Parliament told broker education is ‘manifestly inadequate’

The group’s submission said that it “regularly" receives calls from consumers who are in financial difficulty due to acting on bad advice from their broker.

“We submit that the current qualifications required of brokers are manifestly inadequate,” the submission said.

“We believe that rendering it compulsory for [brokers] to attain relevant university qualifications and training in ethics will increase the general standard of skill in the industry, and reduce the risk that [brokers] act in self-interest only, rather than in the best interests of the consumer.”

MFAA chief executive Phil Naylor said it was wrong to describe broking qualifications as inadequate.

“The qualification the MFAA requires, which is the diploma, is the highest available qualification there is in Australia,” he told The Adviser.

“As to a requirement to do a university qualification – there isn’t a university qualification. What are they going to do – medicine or engineering?”

Mr Naylor said although a broking diploma can’t teach newcomers everything they need to know, the same applies to a university degree.

“A university degree in any discipline doesn’t indicate that you’re fully experienced. It indicates that you’ve acquired the basic education standard,” he said.

“That’s what our members have – they have the basic education standard we believe is appropriate, and which is available, to start them off in a career in broking.”

Sarah Wells from Rate Detective Finance said she was ambivalent about whether universities should introduce specific courses for mortgage broking.

“I think it may be something that happens down the track, but I don’t think it is something that is required, because a lot of the finance subjects are easily transferrable to mortgage broking,” she said.

“I don’t know if having a university degree makes you a better mortgage broker or business person, but do I believe it helps.”

The Adviser approached Australia’s leading eight universities to ask if they had considered introducing mortgage broking courses.

Monash University said it had no plans to teach broking, but added that that might one day change if it felt there was demand from regulators and industry associations.

University of Sydney and University of Western Australia said they had no plans to teach broking.

Five universities declined to comment or didn’t respond: ANU, University of Adelaide, University of Melbourne, University of NSW and University of Queensland.

[Related: Seven reasons young talent should join the industry]

The issue of broker training and recruitment will be explored in greater detail in next month's issue of The Adviser magazine