'Amen' to MFAA disclosure stance, say brokers

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Brokers have given the MFAA a heavy pat on the back for talking tough to the government on the current requirements for multiple forms of credit disclosure documentation.

Yesterday, Australian Broker Online reported the MFAA had requested the government ditch the current form of disclosure documentation, and combine credit quote, guide and proposal into one document.

The MFAA claimed that the plethora of documents required had caused inconvenience to both brokers and customers. CEO Phil Naylor said the splitting up of these docs had also increased cost.

Speaking with Australian Broker, Peter O’Connor from Cavalier Finance in Brisbane said he welcomed the MFAA's lobbying approach on disclosure documentation.

O'Connor said as the situation stands, “we have to get through an inch of paper” before even getting to the application, and that customers often "don't want to know about it", and don't read the documentation.

O'Connor said in addition, brokers who elect to take customers through the documentation are put at a competitive disadvantage, with customers feeling they are too difficult to deal with.

On the Australian Broker Online Forum, 24 industry players, mostly brokers, were moved to comment on the approach, with most supporting the MFAA's move wholeheartedly.

Commenter Nicloe (10 May 2012, 10:18AM) said in her experience customers did not read the documents.

"I send by email the Credit Guide and the Privacy statement immediately after the first contact. Each has a 'sign here'. Very few sign and send back and I then have them sign an original at the first face to face meeting. As for all the other docs, my research is that they are simply not reading them either."

Melo (10 May 2012 09:59 AM) agreed the government had made the documentation too dense.

"NCCP over-complicated a simple process. It should be one page document, without all text and crap."

Industry consultant Kym Dalton (10 May 2012 10:08AM) argued disclosure and comprehension were not the same thing. "Evidence is that the greater volume of disclosure, the less is meaningfully comprehended," he said.

Meanwhile, Rach (10 May 09:57 AM), along with many other brokers on our site, was moved to praise the MFAA's stance. "Amen to the MFAA!" she said.

  • sidbroker on 23/05/2012 8:21:18 PM

    The benfit to being a member of either organisation is that we get the enjoyment of giving them close to $400 per annum for doing Jack S--t!!!

  • Broker on 21/05/2012 10:08:54 PM

    For 10 years I have really struggled to see any benefit / relevence from the MFAA and the FBAA, even more so now given ASIC's involvement.

    Industry leadership that actually delivers positive results for it's members is just a pipedream in my eyes and I can't see that changing,ever. It just is, what it is.

  • Wilko on 17/05/2012 9:45:23 AM

    What is this rubbish about daily movements to the FBAA? I have spoken to three colleagues in the past two weeks who have moved to the MFAA from the FBAA because of their spineless and coninuous backing of ASIC and not doing enough for their members. At least the conversation is being had by the government.

    MFAA are making hard decisions as I see it (not that I agree with all of them) but at least they are doing something as opposed to the FBAA who sits back and does everything that ASIC want. Inactive and unthoughtful at best.

  • Steve McClure on 11/05/2012 2:42:26 PM

    You are correct Sally. MFAA last week stated that they were disappointed they had only been given a few days to make submissions to counter Treasury's latest ammendments to the NCCP. However, those ammendments were known and published back in September 2011. Maybe their about face has something to do with the number of members haemorrhaging daily to the FBAA. Are they genuine about legislative reform or do they just choose soft targets, such as reducing the forms by a couple of pages?

  • Sally on 11/05/2012 12:32:38 PM

    MFAA had their chance to comment on the need for these documents prior to them being introduced. Why does the MFAA insist on trying to getting media coverage "after" the event. They had their chance, ASIC didn't listen to them. And that is because they don't really have a voice, they only pretend they do. If you go back on these articles and look at all the ones that MFAA say they are doing things for the brokers, and then look at what was asked for and what was received, not many match up. MFAA doesn't win arguments with ASIC anymore than you or I.

  • Peter on 11/05/2012 10:26:52 AM

    I'm a Financial Planner and a Broker. Having been through and still going through the reams of paperwork that this Govt has imposed on the Financial Planning industry and re-experiencing it now in the Mortgage industry, I can say without fear of doubt that the Govt will ignore the MFAA's appeal; my clients screw up their collective noses at the FSCG I provide them with that deals with this issue and 99.9% never read them. I go through it with them at the beginning of any meeting and provide any new ones the next time I see them. Some clients now have a collection of them numbering 6 or 7. They even offer the old ones back to me as a joke! I explain it is an important document but have not had anyone in all the years come back to me with questions about the document. This Govt is so far out of touch with reality. It simply wants to be seen to do something and imposes rules like this without understanding what people really want. They also will not admit they are wrong ... ever ... and so the stupidity continues. Roll on the election! I lost faith in the MFAA some time ago. However, if I wish to remain in the broking industry, I am forced to belong and comply with their rules. More cost! For what?

  • Peter on 11/05/2012 10:09:21 AM

    don't pat MFAA on the head too soon. This doesn't mean that the government will agree to a change.

    Is this action by MFAA enough to saving the dying membership moving over to the FBAA? I don't think so, they have to try harder than that.

  • Steve McClure on 11/05/2012 10:08:14 AM

    OK, I'm different, because I don't think 1 page or so can suitably show the client what you are doing for them, cover privacy, commissions, as well as show that you've made the necessary calculations for the client. Shouldn't we be using the compliance documents as an opportunity to show the clients our value proposition and draw attention to the benefits we provide over a "back of the coaster" deal? It's part of a professional presentation and it's not an inch of paper. We just have to do it better, electronically and cut out the requirement to duplicate the responsible lending clauses on the lender's app form.

  • Jitesh Raniga on 11/05/2012 9:59:08 AM

    I fully support the MFAA stand and this will put brokers at a disadvantage point as clients going to the bank direct does not have to face this.

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