While commercial finance broker market share is continuing to grow, as documented in the inaugural Aggregator Benchmark Report just released from the Commercial & Asset Finance Brokers Association of Australia (CAFBA), the group is becoming increasingly vocal about the need for further professional education to sustain the trajectory of growth.
The report is the first data set available for commercial finance aggregation and will serve as a barometer of sector scale and market sentiment moving forward; a total of 11 aggregators participated in CAFBA’s research, representing 11,490 individual commercial brokers and around 300,000 individual finance deals.
The data showed that, as of February 2020, 72.9% of new commercial asset finance transactions were being settled through commercial brokers – up from 67% in 2017.
While the figures confirm the value delivered by commercial brokers, CAFBA president David Gandolfo believes the industry “urgently needs to address issues surrounding professional education and regulation” as more residential mortgage brokers seek to diversify into commercial finance.
“The commercial finance sector is largely self-regulated, and it is critical that the industry acts to maintain its professionalism,” said Gandolfo.
CAFBA has predicted the trend of resi brokers transitioning into the commercial sector will continue to grow, particularly in the current COVID-19 climate.
“We welcome new entrants into commercial broking, however it’s vital that they learn these skills to contribute effectively and operate in the profession of commercial finance,” said Gandolfo.
“Through the Institute of Strategic Management, we have developed specific courses to assist the pathway into commercial broking, the Certificate IV in Financial Services: Specialising in Commercial & Asset Finance and the more advanced Diploma in Financial Services: Complex Issues in Commercial Lending.
“By obtaining these qualifications, you can successfully equip the resi broker to operate in the commercial finance space.”
However, CAFBA has highlighted that only 64% of aggregators have minimum educational requirements to on-board brokers, instead relying on years within the business, industry references and peak body membership.
As such, in addition to its own efforts, the association has called on aggregators to step up and do more to help “uphold industry standards” through supporting minimum education requirements and more actively investing in training to assist residential brokers in transitioning into the commercial space.