LA mansion visit divides banks and broker
A soiree at the Playboy Mansion in Los Angeles this week for gun brokers affiliated to the Australian Finance Group has become a talking point in the industry. The event also serves to highlight the tension fostered by "sponsorship" by the banks of one of their most important stakeholder groups over and above commissions paid for loans.Brett McKeon, managing director of AFG, wrote in an email that the tour to LA was for "AFG's top performing members and staff" and that it was the fifteenth year the firm had hosted the event (which is held in different places each year).McKeon wrote that the itinerary for the five-day program for "brokers, staff and sponsors" included "a charity function at the Playboy Mansion".Energetic delegates had the option of a Santa Monica cycling tour, alongside more standard fare such as "conferencing sessions".Numerous suppliers in the home-loan value chain, including banks, were sponsors of the AFG tour, which is in keeping with past practice. While sponsorship income is small - in the order of A$1 million - it is important in the context of constrained margins in the broking business and a fall in underlying profit for AFG in 2011. (Reported profit last year at $9 million was less than half that of the year before).Several bank sponsors opted to disassociate themselves from the choice of the mansion visit. Spokespeople for ANZ, Commonwealth Bank and Westpac all advised that their banks did not sponsor the mansion event and their staff did not attend.Senior bank staff responsible for broker relationships were part of the tour, including Tom Carroll from ANZ, Kathy Cummings from CBA and Tony McRae from Westpac.AFG set individual brokers (who work for affiliated firms) a sales target of $8 million in home loans to qualify for the tour.Brokers also had to meet a target for the sale of AFG-branded loans. National Australia Bank is the funder of these loans.Women were the winners of 15 out of 25 categories in the Australian Mortgage Awards in 2011, an event sponsored by the publisher of trade titles MPA and Australian Broker.