Joe Sirianni, president, MFAA
The MFAA's new president Joe Sirianni joins the industry body at an exciting juncture in the MFAA's history. At the time of writing the organisation was finalising details on its strategic review - set to be released at the association's AGM at the end of November.
He says the review will provide a very strong blueprint for the way forward in the next two years "and hopefully with a new strategy we'll be able to drive significant change".
For Sirianni, it's a chance to effect change - which is one of the main reasons he got involved with the MFAA 10 years ago, while he was still working for ANZ.
"I always felt a willingness to participate and help shape and influence things," he says.
But it's not as if Sirianni is bereft of things to do. The executive director of Smartline has been building the company up since he joined in 2004 and most recently helped merge the franchise group with WA-based Mortgage Force.
While he admits serving on the MFAA takes its toll in terms of his time, he says it's more fun than work.
"In the process you meet some really, really wonderful people and it's a great opportunity to network and build relationships. It's all voluntary of course, so no one can really be abusing you for volunteering your time for an industry association."
On the subject of apathy and industry body bashing, Sirianni admits there are a few cynics, but says the vast majority are all quite positive and have plenty to say (even if it's not always good).
"I don't think [apathy] is a big issue in our industry. If you look at the membership survey that the MFAA ran recently, they had something like a 27% response rate which is unheard of. So I think a lot of people do like to get involved and pass comments. I think this industry is quite different from most - it's quite dynamic, vibrant and new and I think people really do get engaged."
Going forward, the biggest issue for the MFAA will be the new pending legislation. The association has been working on the new rules for close to six years and while it's been a slow train coming, their effort should come to fruition this year.
"We've been talking about it for quite a long period of time. The reality is it's moved pretty quickly and efficiently in the last year or so under Kevin Rudd and it's going to come in under July. I don't think it's a bombshell, but will be a process of getting used to a new regime."
The new legislation gives ASIC control over licensing and regulation - powers formally held by the MFAA. But Sirianni says the changes in no way undermine the importance of the body.
"One must not associate membership with an industry association - just because licensing has come in it doesn't mean you don't have to belong to an industry association - that's a fallacy. The reality is the industry needs a professional body."
While licensing is a significant impact to the industry - Sirianni says that in his mind it's the bare necessity.
"Just because you've got a license doesn't mean you're a professional. The MFAA still has a role in lifting and providing professional standards.
"To date the perception is I'm forced to be an MFAA member because the lenders won't deal with me otherwise - so we're shifting from an industry association to a professional body and the members want to adhere to the highest ethical standards of professionalism, code of conduct and belong to an association that represents something and has meaning to their customers, in terms of an improved service proposition."
Part of lifting professional standards is the MFAA's emphasis on education. In July 2009, the association cut 1,500 from its ranks for failing to meet the minimum Cert.IV educational requirement.
"You can't keep barking without biting. Once in awhile you've got to flex your muscles and say we're serious about lifting standards and this is the process. Anyone that can't do it you have to really question why they wouldn't do it."
The association has hinted they might raise standards beyond the licensing requirement, but at the time of writing it was yet to be announced.
While 1,500 is a significant number of members to cut, there is speculation that legislation will drive an even greater number from the industry. Decreased membership will have an effect on the MFAA monetarily, but Sirianni says the association has not yet determined how the fees will be affected.
"Suffice to say that at the moment, our membership fees are perhaps the lowest of any professional industry association in Australia. The board decides what it will be going forward, but we haven't come to a conclusion at this stage. But yeah, it will have an impact on future revenue streams there's no doubt about that. That's why the board it focused on making sure we deliver value because it's not about the price it's about the value proposition. You can have a low membership fee and deliver nothing - that's still expensive. Some people still say it's too expensive so the big task for us is to demonstrate real value in whatever that price will be therefore people won't question it."
Another issue also broached by brokers is the inclusion of lenders into the association. When lenders cut commissions in 2008, many loan writers questioned why the MFAA didn't battle on their behalf.
But Sirianni says it simply wasn't the association's place to do so.
"The MFAA is not a union. It doesn't get involved in commercial arrangements with members. That's a competitive situation that you have to allow for."
But part of the body's strategic review is defining its membership base.
"So there's some work being done at the moment around who are members are. And I think members can represent a broader range of interested parties and that consists of lenders, valuers, a whole host of different members. But then the question is who do we represent and we represent intermediaries and loan writers. So you mustn't cloud membership and representation as one thing.
"We want everyone in the lending chain to belong to an association. But what we represent are the interest interests of our credit advisers."
There are obvious advantages to bringing lenders to the same table as brokers, he says.
"My view is without the lenders we haven't got a key role to play - they are key stakeholders in the business and I would much prefer key stakeholders actively participating in the improvement of the industry ... it encourages greater commitment and it creates greater cohesiveness between all parties. I would be very disappointed to see two different associations representing two different interests because all it does is create combative elements. One of the best things about our industry is the mix of all members."
Peter White, president, FBAA
The FBAA's motto is that it's an association run by brokers, for brokers.
Peter White, the managing director of Avanti Commercial, has been involved with the association since 2003 - starting as NSW state president and advancing to the national executive. While his two-year term as national president was up in 2009, his renomination was confirmed at the association's AGM
"I got involved in this because I wanted to give back to an industry that I take from. And I felt I had something to contribute. There were things that I didn't necessarily agree with and being an industry practitioner it was things that were affecting me. So if I was saying 'hey why are we doing this?, or shouldn't we be doing that?', I wanted to do something about it. And that drive, that motivation has just gotten stronger.
"I've been 30 years in this game. You see things you don't agree with and I'm not one to sit back and say, well you should do this or you should do that. I got off my butt and I'm trying to do it."
While White says there are some wonderful people in the industry who donate their time, he acknowledges that there's an equally proportionate number of people who want to sit back and criticize.
"We went through a whole pile of this earlier this year where people were saying industry associations should do this that or the other and that's fine, why don't you lend a hand? We can only do so much. We're all volunteers. If you've got a point to prove - great, come give us a hand. It's easy to sit back and criticize."
Like Sirianni, White says the pending legislation will present the biggest change to the industry.
"The NCCP bill is going to bring a different rationalization to the market that we haven't seen before. So 2010 has a fairly significant level of unpredictability about it, as to whether the majority will go for their license or whether they'll sit on somebody else's license. Will it shake a lot of people out of the market, or will the small player want to comply and absorb the cost. Is it going to be too hard? It's "going to be a year of questions, but within that there's some well-defined initiatives being undertaken.
Unlike the MFAA, White says the FBAA's model and membership make-up will make it less prone to any drop in broker numbers.
"We don't see it as having any great impact at all. We're conscious of it, and through the whole GFC period we've only seen a 2.5% decline in numbers. The beauty of the FBAA is we have a mature membership of brokers so we don't have the young gun who might be here today and gone tomorrow. Therefore it won't have that big of an impact on our membership. Obviously as licensing comes into play the dynamic might change a bit, but because of the structure we have, we might even see an increase."
The FBAA has always had more of a corporate structure, reflective of its members - many of whom focus on plant and equipment commercial loans.
"So our dynamic is a little bit different, we might even be fortunate enough to see an increase in members," White says.
While legislation changes have prompted many brokers to ask what their association can do for them - White believes he has an answer.
"The FBAA are in front of that with our co-op as we go forward into 2010 - it's an enormous initiative for this industry. No one else has done it and it's all been driven by what the industry says it wants."
The co-op is a service house whereby brokers can find answers to various business needs. For instance, it will provide an access portal for brokers who need different arrangements with aggregators or mortgage managers for specific clients and products. It will also give brokers fleet discounts on new vehicles.
"All brokers drive motor vehicles of some sort and they've got to pay insurances, so there will be insurance discounts, they've got to put fuel in the car, so there will be fuel discounts. Then you've got telco discounts. There's a whole range of value added benefits - financial planning, accounting platforms. It creates a central portal for brokers in the industry who say, 'gee I need that'."
White says the FBAA has been working on the co-op concept for years and it's not an attempt to justify the association's value given the new licensing and regulation powers being taken over by ASIC.
"It's not out of the blue. There's a simple reality that this is partly a response to the needs of our members, from listening to the needs of the marketplace and it's all just coming to fruition now."