Shock audit charges could push brokers to flee aggregator

by Miklos Bolza10 Feb 2017
Vow Financial has announced an extended compliance policy that includes charging brokers for annual auditing and review, according to a source close to Australian Broker who wishes to remain anonymous.

In an email sent last week, he explained that the aggregator will force him to spend up to $1,500 on an annual compliance audit.

The aggregator's broker notice says that audits will be compulsory for those working under their own Australian credit licence (ACL) or the ACL of an external agency. Brokers already operating under the Vow licence will not be affected.

“I already do my own auditing and, as I’ve got my own ACL, I reckon I might have to change aggregators if this is their attitude,” the source said.
According to the broker note, brokers will need to conduct either a face-to-face or remote desktop audit. The desktop audit will be carried out through Symmetry or other systems used by brokers that allow for remote access.
Face-to-face audits will be offered where remote access is unavailable or via a risk-based approach. Factors relevant to this risk assessment are guidance from funding providers, complaints, failed desktop audits, feedback from Vow state managers, and the type and/or volume of lending activity involved.
Vow has said fees will work under a user-based model, charging $1,499 for a face-to-face audit and $499 for a desktop audit. These will be conducted by compliance consultancy Accordance Services within the next 12 months and then again on an annual basis.
“The number of brokers attracted to Vow continues to grow and feedback indicates that brokers wish to be supported in their business approach and to join a professional and collegiate organisation,” Vow’s broker note said.
“To continue in our support role we are enlarging our assistance to those brokers operating under credit licences other than the Vow credit licence. This is occurring because funders are being pressured by recent regulation changes, requesting further details from Vow Financial about our network’s activities.”
All affected brokers will be contacted by Accordance Services to organise suitable arrangements and supply a written report which should be reviewed and acted upon.
Brokers completing this audit process will also have access to a professional indemnity policy negotiated between Yellow Brick Road and Vow.
“Vow’s success is built on our broker partner’s success. This initiative has been developed to ensure that your business is operating correctly and to improve quality across the network,” the note said.
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