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Many new brokers choosing FBAA over MFAA due to 'unreasonable' education requirements

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Australian Broker | 18 Jul 2013, 08:00 AM Agree 0
Some new brokers are choosing to join the FBAA rather than the MFAA, saying being forced to undertake the Diploma right from the start is 'unreasonable'
  • CA | 18 Jul 2013, 09:30 AM Agree 0
    If you can't do a diploma you shouldn't be sitting in front of a client discussing their finances. It is not that hard. It's about raising the bar with the level of advice and this benefits the industry as a whole and raises professionalism and the public's view of what we do. Its not about just brokering a home loan, hence the move to the term Credit Adviser.
  • Billy Bob Blogger | 18 Jul 2013, 09:39 AM Agree 0
    i was a member of the MFAA for many years i got my nose out of joint when they decided to change the date for the completion of the Diploma. i like many others did the course and obtained my Diploma, well before the ORIGINAL deadline. then hey presto it was no longer written in blood. i felt that the MFAA no longer had my best interest at heart so i left.
  • Phil in Finance | 18 Jul 2013, 09:55 AM Agree 0
    It won't be too long before the public understands that an MFAA Credit Adviser/Broker has a higher minimum standard of education than a generic broker.

    The accounting profession has had a well known separation of education standards for many years with the Chartered, CPA and the somewhat lesser grade of public accountants.
  • paul kavadas Universal Finance | 18 Jul 2013, 09:56 AM Agree 0
    It is disappointing to see that ignorant s in finance want to enter the field.MFAA and FBAA should insist on their education but also should distinct the people who have commercial finance experience with the consultants who only have consumer finance knowledge.This will avoid the public being mislead all the time.
  • Malcolm Bartley | 18 Jul 2013, 09:58 AM Agree 0
    I know they call it a Doctors "Practice" but I for one like to see his or her certificates of accomplishment hanging on the wall before I let them loose with a knife!!!
    Same principle really!!!
  • Paul Eldridge - CEO, Intellitrain | 18 Jul 2013, 10:00 AM Agree 0
    I agree with the Debra and Aaron. In any industry bar this, the standard time frames are that a Diploma usually takes around 6 - 12 months to complete and a Certificate IV usually takes 3 - 6 months.

    Unfortunately what has happened, is that too many RTOs are willing to cater to the lowest common denominator and deliver 'crash courses'. One group delivers a Diploma in 3 weeks. This is farcical. A person off the street in week one is learning what an off-set loan is and in week three is covering complex lending scenarios.

    As Debra has said, there is a lot to learn for new entrants. Think of all the legislation that a new person needs to understand - it takes weeks just to get your head around that. Let alone understand the various products, the lending process, how to conduct and interview with a client, how to properly submit a deal, lender policies, etc etc.

    Those groups who are taking new entrants know that it takes about 6 - 9 months for a new person to start getting into the swing of how to be a mortgage broker.

    There is absolutely no reason why anyone needs to get a Diploma in 3 weeks prior to joining the MFAA. As Phil has pointed out, they give new entrants 12 months AFTER joining to get the Diploma. The MFAA recognise that a Cert IV is perfectly adequate for new entrants.

    Any RTO or group pushing people to do a Diploma in a few weeks in order to gain MFAA membership is simply serving themselves, they not looking at what is in the best interests of the new starter.
  • Clinton Waters | 18 Jul 2013, 10:00 AM Agree 0
    We have a new trainee completing his diploma right now and while its quite drawn out and somewhat expensive I feel he is gaining knowledge thats helping his on the job training gel a lot more.

    New market entrants have a tough time but I do agree some parts of the educational on-boarding can be a little onerous. Im sure it will continue to be tweaked by changes through NCCP, MFAA, aggregators and business owners alike. I can certainly see education's long term value though.
  • Shawn | 18 Jul 2013, 10:00 AM Agree 0
    Good on the MFAA. You shouldn't be able to come from the construction industry and expect to be able to assist clients with what is more than likely the most important financial decision they will make. Brokers with a lack of qualifications or experience lower the professional standing of our industry and encourage customers to go to the Banks. If you don't know what you're doing then you shouldn't be able to deal with clients. When I go to a Financial Planner I know they are qualified, not decided to be a broker because he doesn't like the construction business. People becoming brokers that are clueless drag all of our reputations down.
  • Get It Done | 18 Jul 2013, 10:01 AM Agree 0
    How confident would you feel if you sat in front of a solicitor getting legal advice only to find out he or she wasn't fully qualified or experienced. No very confident I would think. So why would you expect your clients to accept lesser skills or qualification than what the industry expects from you. Lift your game and get the diploma and be professional.
  • M C | 18 Jul 2013, 10:03 AM Agree 0
    Although I'm a notorious 'fence sitter' (comes from being a Libran) I tend to agree with CA & not only from the view of professionalism but external legislation changes like FOFA. It virtually demands strong knowledge from day one. I know this raises the bar & can place barriers to entry in the industry, but if you are committed then you are fully committed. With deregulation of the labour market over the last 30 years, plus the need for people to consider a mixture of PAYG & self employed work to generate income, it requires an understanding of business operations at least at SME level. You need to be able to pinpoint trends in a business to determine possible risks ahead, which can then of course impact on a borrower's future ability to manage debt levels.
  • Ray C | 18 Jul 2013, 10:04 AM Agree 0
    The MFAA continues to operate above the Law instead of within the law. It should be prepared to back all Law abiding brokers and the Industry, not a selected few. Everyone's circumstances are different and should not be judged by those Brokers who have a diploma, which is time and money not necessarily well spent. Of course MFAA brokers want to limit competition in an already regulated industry.
  • Melb broker | 18 Jul 2013, 10:09 AM Agree 0
    Phil. The public don't even know who the MFAA are!
  • Steve McClure | 18 Jul 2013, 10:15 AM Agree 0
    Phil in Finance makes sense, except that there was a wide disparity between courses and trainers. The online course I undertook was very lengthy, but quoted some compliance matters incorrectly. I received no feedback or comments from trainer and the only qualification was "satisfactorily" completed. What substance does this give a diploma?
  • NoTimeLikeTheFuture | 18 Jul 2013, 10:19 AM Agree 0
    Its probably a cashflow thing.

    New businesses must be cautious with cash.

    If you can get in and try without the diploma then I probably would too.

    But to graduate to the MFAA it requires the Diploma and for me it was a good course.
  • Ray C | 18 Jul 2013, 10:33 AM Agree 0
    It's amazing how many brokers appear to assume ignorance, qualifications above legal requirements do not make a good Broker or good doctor. A fully qualified practitioner within ASIC requirements should be supported by the Industry body and not abused by those within the body believing they are better at their job. A qualified lawyer Can joint the Law Society and a Qualified Real Estate Agent can join the Real Estate Institute. A qualified Broker cannot join nor is supported by the MFAA - they are not a True Industry body.
  • Malcolm Bartley | 18 Jul 2013, 10:36 AM Agree 0
    I have read all the above comments and still reackon when I want a vasectomny I will go to my qualified doctor!!!
    He needs my patronage to pay back the huge HECS debt he incurred after living on a students income whilst studying for 6 years!!

    Or I could go around the corner and pay "cash" to a local self proclaimed "Witch doctor"!!."
  • Get It Done | 18 Jul 2013, 10:53 AM Agree 0
    I'm with you Malcom Bartley. When your balls are on the line you want to make sure your using someone that knows what they are doing. You dont want to wake up and realise he got it wrong and start singing in castrato.
  • Ray C | 18 Jul 2013, 11:33 AM Agree 0
    Practically that Doctor is a qualified Doctor and is allowed to be a Member of the Medical Association, a qualified Broker is not allowed to be a Member of the MFAA - they are not supporting the Industry. It is a supposed to be a Industry Body not a consumer body.
  • SteveL | 18 Jul 2013, 11:33 AM Agree 0
    Question is what are the motives of the MFAA on this over education? To lift the standard or give them a percieved "Unique Value proposition" to justify their existence? Does the additional education (Diploma) make one a better broker? No
  • Casey | 18 Jul 2013, 11:36 AM Agree 0
    The reality is, the paper means you've completed someones requirements to their standard. It does not give you a rubber stamp of competence.

    However I do agree we definitely need a graduated approach in recognition of competency levels. Accountants do this very well by distinguishing their various levels of competency. I also like the Financial Planning model where you need to complete specific courses or models in an area of advice.

    I believe the MFAA approach is flawed by rushing through the Diploma as minimum standard for all members. In the past I've worked with and had brokers work under me, who have extensive bank experience, hold a Diploma and in some instances a degree, and routinely completely substandard work.

    Then I have worked with colleagues who didn't have a traditional banking or formal educational background who excelled. They haven't excelled on a volume basis. This means nothing to me. They excelled with the sound credit assessment decisions they made before even submitting it to a lender.

    I left the MFAA and joined the FBAA. I am completing my Diploma - in my time. I'm 90 percent done. But I have a business to run and the Diploma is a luxury item that right now only impresses a few dozen people in the MFAA office and some in the wider broker community that are impressed by paper over demonstrated skill.
  • JP | 18 Jul 2013, 11:40 AM Agree 0
    I agree with CA, even if you are from another industry or cant be bothered doing the diploma when told to, you shouldn't be sitting infront of clients giving lending advice. MFAA now will probably attract a higher standard of broker, not ones trying to take short cuts or cant be bothered
  • BRIAN TAYLOR | 18 Jul 2013, 11:50 AM Agree 0
    MFAA motives?? Purely financial. I swopped even though I have my diploma.
  • Sluggo in Paradise | 18 Jul 2013, 12:19 PM Agree 0
    I'm with MFAA, I have no choice as its a condition of my franchisor.
    Whilst I have no problem with the diploma, I found it annoying not to get any credit for my other qualifications. I have 2 Degrees and a Master of Business. The diploma was basic at best and did bugger-all to improve me as a broker. Industry experience is far more important in improving broker skills.
    By the way is was easier to complete it than go through the time consuming process of RPL.
    If feel it would be more beneficial if MFAA had competency-based in-house certification/recognition of experience for membership categories rather than rubber-stamping the diploma as their membership ticket.
    The diploma criteria is more about differentiation and market positioning for the MFAA!
  • Aaron Russell-Smith | 19 Jul 2013, 01:26 AM Agree 0
    This is for CA because you have the abbreviation Dip and credit adviser on your business cards does that make you a better broker than someone who has 20 years experience holds a certIV and is with FBAA? The clients I have get a professional service and the right advice so they can make informed decision on how I have structured the finance. Your comments Shawn are based on what? Because I have no diploma and new to the industry I lower the professional standing maybe you open your eyes and jump onto the MFAA website look at the expelled and suspended profile these are the one's that bring down the industry most joe blows don't no who FBAA & MFAA are. FYI Shawn before you open your mouth and pass judgement the reason I'm not in the construction business any more is because I'm in a WHEELCHAIR from a work accident maybe you should go and read the Australian broker magazine where they did an article on me,brokers with a lack of qualification or experience lower the professional standing of the industry well you should have a look at the MFAA website check out the expelled and suspended members they re the ones that lower the standard. People becoming brokers that are clueless drag all of our reputations down well Shawn your responsible for your own reputation not joe blow or the broker next to you, you make your own reputation just as I have made mine.
  • ozboy | 19 Jul 2013, 12:13 PM Agree 0
    More members expelled from MFAA than FBAA so having a dip doesn't make you better.
  • Peter | 24 Jul 2013, 12:20 AM Agree 0
    Steve McClure, it would be interesting to know if you did your Diploma through one of the "preferred" training organisations.
  • SIDBROKER | 06 Aug 2013, 12:08 PM Agree 0
    A friend of mine retired from broking recently and sent an email advising he was giving up due to NCCP limitations etc. asking a few questions and since he was not renewing his membership, you guessed it did not receive a reply from FBAA. Wether its MFAA or FBAA its a money grab, end of story. We don`t need them we only carry them.
  • leo | 18 Aug 2013, 10:55 PM Agree 0
    MFAA and all here is big drama. If you Education/degree than they asked for experience and if experience than for education. If you got both, still you need reference. You got Degree from Uni of Syd who cares. Cert ii @ tafe. Funny Australia and still it is working? Look at any website for info, click for next link, even after 2 yr, click next link. if you send email, they send you a link or fil application with $400 fee then send you link again.
  • Michael | 01 Jul 2015, 05:27 PM Agree 0
    Qualifications are the measure in which we as a society grade knowledge and aptitude. Whether you agree or disagree is irrelevant as it has been proven time and time again. ‘You cannot become a doctor without going to medical school’ and soon on.

    However if this is case then compliance and experience should not matter as completing our training should be evidence enough of our competence in the field. It is ridiculous to think that you have to complete your diploma and then go and complete the compliance pack which is nothing more than a castrated version of the diploma course. It’s double handling information in the name of profit.

    Having to complete compliance packs are simply a waste of time as the information has already been assessed when completing the cert IV or diploma. If the laws were to change one would expect that the required CPD hours would be sufficient to stay current with these changes.

    It’s all about money. The MFAA would have had substantial number of members who only held cert IV's by appointing 'preferred training organizations' prior to making it mandatory to have a diploma would yield extreme returns. The MFAA would not let another organisation use their logos and etc without some sort of financial remuneration – it represents a liability and the average business model dictates that all liabilities must yield a return greater than the perceived risk to be actioned.
    Furthermore it forces a restructure in membership. This is usually done by an organisation to take attention away from unwarranted addition fees or increases in existing ones. It also forces a lot of admin work, which is generally a very high profit area.

    This is simply a case of ‘you scratch my back, I’ll scratch yours’.
  • Jason | 02 Jul 2015, 01:36 PM Agree 0
    Paul, You are very keen to point the finger at your competition, but how many of your competitors offered incentives to their students in order to enroll in courses? And how much did you earn from the MFAA to be on their preferred panel? Point the finger, but remember three will point back at you. The truth is, the Diploma is a cash cow for the MFAA and you have benefited from that decision.
  • kate | 18 Sep 2018, 01:37 PM Agree 0
    Great article. It matches to my situation. A year ago I came to Perth, from Poland with 9 years of broking experience on the Polish market. I realised that I have to have qualifications here - Diploma...I didn't have time to think is it possible without knowing English( just base). I start in November 2017 IV CERT in Mortgage broking and pass, and then strait Diploma and pass for the first time. Although I was writing my Assignments and learning English pronunciation I had banking and broking knowledge from Poland. I want to thank MFAA put attention on broking qualifications and competence. We are ADVISORS - and that's should sound not only good enough, but It should also sound powerful and reliable and I already find out that some Ozzies brokers are struggle with it. Let's just treat this diploma as our VIP Gold Advisors business card. In Couple of days I will get my membership here( finally ;-) ) - and it will be my great achievement DOWN UNDER. And for those who are don't agree with MFAA requirements- "good on ya Mates"- The whole world to do others staff than advising. If Polish, blonde girl could pass- you can pass too!
  • Andrew F | 22 Jan 2019, 09:39 AM Agree 0
    The MFAA continue to bleed brokers. An award winning broker recently commented, "all the elected members of the MFAA board are women, their lack of focus on the brokers has come true in the royal commission". There should have been no need for a Royal Commission had ASIC and APRA done their job and there should have been no need for a CIF had the MFAA stayed true and delivered on what it promised. Since 2011 Finance Brokers have been required to have a licence, Australian Credit Licence. In the last 8yrs, there should have been no need for brokers to be compelled to be part of an Association that has done little to improve the circumstances of brokers. Brokers who move to the FBAA, do it for the high costs demanded by MFAA recommended Mentors (over $12,000), who do little to help the broker grow their business. We continue to see the domination of these organisations by the Big Banks they were supposed to protect against. One would pray that the Royal Commission bans all these self interested intermediaries and cleans up the finance options for consumers once and for all.
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