A mooted broker ‘Certified Practising Certificate’ tipped by the MFAA and Commonwealth Bank’s Kathy Cummings is an unnecessary impost in the eyes of a major broking franchise.
The MFAA’s Phil Naylor has said it is the association’s stated goal to introduce a practising certificate to ensure that practical broker competencies are achieved and recognised.
However, Mortgage Choice chief executive Michael Russell told Australian BrokerNews practical competency should be policed by broker groups and lenders rather than industry associations.
Russell said the NCCP environment removes the need to place an additional educational requirement on brokers. “The law clearly mandates that a mortgage broker's ‘practising certificate’ is their Australian Credit Licence or Credit Representative status, as issued by ASIC,” Russell said.
Licensing, along with lender accreditation, should provide the only proof of competency required of brokers, he argued.
“While I remain highly supportive of the MFAA as an industry association, the MFAA, in stipulating a higher standard than that required by the law, can only prescribe this for its members, not the industry overall,” he said.
As such, Russell indicated that Mortgage Choice had no plans to adopt a practising certificate. He said the company already had quality control programs in place, and contended that lenders also kept strict watch over broker quality, ensuring that brokers who consistently submitted low quality deals “are easily identified”.
CBA’s executive general manager of third party Kathy Cummings has argued for the introduction of the certificate, saying it would improve conversion rates and create channel efficiencies. But Russell said lenders had an equal responsibility to ensure efficiency and seeing applications through to settlement.
“Application to settlement conversion is a priority for both brokers and lenders. It is a high priority for brokers in particular because successful conversion encourages improved productivity and customer satisfaction. Similarly, it is important to lenders as it can greatly reduce origination costs. Everyone’s goal is to improve efficiency and reduce avoidable costs, delays and frustration; both brokers and lenders have equal roles to play in achieving this aim,” he said.
However, Russell did not believe lenders were placing undue blame on brokers for poor conversion rates.
“I haven't heard of any lender that has divested the sole responsibility of loan submission quality and conversion performance on the broker. Lenders will from time to time voice their concerns over such matters in the media as a call to action to help remedy any adverse quality and conversion trends,” he said.
Cummings has previously tipped that if conversion rates fail to improve, commissions could be put under further pressure. Russell indicated that this is a fair consequence, so long as lenders are pulling their weight.
“Both brokers and lenders have equal roles to play in improving conversion rates. It is fair to say that if our conversion rate deteriorates through no fault of a lender’s processes, then so too will our commission,” he said.
For more on this story, check out Australian Broker issue 9.5
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