Brokers are backing the MFAA's calls for the government to simplify disclosure documentation regulations. We speak to VICKI GREY of Gadens Lawyers and KELLIE LAM of Abacus Home Loans for their thoughts on how to improve the system.
Video transcript below:
Donna Sawyer, Broker News TV
Donna Sawyer: Brokers are backing their industry body’s calls for the government to simplify regulations regarding disclosure documentation. The MFAA says the requirement should be changed as compliance is unnecessarily costly and inconvenient. Vicki Grey of Gadens Lawyers has same concerns.
Vicki Grey, Gadens Lawyers
Vicki Grey: I think the disclosure documentation regulations are very complex and unnecessarily complex. Certainly I think the MFAA would support clear disclosure to consumers. The problem that we have at the moment is that there is so much disclosure to consumers and when you have a lot of disclosure, you find that consumers turn off.
Donna Sawyer: Kellie Lam of Abacus Home Loans says the disclosure requirements are so time consuming she has had to turn away new business to comply.
Kellie Lam, Abacus Home Loans
Kellie Lam: The time frame we are involved especially between our staff as well as myself, the time frame we are trained and work on the client is dramatic cost wise. It’s actually, our business actually did drop because of the process. Because we could not take more clients in, we have to reject clients. We actually are part of 1300 Home Lone banner and when they give us lease we won’t be able to look after them all, that’s the problem we are facing at the moment.
Donna Sawyer: She says compliance has been costly for brokers, especially those in smaller businesses.
Kellie Lam: Particular small business they cannot bring in large group of people to do the whole thing, but they just have to spare much more time on it. I think time and the moneywise like it’s a big issue for them and we do have small business broker, we sometimes talk together and that is the same problem we are all facing it.
Donna Sawyer: So is there a better way? Vicki Grey of Gadens Lawyers says she hopes law makers will consider simplifying disclosure documentation regulations.
Vicki Grey: I think one sort of document arrangement is much simpler for consumers to understand and have all of the information that they require upfront and certainly less costly from a compliance perspective, for the brokers out there that need to make sure that they are always complying at all times with the legislation. There is another thing that I think should be considered at the moment and this is something that is becoming more and more of an issue for our clients. These days there is becoming more of an issue between a crossover between mortgage brokers and financial planners. Now what’s happening is mortgage brokers are saying that they could provide much more of a one stop shop by getting financial planning qualifications and financial planners are thinking that they would like to be able to get in on the action of arranging loans as well.
So often we are finding in the bigger organisations the need for these people that already hold financial planning qualifications to obtain mortgage broking qualifications and vice versa. Now the disclosure arrangements between the Corporations Act and the NCCP are similar but not the same and so there is another level of cost. And I was in fact speaking with one of our clients in great depth last week about the arrangements that this particular organisation was going to, to try and make sure that their people that had dual qualifications, could comply with both the Corporations Act disclosure requirements and the NCCP disclosure requirements. So, I think it would be really nice if we could move those two closer together.
Donna Sawyer: This is Donna Sawyer reporting for Broker News T.V.