Find out how enterprising brokers can carve out their own niche
Australia's population is swelling and reflects an increasing array of ethnic, religious and sexual diversity. We find out how enterprising brokers can carve out their own niche
What, no party?
Australia is experiencing its highest population growth rate since 1989, and barely the flutter of escaping air from a balloon can be heard.
Despite being a quiet achievement, Australia reached a population milestone of 21 million in the last June quarter.
The Australian Bureau of Statistics is attributing more than half of that growth - 177,600 people - to overseas migration.
Now that's something to celebrate - especially for mortgage brokers who've already established strong ties with these ethnic communities.
Where are you from?
About 22.2% of Australians counted in the 2006 Census were born overseas, with the greatest number coming from England (about 857,000 or 4.3% of the total population of Australia) and New Zealand (about 2%).
But statistics show there are also significant numbers of migrants from Italy, China and Vietnam, and the number of migrants from India, Sri Lanka and Afghanistan is also on the rise.
Stepan Kerkyasharian, chair of the NSW Community Relations Commission (CRC), says these burgeoning markets hold a lot of promise for enterprising mortgage brokers.
"If there are any mortgage brokers out there who are not marketing themselves directly to specific ethnic markets they are certainly missing out on business," he says. "The most important goal of any immigrant family is to settle into the Australian society and to live in their own home."
The CRC promotes multiculturalism in NSW and recognises organisations that reach out to ethnic groups with its annual National Multicultural Marketing Awards.
Examples of finalists for the award include a Korean community credit union that provides loans and mortgages to Korean migrants hampered by a lack of credit history, and a company that deals with members of the Islamic faith who require special arrangements because of Islam's prohibition on the payment of interest.
"If a family comes from a totally different social system in their home country - or even from one fairly similar - the process of borrowing money against the value of a family home is always going to be different," Kerkyasharian says.
"Having that difference explained by a person of your own culture, or better, in your first language, is going to be more productive and more reassuring for the customer."
Parla italiano?
Mortgage brokers who have broken into ethnic markets attribute much of their success to language skills.
The 2006 Census reported that, other than English, the top five languages spoken at home were Italian, Greek, Cantonese, Arabic and Mandarin.
In addition to English, Belinda Phu, principal of the AIMS Home Loans' Cabramatta branch in Sydney, speaks Vietnamese and Cantonese.
Phu deals with the Asian community and says "it can be difficult to break into the market unless you know the language".
Customers with English as a second language normally deal with brokers by referral, she says.
"Otherwise they'll go directly to the bank. Around my area, all the bank managers speak two or three languages; that way they can relate to the customers."
While most customers would rather speak their mother tongue, Phu says that does not mean unilingual brokers are out of luck.
She recommends brokers who do not speak a second language make strategic alliances with multilingual businesspeople in the area.
"Solicitors, conveyancers, accountants and real estate [agents] - it's important to have a connection," she says. "It's who you know. People would rather deal with someone they know and have a referral source."
Phu says there are huge opportunities in these markets for brokers who know their products well and know how to put challenging deals together successfully. "Once you can do difficult deals, word of mouth will spread," she says.
Word of mouth has been crucial for Con Katsiouras, principal of Folio Finance in Melbourne. Katsiouras, who comes from a Greek background, has built a strong reputation in that community. He estimates about 50% of his customer base is of Greek ethnicity. While "not completely proficient" in the language, he says having a similar background has helped him build a rapport with members of the community, many of whom are now second or third generation.
Meetings are typically informal, he says. "A lot of my business is done over a coffee, or in a social setting rather than a business setting."
Katsiouras shares more than just cultural values with his Greek clients - many are also owners of small to medium-sized businesses.
"So from that respect, it makes it easier for someone like myself, who is also self-employed, to understand where they're coming from when they're looking for finance." He adds that these customers will seek him out "rather than going to a bank manager or business banker who has never necessarily built a business from scratch and gone out on a limb."
While Katsiouras admits it might be a hard market to crack for brokers outside the community, once you're in, you're in.
"It's the type of community that if people are happy with what you're doing, they will go out of their way to refer you," he says. "And people will generally ask a friend or a relative to refer someone they know."
Vicki O'Callaghan is the perfect example of a broker who has cracked a community that she is not a part of. Six months ago, she connected with an Indian couple whose referrals have helped her expand her customer base.
While the Brisbane-based principal mortgage broker of Knight King only speaks English, she uses translation services to help her bridge communication barriers and insists customers with limited English seek independent legal advice when they're completing their documents.
"The challenge is to have them really understand the process of what is going to happen," she says.
Beyond language
Using translation services from multicultural organisations can help brokers overcome language barriers, but it is not the only factor in connecting with ethnic communities.
Understanding cultural differences goes a long way in winning customers, O'Callaghan says.
In her 25 years working in banks, O'Callaghan gained extensive knowledge of Greek, Vietnamese and Indian cultures.
"I'll ask questions about their culture ... and be welcoming and talk about their community. That's how I make the connection with them," she says.
Sanita Pradhan, principal of AIMS Home Loans' Blacktown branch in Sydney, speaks Nepalese and Indian, and says about 60% of her client base comes from those communities.
While her language ability is an asset, she agrees it is not the only factor. Understanding customers' cultural values and being sensitive to their background is equally important.
She says cultural understanding not only helps brokers connect to customers, it helps customers feel more comfortable.
"In some ethnic groups, [couples] feel like it's OK if you focus more on the male applicant, or husband," she notes. "And some prefer you treat both applicants the same way. And in some, they prefer that the female is the focus - she is the one to answer. If you do it in the reverse way they will not feel good about it."
Pradhan advises brokers coming from outside the community to "understand where [the clients] are coming from and what they are looking for".
Medium is the message
Brokers who have been successful in reaching ethnic communities attribute this to a combination of networking and target marketing.
Phu emphasises the need to utilise community and ethnic newspapers, and urges brokers breaking into the market to explore other media outlets such as ethnic radio stations. Pradhan attends community events, participates in fundraising activities and also advertises in ethnic newspapers.
Mick Destanovic, managing director of Loan Link in Melbourne, says he uses real estate agents of the same ethnic background to steer Bosnian clients his way. He also celebrates holidays, attends cultural events and sponsors sporting teams from the Bosnian community.
Brokers outside of an ethnic community can utilise multicultural marketing specialists. These organisations can help brokers reach target audiences by providing a marketing strategy, translation services, culturally sensitive material, culturally relevant web pages and cross-cultural training.
MMM, a Sydney-based multicultural marketing group, took the 2007 Advertising Award from the CRC for its efforts to boost sales of Heinz corned beef to the Maltese and Filipino communities around Australia.
They chose to target those communities after research revealed they consumed an above-average amount of corned beef and liked getting information, such as news of promotions and competitions, in their first language.
Market research revealed that one community like corned beef for breakfast, while the other preferred it for dinner.
MMM geared its marketing approach to these communities by using actors of similar ethnic appearances in advertising material, and producing recipe brochures in the appropriate languages. As a result, members of both communities said they would buy Heinz corned beef in the future.
Jessie Wong, managing director of MMM, says the same tactics can be employed to help brokers.
Wong advises brokers looking to break into ethnic markets to do their research. A good place to start is with the Australia Bureau of Statistics, she says. The Census will show which communities have a higher proportion of people from different origins.
"After you identify the target audience, you need to identify the right media," Wong notes. Sometimes, that can be as simple as heading down to the local magazine shop and picking up copies of ethnic magazines and newspapers.
"Even if people speak English well, they might still like to read newspapers in their own language," she says.
Wong suggests that brokers using multicultural marketing services select an agency that specialises in reaching the audience they are seeking - some may have a better track record in Asian communities, while others may be more successful reaching the Italian market, for example.
Sheba Nandkeolyar, managing director of MMG, another multicultural marketing group based in Sydney, says brokers should consider building relationships with ethnic communities as a long-time endeavour. "Any marketer who wants to go for a one-hit approach is doing themselves and these audiences a big disfavour," she warns.
Nandkeolyar urges brokers to consider "cultural cues", such as specific numbers or colours, when delivering their message. Another important consideration is "purchase drivers" or providing a motivation that's culturally relevant.
"Pushing mainstream messages may not be the right strategy. While they may read or even understand what is being said, they will not act if the message is not relevant to them," she says.
In addition, Nandkeolyar suggests brokers build relationships with community leaders. Many people will look within their own ethnic community first for information, she says.
In God we trust
Marketing to a target audience isn't limited to ethnic groups. A number of brokers have forged strong relationships within religious communities.
The 2006 Census reported 25.8% of the population identified themselves as Catholic, while 18.7% declared their religious affiliation to be Anglican. About 18.7% of Australians reported having no religious affiliation.
Kate Thompson, featured as one of MPA's top 100 brokers for 2007, estimates 20% of her clients are Mormons. Thompson, a devout Mormon and principal finance broker of Perth-based Mortgage Miracles, settled 325 loans last year valued at $110m.
She says there is an instant connection with Mormon clients."Spiritually they know that you should be living a similar kind of standard in your life that they are. So that's a great foundation," she says.
While Thompson makes of point of "not shoving it down people's throats", her faith does come up quite regularly in conversation.
And the knowledge that she lives her life according to a certain code has also been attractive to people outside of the Mormon Church. She recalls one client - a minister of a different religion - requesting to conclude their meeting with a prayer.
Russell Melhem of All Choice Homeloans says there is a trust between Christian brokers and their customers.
"The ethical standards are very, very high," he says. "When I'm looking at someone from that community, I'm not going to be too worried about identity fraud or worried about money laundering or anything like that. [The clients] expect a particular standard also - that we won't be falsifying or asked to do, for example, low docs where they can't make their payments."
Melhem adds that his customers tend to have stable, long-term employment and simple needs.
"They say, 'Give us our daily bread and water.' They're only buying one house. They're looking at staying with a bank for a very long time. So if you're a broker developing your customer base around Christians, expect to have a trail commission for very long time."
There are strong networking opportunities within the Christian community and a number of Melhem's customers seek him out because he is a Christian. All Choice Homeloans is also recommended by the Australian Christian Business Directory.
Open understanding
Another market being increasingly recognised by mortgage brokers is the gay and lesbian community.
While the exact number of gay and lesbian people living in Australia is hard to pin down, a survey of 19,306 people conducted in 2003 (the largest and most thorough of its kind to date) found 1.6% men identified themselves as gay and 0.9% as bisexual. Of women, 0.8% identified themselves as gay and 1.4% as bisexual.
Pink Financial Services was launched last year to capture the so-called "pink dollar". The group has developed a home loan with Australian Finance Group (AFG) aimed at same-sex couples. Pink's home loan allows gay and lesbian couples to register income jointly and put both names on the deed.
Michael Luca, a Sydney-based broker with Mortgage Choice, has a large number of clients from the gay and lesbian community.
Luca believes part of the reason is location - both of the offices in which he works (Newtown and Bondi Junction) are situated in neighbourhoods with a high number of gay and lesbian residents - but another important reason is the office's "gay-friendly" environment.
Networking and target marketing also helps bring in clients.
Luca formed a networking group called Queer Professionals with his life coach three years ago that supports other gay and lesbian professionals through lead generation and mentoring. Members also focus on marketing themselves in the gay community with the assistance of the Sydney Gay and Lesbian Business Association.
"It has definitely introduced me to more clients from the gay and lesbian community, but it is like any networking - I strongly believe the best way to network is with like-minded people with similar interests and ideas," he says.
Luca says some customers seek out his services because he is gay, while to others it has made no difference.
"I always pride myself on being open, honest and finding the best solution for my clients," he says, adding that these are important qualities to any customer.
"When it comes to lending, and being their broker, they all come to me with the same issues, questions and concerns, and it is my role to find a solution for them and support them through the homebuying process," Luca says. "Although members of the gay and lesbian community may face other hurdles such as relationship/co-habitation agreements, and some issues with the government's definition of spouse in relation to the First Home Owner Grant, their needs and questions are mirrored by the wider community."
Anderson Vago, principal mortgage broker of Residential One Mortgage Solutions, agrees that networking within the gay and lesbian community has expanded his customer base.
Vago, who meets monthly with members of the networking group Fruits in Suits, says about 30% of his clients are gay. "I guess my advantage is I can build a rapport quickly because I'm gay myself. There is that level of rapport," he says.
But Vago says there's opportunity for anyone to establish ties with the gay and lesbian market.
"I think it is possible. The main key would be to understand the community and offer something unique for them."
Circle of influence
Alex Gonzalez, principal of Young Mortgage Solutions, acknowledges 50% of his clients come from a Hispanic background.
Being of Chilean descent and speaking Spanish probably helps him gain access to that community, but he's quick to point out that that's only one aspect of his life.
Sailing, soccer, dancing and church all play a big part in his life and he takes advantage of all these pursuits to extend what he calls his "circle of influence."
"Basically, it's important to have many interests and be a part of many communities."
Sound advice for any broker, regardless of the market you choose to focus on.
