The MFAA and FBAA have each issued responses to an article posted on the website of consumer group Choice earlier this week, which blasted the mortgage broking industry as a whole, firing off a series of serious allegations regarding the standard of broker education and accreditation.
The Choice piece claimed that the “bar is set low” for becoming a certified mortgage broker, and implied the Certificate IV in Finance and Mortgage Broking is the only requirement needed to enter the industry. Further, it claimed the course is not only "exceedingly simple", but actively promotes growing sales over doing what is best for the customer.
MFAA CEO Mike Felton expressed disappointment over the misleading nature of the release, especially as it follows years of reviews by ASIC, the productivity commission, the Sedgwick Report, and the Hayne Royal Commission, “which found no evidence of systemic harm to consumers resulting from mortgage brokers’ activities.”
The association head reminded that brokers require accreditation by both their aggregator and individual lenders before being permitted to recommend their products. Further, every MFAA member is required to obtain a diploma and two years of mentoring, as well as 30 hours of Continuing Professional Development (CBD) each year.
Additionally, over 96% of customers report they are satisfied with their brokers’ performance. Further, in the first six months of the Australian Financial Complaints Authority (AFCA)’s operation, mortgage brokers accounted for just 107 of the 35,263 complaints – 0.3% – even with having written 60% of all mortgages.
“If consumers were unhappy with their brokers, it would show up in our satisfaction surveys, or in complaints data,” said Felton.
“Given this data, it seems to me that perhaps Choice’s publicity efforts would be better directed elsewhere in the financial services industry.”
The FBAA expressed similar sentiments, saying the attack should not only be “dismissed outright,” but that it reveals the group’s “disturbing lack of real understanding about the broking sector.”
“This myth being peddled by Choice and a few others at the recent royal commission that a short online course can qualify someone to be a finance broker is completely false,” said FBAA managing director, Peter White.
White stressed that learning on the job – under the guidance of a mentor – is an important part of development, with the FBAA requiring a minimum of 25 CPD hours per year for its members, also higher than the 20 hour benchmark set by ASIC.
“Choice provides a valuable service for consumers in reviewing vacuum cleaners and washing machines, and they need to stick to what they know,” he concluded.