buyer's agent. We pay our accountant a small amount of money just to help with tax. We pay our mortgage broker nothing, and then you pay standard fees to conveyances and insurance brokers. So we get a lot of help in terms of building our portfolio. Yeah, it's a brilliant recognition, though, Alex. I always say to people, property's an elite team sport, but you're not a player.

You just manage the managers. That's your role. You get on with what you're good at, which is what you're doing with Momentum. Absolutely. You've got a good team around you that are elite in each position but understand each other and, more importantly, understand your strategy and then execute it, then you've got a very good way safely and affordably and enjoyably to actually build wealth while you continue to focus on your career, your income, and your friends and your family.

Totally, Bushy. And then, of course, sorry, the other part of the team that I haven't mentioned is post-purchase is then the property manager. So we use property manager. We don't manage any of our properties ourselves. and you know you find the right property manager as a partner and they're invaluable to managing that asset making sure that they get the right kind of tenants helping advise on you know on market rentals because let's face it you know you don't always know you know i've got i've got got a place you know replace antazi i've got places up in queensland i don't know what the

rental market is there so the property manager you know advises on on rental growth on what we should be charging keeping things retaining good tenants so you have a team around you to help you help support you with your investment portfolio. Yeah, and spot on. The property manager is the person who holds your most expensive asset for the longest, so you need a damn good one. We're hot on that. Absolutely.

That aspect of it. And for the listeners, I just want to reinforce my support for the fantastic work that you and Phil do with SPI or Smart Property Investment. I'm an avid fan and have been for many years, mate. Oh, thank you. I just love the open book approach that you have through property in action. It's real numbers on real properties so that there's no ducks and drakes,

no smoke and mirrors. You can see it there, warts and all. I think you have to take responsibility for your – I believe very strongly in taking responsibility for yourself in life, in finance. I think understanding what your goals are. uh now i don't believe in greed per se because you know if you know what you want and it's and it's realistic and it's achievable it's measurable and that's okay i think greed is when you don't

have a realistic view of what you're setting out to achieve and i think unfortunately greed comes often with ignorance uh and i think people fall foul of making bad investment decisions when they haven't really thought through what their goals and objectives are so with spi um you know with with investment in action we just want to really show people what you can build wealth uh slowly through property investment it is not uh i think the dangers of falling into the traps of uh of the less scrupulous operators out there are people who don't look at the whole um setup and maybe are drawn into making uh money quickly now we've had some properties that have just you know flown in value but that's been really sort of accidental rather than setting out with any

strategy of properties like doubling in value we've got some properties that have doubled in value in you know in as little as five or six years but that's not been because we've set out to try and cherry pick properties that are going to rocket up into the stratosphere we've bought properties that we feel uh we're buying under market value uh that have a good yield that have good potential for growth uh and are in a sustainable area with good infrastructure and And there's no – it's really about being conservative first and foremost with modest growth rather than ending up with a lemon that you end up in trouble. So, but look, you know what, by default, if you buy wisely, if you get good advice and support from people around you, if you do your own due diligence as well, not blindly listen to what you're told, use your own common sense as well. like i say i looked at that uh those problems out west and went look you know this kind of in in in

a city environment rather than say remote or regional when you've got a high yield uh you know and you look at comparable markets close proximity to the cbd common sense says to me that those are markets that are going to go and i get that reinforced by my buyer's agent um and i get that reinforced by my mortgage broker and i get it reinforced by my lender and everyone else in that to the team around me yeah it's really good advice mate and taking that long-term approach getting the team around you being very clear on what your goals are and how property is going to contribute that are fundamental if you're going to last the distance and you're sort of echoing very very much the approach that uh myself my good wife have taken but on a on a different

scale because at adelaide of course uh you know medium price here is uh uh well under half what it is in Sydney. But early days, we adopted a very similar approach to you. We bought properties. I can remember I bought one down south of Adelaide for $84,000 that's now worth about $440,000. And that's a three-bedroom home on a half-acre block. So, you know, very different scale, but very similar approach in terms of looking at areas that aren't there yet but have high potential really good rental yields but there's a there's a lot of uh demand and infrastructure that's going to start pushing up the the capital value so now awesome mate look look uh that's been a really good rundown and uh now all of us have got a really clear picture on

what you do and and how much you get your hands dirty uh in the property investment space uh so it's always good to talk to someone who who does what they tell other people to do because that's a bit of a rarity on occasions in our industry, as you'd know better than I. But, mate, what I'm very keen to pivot now to is the winds of change that are upon us. And we've already seen, as I've mentioned already, property is a game of finance. If you can't get your hands on the money, you can't get your hands on the property. That's as simple as it gets. And there's no doubt about it. There's been a lot of focus on the banking and finance industry particularly over the last year and a half has been half a dozen different and separate

studies done on the whole system brought to a head of course by the royal commission on banking and the misconduct focus there uh and yes it's probably we're in a bit of a window i think where we've got a federal election looming and and therefore things get much more political than what they would otherwise but it also means that people quite often start making massive decisions on very little information and part of the reason for getting you on today is to really drill into the Royal Commission on Banking. I guess demystify it for the listeners in terms of why did we have it, what were the outcomes and what are the potential implications to the average person on the street if they're endorsed?

And then politically, what are each side thinking and how should that start influencing individuals in terms of where they're going to put potentially a very important vote over the next couple of months? So breaking it down, the Royal Commission on Banking. Talk us through, because you've had your hands all over this in terms of keeping an eye on what it's doing. Just in very simple language, can you just talk through what it is,

why it was called, and then what the recommendations were, and then we'll start looking at impacts from there. Yeah, no, sure. I mean, the Royal Commission's been – Labor has called for a Royal Commission many, many times. Coalition has resisted for one reason or another. It's fundamentally – look, you've got some very, very powerful financial institutions here in Australia,

but look worldwide, and it's no secret to all of us that, you know, They're there to make money and they're there to make money out of their customers. The issue is, you know, where is the customer placed in terms of the focus of the institution and are they putting their interest before the customer they're supposed to serve? So this was an investigation into misconduct across financial services. It was broken down into many, many areas. The area, you know, superannuation being one of them, banking, financial services. The area that was of relevance to myself was really around sort of the mortgage function from the banks.

So as the banks were dragged in front of the Royal Commission one by one, one of the areas that the Royal Commission wanted to look at, and quite rightly so, is the issue of conflicted remuneration. Now, why is this an important issue? Well, let's just move away from mortgage broking for a second and let's look at another area of financial services, which is the investment side of things, so financial planning. so you need to look at who is paying the financial planner where they're where their incentives lie

because if me as a hard-working australian maybe maybe retired maybe look getting going up to retirement if i've got fifty thousand a hundred thousand five hundred thousand dollars of my own money um and i'm being advised as to where to put that you've got to look very closely at um what the incentives are for directing that is it am i you know is that being am i being directed to where I'm going to get the best return on my $500,000 or is it where the person who's doing the advising is going to get the highest commission? And that in financial planning is critical

because, Bushy, at the end of the day, if you get bad advice around financial planning, you know, the outcomes can be catastrophic and you can end up with no money or a severely impacted investment, you know. So that is a big issue in terms of, you know, so conflicted remuneration in essence is something that the Royal Commission

was very, very keen to look at. Now, in broad brushstrokes, it's very easy to go, okay, well, let's have a look at everybody. Let's have a look at how everybody is paying. Who does the paying? Okay, let's look at mortgage broking. Okay, who does the paying there? Well, I see. So the banks are, as I mentioned to you earlier, you know, when I was told by my broker that the bank was paying, I was overjoyed and the service was free to me.

But quite rightly, the Royal Commission is saying, OK, let's investigate what the ramifications are around a lender paying a broker to bring a borrower, you know, in theory to that particular port of call. But the reality is what you have to say. So this is so. So the Royal Commission looked into remuneration. Now, where things get very complicated, Bushy, is that the banks – so in Australia, you've got four banks that have a very significant footprint in terms of retail here. They dominate the marketplace. They have around about 80% of the market share at the moment, which is starting to show signs of erosion since mortgage brokers have opened up the marketplace, first of all, to more Australian borrowers, but also, more importantly, to more Australian lenders. But I'll sort of touch on that a little bit later. Right.

So what you've got is, you know, you've got – you need to look very closely at, you know, sort of who these lenders are and what their motives are and what the impact is for borrowers being taken to certain lenders. Now, if you look at the financial planning scenario, the ramifications are quite significant because I'm handing over my money to a financial institution who will invest it well, badly, mediocrely. In mortgage broking, it's very, very different. And so really, to connect, mortgage broking is very, very important

because in essence, you can look at it simplistically and say, well, hang on a second, the lender is paying a commission to the broker, to the borrower, so therefore it's conflicted. The reality is, for me as a borrower, and I'll just speak as a borrower before a researcher, when I need to borrow money, not every single you don't go to 20 banks and they're all going to lend you money the chance of finding one bank that will lend you money is is is really quite hard so what a broker does you have to understand that the broker doesn't like if i've got a hundred thousand dollars of my money

i can promise you if i go to a financial planner anybody will take my hundred thousand dollars if i want to borrow a hundred thousand dollars as an investor you may only get one bank that will consider lending you that hundred thousand dollars the other thing to remember as well just comparing the two analogies you know if i have a hundred thousand dollars to invest with 20 different uh fund managers you will get a myriad of different outcomes depending on where those assets uh are placed so i could be investing into you know small cap eastern european tech funds where it might go into a global kind of balance fund you get very very different investment strategies very, very different returns. When I'm borrowing $100,000, I am borrowing $100,000, a stack

of banknotes, which is, it's the same wherever I go to, whether I go to ANZ, CBA, Westpac, Pepper, Liberty, Latrobe, it doesn't matter. It's still a hundred grand. The other thing is as well, the interest rate is almost identical. You were talking about, you know, dollars doesn't sense in terms of in terms of interest differential um so back to this issue about remuneration for the banking royal commission um looking at you know looking at uh how brokers are paid and who they're paid by was a real critical thing now one of the banks uh cba had an agenda through the royal commission so cba had looked very closely uh at a model overseas uh which is based in the netherlands uh cba had gone away and had a very close look at this model and it's seen

that um in this marketplace where the borrower effectively pays for the service of a broker what the cba had seen is that um never mind about the outcomes of the borrowers the banks in that marketplace have retained significant share because of the restructuring of that particular marketplace so cba basically put forward was an advocate of uh the netherlands model you know Because in principle saying, well, I think it's a reasonable proposition that the borrower should pay a fee to the broker because then there's no conflict. The motives were ulterior, I believe, that it was probably in the best interest of the lender and not in the best interest, certainly, of the borrower and certainly the detriment of the broker. So I was watching the findings of the Royal Commission, and I was so incensed by, you know what, what really, really, really annoyed me is you have a very few people talking about Australians

as if they just don't matter, going, yes, we think it's best for Australians to have to pay a fee to a broker. I just thought, hang on a second, 60% of Australian borrowers now choose to use a mortgage broker, and that has grown year on year on year on year on year. And what you're essentially saying, you know, you know, Mr. Hayne, CBA, is that most Australians are idiots. They don't know what's good for them, that even though they're not getting the right outcomes every year, more and more and more and more borrowers go and choose a broker. So I thought, well, because we've got the we reach about through through the media titles on the other side of my business, we reach about a million Australians every month. so we decided we would go out and we would survey those million Australians and find out exactly what they thought

so I wanted to do a survey we reach about a million Australians every month through our various media assets so I wanted to find out what Australians thought what their experiences were because there's going to be this legislation potentially going through which will change the way that Australians access finance and it would be dictated to them where they go

where essentially there's a danger they'd be forced back down to the branches they've been departing from over the last few decades. So we went out and asked the question. So we asked borrowers, close to 6,000, 5,800 borrowers completed the survey. We asked them whether they went direct to a proprietary channel, which is primarily a bank, or if they used a broker. So the first thing we want to do is really look at satisfaction from the channel. So first of all, for brokers, satisfaction levels were, of those that were very satisfied and satisfied, you had a total of 96%.

So that is remarkable. If you break that down a little bit further, so specifically, 84% were very satisfied. So that's really a resounding endorsement. Whereas if you look at those in terms of those who used a bank, you had about 67% said that they were satisfied or very satisfied, but only 26% said that they were very satisfied. So you've got a real gap in terms of satisfaction levels. It was quite interesting to look at why customers went to a channel.

They went because they believed that they were going to get the best product their needs they believed they're going to get a choice of product which is bizarre when you walk into a uh no a bank branch that you think you're going to get choice but there you go yeah um but what was interesting really was uh digging down a little bit deeper is finding out um looking at loyalty to that particular channel so yeah asking asking customers uh whether they would return to the same channel critical 95.8 percent of those that have used a broker would choose to use a broker again and i'm not necessarily saying wow it's the same broker but would use that channel so this says that basically that the outcomes that they sought were almost you know uh unanimously

delivered that's an unheard of sort of result but if you look at the so again if you look at the uh the proprietary channel uh you only had about 31 percent of borrowers that would that would choose to go back to that channel and this really enforced this really reinforces data that i've that i've really mapped over the last two decades which has been the growth of the of the mortgage broking market from about 15 when i first came to australia in 2001 to now 60 of all new loans are being written by mortgage brokers now this is just australians who are en masse moving away from the banks bank branch based banking and certainly acquiring a mortgage it's just there are just better options out there than what they have served australians

30 40 50 years ago it's just not the primary choice anymore yeah so um so that was really really important but the real uh the real essence of this report was um really to look at what was being proposed to the royal commission which was this issue of conflicted remuneration and i know as a borrower that i i've used a broker oh look you know including you know what i probably use a broker 50 60 times over the years through refinance through new purchases through various kind of transaction so i believe very strongly in them as a borrower yeah but i wanted to find out uh what people's attitude was to pay a commission because this was the proposal of course the proposal was that we moved this this borrower pays fee um so we asked borrowers we had a little

statement uh at this section section of the survey saying um the uh the broker is paid a commission by the lender upon settlement of your loan. So with this in mind, would you be willing to pay a fee? In replacement for the broker receiving a commission, what would be your willingness to pay a fee? 58% of those surveyed, bear in mind that this is 96% of them are satisfied, very satisfied, 58% said that they would not pay $1 to a broker as a fee. now that in my from my interpretation this is nothing to do with value the value is already

clearly stated by brand loyalty by channel loyalty sorry yeah that 96 percent of people are satisfied are very satisfied 50 uh 95.8 would go back to that channel however as soon as a fee is put in place you're gonna 58 won't pay a fee now i i my position on that is because mortgage broking has always been free people don't like to pay for something which they believe and understand to be a free service it's almost almost generational it's not nearly 30 years people have had access to it so you go from getting uh all that value for nothing effectively uh to suddenly i might have to pay a few thousand bucks well it's pretty obvious what the answer is going to be but you've got to look at it you've got you've got you've got to look at this

from common sense and this is the really critical thing that brokers do so for me as a borrower i can go and i can go and have a look online i can go and look at interest rates and i can go and say you know the xyz who i've never heard of usually is offering you know a 3.2 percent you know uh interest rate but the reality is when it comes to taking out you know a 500 000 200 000 you know one million dollar debt i really need to to go very very carefully so the value that brokers anyone can look and see what interest rates are every bank publishes their interest rates that's fairly straightforward but i need a broker to help me first and foremost with the application secondly to understand where policy is right now so i don't waste my time going down you know down

a blind alley with a lender so but the reality is you know 58 of borrowers said okay look i will go back and go through the burden of doing all that myself but you know you can say that still you You know, 42% were prepared to pay a fee. But the really frightening thing for borrowers and look for the industry is that only 3.5% of those that were surveyed would pay a fee that is equivalent to just the upfront commission, not the entire commission the brokers rely on. Bear in mind, you know, what people don't understand, brokers don't get paid salary. Brokers don't get paid for their work. Brokers only get paid when a loan is successfully settled and the borrower's got the right outcome.

And I know there's times where my broker has gone down the path. They put, like I said, with Deception Bay, they put an application in with Deception Bay and it knocked it back. Well, guess what? The broker gets absolutely zero of that work. So then they resubmitted the application, went back down the path with Pepper Home Loans. That broker only got paid when that loan was settled with Pepper.

So you've got to understand what... Yeah, I just want to put some colour around that if I can, Alex, in our own local situation here in Adelaide because the average loan size here in Adelaide is a lot lower than what it is in the eastern states, obviously because the property value is a lot less. So, you know, we keep very close records on this and over the last 12-odd years,

the average loan size is about $320,000. Okay. What that means in terms of how the brokers get paid, as you say, they don't get paid often until four to eight weeks weeks after the loan settles, by the way, by the time the loan yield is through. So there's quite often a four-month period from the day you come to see me to the day I get paid a cent for doing that work. For that $320,000 loan, the average initial payment, called the upfront, is about $1,750.

And then the trial, which diminishes over time because it's set in accordance with the loan amount and and to us trial is so just just to um clarify so you know a commission is paid to a broker upon a successful settlement of a loan some of that is paid up front and some of it is deferred over the life of the loan to support the broker in servicing the clients so that's the trail that you're referring to yes yes so that ongoing payment as we say it is to service, all of the other needs that a client requires. Now, in the Adelaide context, that ongoing payment equates to less than $10 a week. That's what we're saying.

And if someone approaches one of our brokers and they need to do a top-up or a product switch or they go from variable to fixed or from interest only to principal interest and vice versa or if they have any issues with their online banking or that they're just not sure about the bank so they'll bring us and then we'll have the discussion uh for them uh you don't need to clock up too many hours before you're well behind on that and uh yeah i don't know of many people that would take on a job where i see you today on average there's about 60 hours work between the brokers and the admin support to produce a result now you do the maths on that at 1750 dollars i get paid in four months i've spent 60 hours doing it that's about 35 bucks an hour

so it's it's not a massive amount of money that they're doing for which makes me laugh this is why i want to go out and do this survey because at the end of the day you know and for me i'm not a broker um you know i'm an investor i'm also somebody who has access to information but i sort of took a step outside and went you know and just bear with me for a second but in many ways you know look who cares you know within the industry the industry you know brokers obviously have to look at their livelihood but i try to step outside of that and go okay look certain industries get disrupted all the time who really cares if mortgage broking disappears you know you know yes you'll have 17 000 people out of jobs and that's that's terrible but let's just try and

look at this in the cold light of day it isn't about that why is sustainability and broking so critical it is for australian borrowers and let me tell you if mortgage broking goes because you ripped the guts out of broker remuneration the consequences for us for people like me are significant you will have first of all you have got a whole network you know of lenders that many people don't know about if you're not in the industry but mortgage broking opens up a level playing field for challenger brands to get in there now why is this important well this is important very simply because they can charge competitive rates because they're small lenders which mean the big four banks have to keep their rates down now the big four banks want to charge

as fat a margin on top of their loans as they can get away with because at the end of the day let's let's be really clear banks give back first to shareholders not to borrowers okay yeah so this whole issue about broker remuneration can get a bit lost in translation but for me as a borrower the reason why i looked this with horror and felt that i wanted to do something to help educate government media and really everybody out there is about let's not get bogged down on broker remuneration and if you're a broker it's critical but what does it mean to australians well what it means is if the reason why there's a cynical move from certain lenders try and disrupt or dismantle the broker market by attacking broker remuneration is the outcome will be brokers cannot sustain

their business smaller lenders don't have a level playing field to compete so then they start to drop out the market as competition diminishes the major banks push up their margins okay so that means higher interest rates for us as borrowers but there's a but the other thing as well is what they do is they stop lending to self-employed people they stop lending to people with irregular income they stop lending on properties they don't want to lend to because there's no competitive pressure from smaller lenders to force them to lend the money where they don't particularly want to lend because you know what every bank has a quota when i've lent my quota and when i've pumped up my interest rates hey happy days i'll just sit back and i'll i'll continue to lend the people i

want to lend to you know for australians to continue to have access to competitively priced finance mortgage broking is critical for mortgage broking to remain sustainable they need to be able to make a living from doing what they're doing and my survey said very clearly you know that people just will not pay a fee and if you if you have to switch to a fee a fee-based service mortgage more crumble this is why i push back very hard and put out research and look i'm not a lobbyist i'm not a political animal but i provided it to those that have been lobbying it's it's you know the report we put out has gone to both sides of government and it's helped educate um you know politicians that are involved in the decision making process about how critical mortgage

broking is to the australian economy and ultimately to the you know to the favorable outcomes of australian borrowers and it doesn't matter whether you use a broker or whether you use a bank because this is the thing you know australians they should have a choice it should not be dictated to to say yeah you people can't use a broker anymore because you're going to rip the guts out of the way the brokers are paid everyone should have a choice if you want to use a bank branch and i have done in the past hey use a bank branch but you should be able to choose um and even if whether you're a broker customer or a bank customer the tide will rise on every on every loan because as soon as brokers you know the impact they have on competition goes

everybody's mortgage rates will go up. Yeah. Sorry, I'm getting all worked up again. No, and so you should. And I guess I'm a little bit jaundiced looking from the outside in. We've got a small boutique concierge business here that looks after the needs of our stable of property investors and homeowners.

But I don't know whether you're a fan of Yes Minister, Alex, but it's very reminiscent of what I'm seeing there. And so what interests me is it was the four banks who called the Royal Commission in the finish. Yeah. And there's a bit of a big flag that goes off my head when the people that are going to be reviewed are the ones who call for it.

There's an opportunity there potentially to influence the terms of reference. So there's a focus on misconduct, and misconduct, correct me if I'm wrong, represents less than 1% of all the transactions in the industry. So it's a micro-ism of what we're talking about. And following the yes minister sort of exercise, government goes, great, we can blame someone else for making some really hard recommendations.

We can get some great press out of this in a run-up to an election. And we've got to find a scapegoat who can't defend themselves to pin the tail on the donkey. It's just so easy as well. It's just so easy to point the finger. It's so tangible. And if you don't understand, there's so many journalists that I believe that my report and many people in the industry have been able to educate mainstream media journalists. And the penny has started to drop. I'm seeing far more balanced reports in the Fin, the Australian, in various of the mainstream media.

because in simple terms looking at that remuneration saying oh hang on a second you know a commission-based payment from a lender is really easy to draw that conclusion that it is that a conflicted incentive the thing is just just thinking about something you were saying earlier in terms of one thing you've got to remember for a mortgage broker yeah you're right you may have to wait you know um 10 12 weeks you know before you get paid but i can tell you you know for myself for my mortgage broker my mortgage broker would always say alex get a pre-approval well guess what he does that for nothing yeah he will prepare a pre-approval for me and then you know what i haven't even found a property i'm going to start looking i may never use that

pre-approval that he has created he's giving me a pre-approval and then i find a property the chances are then that the pre-approval is for a certain amount i then have to go and put in a full application to you know to get to get a conditional approval and then that has to go through another process to get you know an unconditional approval and then it goes through settlement this this can sometimes take nine months yeah for a mortgage broker so and i know the brokers are not incentivized by look they need to earn a cross and the commission is how they earn their bread and butter but the commissions are all so similar we're not talking about lender a will give two percent and lender b gives five percent or lender a gives you 0.5 percent lender

the B gives 1%, they aren't, the band is so narrow, you know, it really isn't, you know, in financial planning, you've got commissions all over the place, from different, let me tell you, you know, in mortgages, and mortgage broking, they are so, they are so slim, it makes no difference, most brokers don't even know what the difference is. Well, it's hair-splitting, it is hair-splitting, and if we're really talking about, you know, For me, again, as a person looking from the outside in, fully applaud a Royal Commission that's going to address this conduct and fully applaud anything that's going to improve consumer outcomes, that's going to look at the conduct of people in the industry and is going to promote and maintain as much competition as there is. So I'm getting a very cost-effective result, 100% behind that. But I guess the massive gap between that and the recommendations, though, doesn't make any sense because from where I sit, what the Royal Commission has allowed the big banks to do is throw a grenade to deflect attention onto brokers who are, you know, over 80, nearly 80% of us are one-man bands.

So we're a very small industry that doesn't have a lot of teeth or resources. and for the Royal Commission then to say, right, one of our major ploys is to move to a user pays exercise, so rather than the banks pay the broker, the consumer has to pay for it, then what it's very neatly done is allowed the big banks and, you know, let's not hold back, Commonwealth Bank, the CEO was very forthright and his anti-opinions around brokers mainly because the Commonwealth Bank has the most to lose.

Their market share has been gone from, I think it was over 50% at one stage. Alex, you'd know better than I will. Yeah, that's right. Look, you know, Bushy, I mean, I'm very passionate about this because, you know, again, for me as a borrower, if I ended up in a situation where I was in 1998 running around the bank, you know, with my hair falling out, you know, it's all fallen out now nearly, But literally, you know, running around the banks in a blind panic, like scared for my life that I wasn't going to get a loan.

The thought of going back to that just terrifies me for other Australians, for young people coming up in the marketplace. And at the end of the day for the banks, this is no, it's just business. The CBA, it is just business. They have looked at their erosion of their market share to date. And it's easy to do the maths, to look at the equation of the, my survey reflects the fact that people are leaving bank branches. just because brokers give them better outcomes. It's that simple, you know. And CBA has been able to work out what the impact on their market share will be

with a very expensive branch network over the next five years if brokers continue to take the same share. And they will lose probably 5% of the market if that continues. So it's just business. And they've got to do something about this. And the Royal Commission is the perfect backdrop to put a very tangible plea to go, well, look, we will operate in the best interest of Australians. We believe that, you know, a borrower pays fees, the right structure, you know, and it's so plausible.

The fact is, it's absolutely inaccurate. And, you know, look, the Commonwealth Bank has been really critical for mortgage broking in the past. You know, the Commonwealth Bank has excellent products. It has been, you know, I looked at what the Commonwealth Bank, how the Commonwealth Bank supported mortgage broking. ironically in 2008 during the gfc we were hit so hard we were shielded in australia let me tell you by in in terms of mortgage broking by the commonwealth bank continued to lend you know now that was a time when and there was a leadership there uh in third party there was a lady called kathy cummings who was there as head of third party at that time and she absolutely defended

mortgage broking she's the value that brokers had and at that particular critical time um she she bank brokers and stayed in there now you know that's because they saw the value in mortgage brokers and the outcomes they delivered but i think the thing is now that you know that the mortgage broking market share has swung so far that now there's just a change in policy at common bank and they're just going look this is now a threat to our market share not a compliment you know so common bank has been you know it is just business nothing personal uh they are you know They have excellent products, and they have really backed Australian lending in times when we've really needed them to be in the marketplace

because other lenders have pulled out almost completely back in 2008. If you look globally, you know, during the GFC, you know, people just couldn't borrow. So, you know, right now, this has been a very cynical move. It's just business. It's just business, and they're looking to protect their market share. And it's a great deflection. If you've got the mirror and you're deflecting attention

onto someone else to take the heat off yourself, you can very easily become a wolf in sheep's clothing, which is, I take my hat off to the major banks in this exercise because they've very cleverly used the Royal Commission to potentially better their situation at the expense of consumers. And I guess my biggest concern is this, because let's join the dots. If the recommendations are fully implemented,

then there will be a lot of brokers that leave the industry. A lot of the second-tier lenders will lose access to clientele, which pushes people back to the big banks, which means that rates will increase, so high costs to people trying to get home right across the line. And then the ongoing flow-on from that is that high costs means people will be able to borrow less, which means they'll have less to pay for the property, which means it will also ultimately affect property values. This is something that I don't think people have twigged onto enough because it's just a natural progression. We've said a couple of times already, property is a game of finance. So the less money you have to put into a property, the less property you can buy.

That places… It excludes. The thing I love about property, you know, I've got friends who, you know, have fairly low income But have been able to create a better future for themselves, for their family, for their kids by being able to use leveraging, you know, by competitively priced mortgage products and being able to get in the marketplace. You know, it's hard enough getting together a deposit. But what will happen if we are not careful is you will end up for a great many, you know, hardworking Australians who maybe, you know, are not in the higher income brackets. They're going to get excluded from home ownership, first and foremost, from the opportunity to build wealth, you know, through investment and to have the opportunity to get ahead.

You know, and that really saddens me, to be quite honest. you know should you lose that competition there is you know you look at any graph to see you know how the margins have come down since the 90s through the pressure that competition has put on the major banks they've gone from a five percent margin down to about a two percent margin that's three percent back to borrowers you know that is critical that's significant massive that's 60 percent drop that's that's a massive drop in in margin and i i can't say enough again that it's not, forget the mortgage brokers, they're the pimple on the pumpkin. The pumpkin is the impact that's going to have on every Australian's potential home

value because of the lack of ability to get your hands on the money. And I guess that for me, there's an urgency around this in that we've got a very limited window of opportunity for the average homeowner to start making some noise because we've got an election between now and the end of May. Politicians are making up their minds right now as we speak. Perhaps share with us where each side of politics is currently thinking around this. And then most importantly,

what I'm keen to wrap up this part of the discussion on is what can people do now to try and make a difference, Alex? Yeah, absolutely. so just first of all i haven't been dealing i'm not i'm not a lobbyist i'm not political animal i've just i've just gone and done the research um but from from what i understand so the uh the coalition um will uh has so so both sides of politics have now said that the only thing that they're not going to accept in terms of the recommendation the recommendation is that we go to a client fee model now both sides of politics have said that they will not uh they will not

switch to that but right now as things stand um both sides of politics have said that in uh in mid uh 2020 um the deferred part of the commission i.e the trailing commission uh will be scrapped so uh that that is what what is uh what has been said at the moment by um the the coalition haven't stated on that but labor have said that they will implement that this proposal incidentally from the royal commission is that trail commission goes mid 2020 june 2020 and then three years later there is a review of uh of upfront commissions um so the coalition has not made any any comment whatsoever labor has said that trail commissions will go but that uh um upfront commissions will be changed to a flat level of a maximum of 1.1 percent um which kind

of means that what they what they're doing in essence is they're saying they're going to kind of make up for the loss of trail by adding that adding that to the upfront the problem that i have with that uh look apart from again for mortgage brokers having um the value of their business tied up in that trail apart from the fact that mortgage brokers deal with their customers you know on a regular basis with inquiries about an existing loan and that that remuneration just that support for brokers isn't there there is another angle to this book she um what that means is the deferred payment um helps smaller lenders operate in the mortgage broking marketplace because paying out a 1.1% commission for smaller lenders,

that's a lot of money for them to actually part with as a lump sum. And it will impact competition, let me say. It's going to hurt brokers because they're used to a marketplace where that kind of commission, the commission is deferred. There's less commission overall for the brokers, let's be very clear on this. So 1.1 does not make up for the trail that's going to go. So there's less commission out there in total, but it's going to put pressure on smaller lends

because they've got to pay that up front and it puts pressure on brokers because they're essentially working for less money. So in terms of politics, this is just my opinion, this is very, very hot at the moment or it certainly was a couple of weeks ago because we'd endured many, many months

of these quite shocking reports that have come out by the Royal Commission of Australian farmers that have lost their property of people you know debt people being charged fees pretty abhorrent behavior from the major institutions sure um so it's a policy it's a very hot topic politically the politicians have wanted to get out there and say what they what they think there is a part of me that that that believes that as as this fades from the public eye as long as australians are aware i think the first thing is you need to be educated you know whether you're the customer of a broker whether you're not exactly

how your choice and your access to finance is impacted um what needs to happen is that voters need to be aware of how um their you know how they will be impacted i'm not saying this should influence whether you vote one way or another i'm not going to get into politics but i think you need to uh make it be known that you are aware of um exactly what the impacts are there are a number of campaigns going out i believe one of them is uh broken behind you um there are various petitions that are being circulated and the last time I looked you know there were many

many tens of thousands of just customers who wanted to make their feelings known in terms of the impact Reading some of the advisor exercises over the last couple of days I think there's 80,000 on the Don't Kill competition and a very similar number on the

Broker Behind You exercise. I guess my feeling is not so much about the vote it's more about But we've got from now until the election for everyday hardworking Aussies with a home loan to be bashing down the doors of every politician saying, hey, don't let this go through because it's going to affect my children. It's going to affect the value of my home because if we're not talking to them and we're not making that presence right across the board, then we deserve to get what we get. I've always been of the belief, mate, when the time is right, you make a noise, and if you don't, then suffer the consequences. And for me, we've got eight weeks, essentially, to be bashing down the doors of the politicians saying, hey, you had a Royal Commission that supposedly was going to give us better outcomes

for us, that was going to sort out the conduct, it's going to improve the competition, and what you've actually just done is put dirty gate crosses against every one of those. It does not favour the Australian borrower. You know what? You will get probably, banks will lend a similar volume of money at me, you know what, on their terms. And you've got to look at the equilibrium. Banks want to lend in terms that favour them, i.e. with the highest possible lump of fat on top for them, with the policy that's just the easiest for them to consider, for assets which are a no-brainer. On the other side of the seesaw, you've got people who can only afford to buy what they can afford to buy, but they need flexibility in terms of lending.

And by flexibility, you know, I just mean, you know, you have to have lenders that will help self-employed borrowers, people setting up in, people who are running their own business or want to set up a business. I'm a business owner, you know, and I've gone through all this as a business owner. It is really tough, you know, let me tell you. You know, I work hard. I employ now 130 staff. I pay significant money back into the economy through the taxes that I pay, you know, through GST, through everything else. But for me as a business owner, it's very hard to borrow money. There are a lot of people who are going to not be able to access finance if we lose competition.

And competition, the brokers are the guardian of competition in this country. And it is really critical. Everyone has a responsibility to be educated and to let their feelings be known because everyone will suffer. That is my absolute belief. And it's certainly what the research tells me. Yeah, and sort of backing that up, I think the take-home messages for all the listeners out there are jump online and sign the petitions that are active in social media.

There's Don't Kill Competition and there's Broker behind you. If you just Google those words, then jump on. Send an email or one of those sites is actually pre-written emails to all the MPs on every side of the fence. So make sure all you've got to do is tick the box and it flicks that to them so that they're getting barraged with this. The other thing that I'd be suggesting people do, Alex, is that in recent, over the last couple of years,

there's been a national group that's formed called the Property Investors Council of Australia. And you don't have to be a property investor to be part of it. You can be interested in property investment. But the aim of that group, which has been driven very strongly by Ben Kingsley, who you know quite well. I do.

I did a joint podcast with Ben. just a week or so ago. Just talking about the same stuff. Same stuff. Well, I'm driving the Picker exercise here in South Australia. Fantastic. Get behind it. Well, just on the Mum and Dad investors,

there's 2.2 million of us here in Australia. We all got together, and it's five bucks a year to be on board with Picker. So, you know, we want people on board, so we've actually got a unified group that's looking after the interests of average property owners that can lobby banks and governments to start representing the views of the people on the ground, mate. So I very strongly encourage anyone listening to jump onto Pickett. It's www.pica.asn.au.

Pay your five bucks and if we can get enough people together, then anyone in the political or bank arena is going to have to start listening to us because then we've got a unified voice to do so. but that's been awesome you've really covered off some great ground there i'm i am going to flick us straight into uh the infamous ambush bushfire lightning round mate which is uh five very quick questions that i ask of everyone that comes on the podcast and they're questions that the the audience keeps asking me and uh so i'm going to jump straight into that mate your favorite quote and why what would that be oh uh oh there are many probably one of the ones

that i that resonates with me is uh comparison is the thief of joy um and i i think that that really rings true in so many things you know when you start to compare yourself to other people i think you know whether it's in happiness finance you know where you are in your career i think it's a really i think it's a real negative rather than positive i think be the best that you can be do the best that you can do and and focus on um conducting yourself in a way that you know that you feel proud of um you know striving to achieve the goals that that matter to you not necessarily that are sort of pegged against what other people have achieved in life yeah love it yeah absolutely perfect and rolling straight on from there i'm going to give

you we'll open up this one a little bit what's the both the top book and the top podcast that you would recommend people have a listen to and outside of yours um i would say in terms of i tell you in terms of a book that i that really had an impact on me and again look i'm a salesman by trade or at least i fell into sales in my 30s i won't bore you with the rest of the details of my earlier life but um how to win friends and influence people is not just um a really good guide to better understand people and therefore be more more effective salesman in terms of creating the right outcomes i think you know whether you're you know a husband a wife son a daughter a business partner an employee an employer that really i think is for me and there

are many great books out there but that for me i think is really um really a good guiding light in terms of how to uh you know sort of conduct yourself in in a decent way through life totally great mate dale carnegie classic it it changed my life mate i read it uh would have been 35 years ago and as a it was written way back i think the 1920s i think for memory absolutely and it's still relevant today and it's it's actually a a manual on how to conduct yourself in life there's no doubt about it you follow those uh age-old principles and you're going to do well in whatever you're doing so absolutely crack i'm like what about a podcast you suggest uh people have listened to apart from you know what i've got a bit left the field here uh look i really like uh ben

king's podcast uh the property couch i think you know he's he is um very very informed he's very curious uh and he's very passionate about helping people um you know understand where they're going you know he's not a spruiker of uh of anything in particular he's just a somebody wants to share experience uh knowledge and help people make better better better decisions so from you know from that perspective that's a good one yeah i'm going to be very left of field there is a podcast that i really like which is called joco podcast uh joco is uh he was a uh a a navy sea i know sorry a U.S. Marine, it is very much, so he will do reviews of books written about from military, sometimes from foot soldiers, sometimes from commanders, from going back to the Napoleonic

Wars right the way through to, you know, Second World War through to Iraq. And I personally find that really very revealing in terms of traits of leadership. People have endured incredible hardship, people who've behaved with great courage in extraordinary circumstances. It's not going to be everyone's cup of tea, but I personally quite like that. Yeah, that's a cracker. I think Tim Ferriss interviewed Jocko. Yeah, Tim Ferriss has been on there as well. He's joined Jocko on that podcast. I think it was Jocko who said that freedom

equals discipline, which is one of the quotes that I live by. I think it's just absolutely nails it, mate. Now, awesome. Now, moving back into the investment sphere then, what's both the worst and the best piece of investment advice that you've ever received, Alex? The worst bit of investment advice. The worst bit of investment advice I ever got

was when I very first started investing in Hong Kong and before I bought property. and uh i was told that there was there was a uh a hong kong fund manager called peregrine which was looking like it was going to go bust and i was told there was a there was a a ramping rumor that went around that uh bmp paribas was going to buy it out and i went down i bought you know several thousand dollars worth of shares gambling being greedy believing that this this this rumor was going to come into fruition and I was going to quadruple my money.

Let me tell you, uninformed decisions without responsibility, with greed, and I touched on greed way, way earlier in this. That's greed. That was not an informed investment decision. It was greed.

It was, hang on a second, I'm going to gamble and then, of course, they went bust and I lost everything. I lost several thousand pounds. It wasn't a small amount of money to me back then. It put a big dent in my first deposit. That was the worst investment advice I ever had.

uh the best investment advice uh you know what i i think um some of the best advice that i've had your instincts to do your research uh i think having confidence in your own decisions um is really really important i think backing yourself not as i say by taking a wild swipe in the dark and hoping that you're going to come out on top having that sort of real you know trusting in the force type thing but going away um doing your own research quantifying your own research and having faith in your own decisions um i think is you know it is probably the best advice that i was ever given early doors uh i think also advice again i look back at um when i bought my first properties uh with central equity the guys there were really very inspirational

for me look what i buy off the plan stuff in the future look no but the fundamentals of what they taught me they taught me to take a long-term view uh not to look at making a quick dollar uh they taught me you know that they taught me the power of capital growth and they taught me the power of leveraging so i think understanding really the potency of leveraging in the long term is really really valuable when the penny drops around taking your time and letting leveraging you know letting capital appreciation with leveraging work its magic then that that was most fundamental thing for me yeah brilliant they're time-honored principles those there's no question about it mate what about a personal habit that contributes to your investment success

personal habit um that's a difficult one um i i think this is a habit look some of that some of the habits that i do i keep myself fit um i don't necessarily eat what i ought to eat all the time but i do balance that out with uh with either swimming running going to the gym so i keep myself fit and if i keep myself fit i keep myself i find i keep myself mentally agile yeah um but i also uh bushy i try and not remain static in terms of the way that i view the world um i try to um i'm very thoughtful about where i'm going very thoughtful i'm very thoughtful about wealth uh about how much i need how much i really want and exactly why i want wealth you know and by wealth i don't mean you know it could be could be a hundred bucks could be a thousand

dollars could be a million dollars it's relative to every single person but understanding um you know where i'm going and why i'm going and how uh investments relate and can translate to happiness to balance with you with your loved ones with your family with your friends you know so i think trying to remain nimble in terms of the way you think is very very important and keeping yourself fit and keeping yourself agile yeah yeah sage advice there mate uh again uh simple things that that a lot of people just don't make time for and pay the price later on. So awesome, mate. Now, just to bring it to a close, mate,

you've been extremely generous with your time, mate, and very informative around some hot subjects that people really need to be thinking about now. But what's next new and exciting for you and the Momentum team, mate? So, well, for me, it might not be the right time for everybody else, but I'm just in the throes of conducting a significant research project looking into satisfaction with lenders across the board so you know from smallest through the largest I find this fascinating we've done this for 10 years and it's really really and again

look just just quickly harking back to mortgage brokers so I've mapped why brokers choose particular lenders over the last decade and I can tell you now that the reasons and this is long before remuneration was brought into the question it is they will choose a lender based on turnaround times, policy, and the interest rate on the loan. They're the factors. So it's going to be – I'm really looking forward to getting into this. It's an old friend's particular research project, and every time we go in, we get about 1,000 brokers

give their feedback on that. So, look, very nerdy, but that's what I'm looking forward to doing next. And, mate, if anyone wants to get in touch with you or the Momentum team or all of those various outlets through smart property – I have to say, thank you so much for listening to me for so long. I'm humbled and honoured that you've listened to me talking. Whatever area you're in, we publish for accountants, lawyers, financial planners, real estate agents, as well as property investors, people looking to build wealth. We've got significant publication.

We've got a major publication in the defence industry. We've also now moved into space, looking at space in the Australian space industry. And so, look, we publish for professionals. Check out our publications. We've also got, you know, my business. And check out the Momentum Media website if you want to see if your particular profession is catered for. And if you ever want to get in touch with me, you know, you can reach me through Momentum Media or Momentum Intelligence. Terrific, mate.

Look, you drive some fantastic publications and you drive some fantastic events around industry as well that recognise high-performing people in all of those spheres. But what I love about what you're doing with Momentum is that you're drawing the needle through all of those so that as a holistic overview of what's happening right across the market, there's no better person to talk to and that's the very reason why we've enjoyed having your company on Get Invested today, mate. So I really appreciate your time. Of course, it really has been an absolute pleasure. Thank you so much for inviting me on

and hey, look, maybe let's get you across and have a chat with you on one of our podcasts soon. That'd be good. Would love to, mate. Appreciate your time, mate. We'll talk soon. Thanks for having me on. Thanks for listening.

Well, Freedom Fighters, how good was that? If you get a summary of all this investment gold in the show notes, just email me on hello at khgroup.com.au. That's H-E-L-L-O at khgroup.com.au. Or check us out at www.bushymartin.com.au forward slash getinvested. I look forward to joining you next week for another episode of the Get Invested podcast. so thanks for listening and as always dream as if you live forever and live as if you die tomorrow