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Association warns of rise in unqualified brokers

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Australian Broker | 30 Jun 2015, 08:35 AM Agree 0
The FBAA has raised concerns about the number of people entering the industry who are not trained as mortgage and finance brokers
  • Sylvia | 30 Jun 2015, 09:20 AM Agree 0
    Is Peter White suggesting that a degree qualified financially training accountant needs a lower grade qualification to be a broker?? Please when RAMS is proud of turning a florist into a broker. I know who I'd rather use. It's sour grapes that they may not be FBAA members. ASIC doesn't require FBAA or NTAA membership to determine a brokers competence. The so called unqualified brokers White refers to would be part of an aggregator and would be getting their 20 hours CPD as well as 20 hours of CPD as a professional. Is White suggesting ASIC is incompetently issuing licenses??
  • Michael Kent | 30 Jun 2015, 12:28 PM Agree 0
    I agree with Sylvia. Absolute sour grapes.

    I have been a member of both the MFAA and FBAA and brokers get absolutely NOTHING for their $400 a year membership.

    I see Peter White pop up at events now and then. He will bang on about how he is going in to bat for us poor mistreated brokers but it's just a way of justifying the yearly dues we have to pay.

    What exactly do they do? Do they improve my commissions? NO, make it any easier to get my clients approved? NO, provide any kind of worthwhile effective marketing material? NO, provide me with any free leads? NO.

    His fear is that in the future people won't need to belong to an FBAA or MFAA which quite frankly is just a cash cow milking brokers dry.
  • Antbroker | 30 Jun 2015, 01:28 PM Agree 0
    I agree with Peter White. To be part of the professional Broker Industry you need to be a Licensed Broker, that is the rule, like it or not! Clients deserve recourse for shoddy work whether delivered by an experienced broker or a newby, and that is what your License gives. Why should their be short-cuts as suggested by Sylvia and Michael just because you think you can be a jack of all financial trades.
  • Sylvia | 01 Jul 2015, 01:17 PM Agree 0
    Antbroker. I think you must be confused. ASIC is the legal licensing authority not MFAA nor the FBAA. Their support of minimum Cert IV in my opinon is not enough nor is the PD they peddle. Point of Sale needs addressing, especially in the car and plant equipment finance space, but financiers in this space are curbing unqualified rogues. What you may not know Antbroker is that CPA Australia is getting an AFSL license and will be accrediting CPA members with licensing to engage in mortgage broking. FBAA and MFAA are worried I am sure as these members who hold Bachelor Degrees and post graduate qualifications as CPA's are highly skilled and trained, they will be running rings around Cert IV training brokers. I also doubt CPA members will have to be MFAA or FBAA registered to practise. But hey perhaps licensing should be awarded based on the degree of complexity in lending. With all due repsect, I doubt a Cert IV trained truck driver who can now write a loan can read let alone understand a set of Trust financials.
  • Disruptive Desmond | 01 Jul 2015, 05:19 PM Agree 0
    Seems that Peter White is throwing the toys out of the cot because brokers don't have 100% of the market to themselves.

    Seriously, there's legislation in place to govern what people can and cannot do with respect to credit activities. Does Peter White believe that a simple Cert 4 qualification makes someone more capable than a degree qualified accountant who completed 3-4 years of tertiary studies. Maybe the Cert4 qualified broker is in a better position to discuss an SMSF lending solution than the accountant or planner who oversees the clients overall SMSF strategy? If brokers think they are more qualified to provide credit advice than a trusted adviser such as an accountant or financial planner is then the FBAA and perhaps many of the brokers they supposedly represent are asleep at the wheel. It's fairly simple Peter White, and I'll try to explain ....

    Accountants and Planners have two options when it comes to credit. They can either obtain an ACL (or rep status) which allows them to undertake a credit activity - and let's be honest here, as a trusted adviser they are in a damn strong position to do so. If they want to identify an opportunity to assist in directing the clients credit needs to a licensed person, they are also able to do so under ASIC's "mere referral exemption", and in doing so could still receive a fee making a referral. This would normally be in the form of a referral commission paid to them by a lender.

    If brokers (and the industry bodies representing them) think that mortgage brokers themselves provide the only genuine mortgage solution in the third party space then they should think again. Recent announcements by the CPA and the many other industry / member bodies making a move away from partnering with traditional brokers solutions support the fact that mortgage broking is no longer the only game in town.

    Yes mortgage broking has built a strong position of dominance in the mortgage industry but even 50% market share leaves half the market still looking for a preferred solution. Will brokers continue to grow their market share or will other professional segments take control of owning the clients broader financial needs - those with perhaps a stronger level of client ownership than a broker would ever dream of having?

    Time will tell, but people like Peter White should consider how they help the industry evolve on behalf of their members rather than throwing the toys out of the cot because the market dare moves to suggest that mortgage broking is not the only solution available.

    Maybe complacency is an issue here - maybe it's an industry that in many respects hasn't evolved to any great extent over a 20 year period.
  • Michael Kent | 02 Jul 2015, 11:11 AM Agree 0
    Antbroker (didn't know ants could get loans??)

    Where did I say there should be short cuts? I agree it is paramount people have their cert4 and experience to write loans what I am saying is I don't think membership to the MFAA or FBAA should be compulsory.
  • Reality check | 02 Jul 2015, 12:52 PM Agree 0
    Peter is not concerned with the qualification of the licensed operator. ASIC approves licences. Therefore anyone who is providing credit assistance (legally) IS qualified. The problem Peter is trying to overcome is that only brokers are required to be members of an association and unless they can increase their numbers, and maintain control over a high percentage of operators, the Associations will lose their power.
    Peter is not as concerned with the broker division as he is with his own association's power over them.
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