breaking news

Compliance burden drives shift to credit rep

2733 people have read this article
Friday, 25 November 2011

Jessica Darnbrough

The industry is expected to see a large reduction in the number of brokers holding their own licences.

Speaking to The Adviser, Advantedge's general manager of broker platforms Steve Weston said while some brokers had initially thought it was a good idea to hold their own licence, the regular and consistent compliance requirements under NCCP had become too taxing.

As such, Mr Weston said he would not be surprised to see a large reduction in the number of ACL holders, as brokers look to take on the role of credit representative in the New Year.

Brokers who sought their own Australian Credit Licence at the end of last year will soon be forced to renew their licences.

"It will be interesting to see how many brokers will not renew their licence," Mr Weston said.

"Under NCCP, brokers with a licence are required to complete an annual compliance certificate, which is a reasonable amount of work. They also need to renew the PI cover, which again is a reasonable amount of work.

"Will that be sufficient to see brokers leave the industry at the same speed as what we saw during the registration process in 2010 – probably not. But, will it be enough to cause some brokers to look at becoming a credit rep – absolutely."

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Comments  

 
+1 #9 Robert Kaya 2011-11-26 11:15
Aggregators encourage the brokers to be under their banners due to the fact that there is a potential revenue they are making from the ACRs. Moreover, they try to stop the leakage of businesses outside their panel of lenders. Some Compliance Officers can be very arrogant and deliberately make the small issues sound big ones! ASIC wouldn't tell anything different than what 'a well paid' compliance wo/man would suggest to do, should it become necessary! NAB owns 40% of the Aggregators in the country and hence it was by no means a surprise for me to hear Mr.Weston's speculations who vehemently appears to object the concept of ACL holders!
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+1 #8 Think about it 2011-11-25 20:16
Interesting that Steve represents a License holder and is trumping up the value of Credit Rep. Sounds suspiciously like a "cash grab", or sheer arrogance. A credit rep basically works for someone else but without the benefits of an employee. A Licensee works autonomously and gets to build a business.
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+3 #7 dave 2011-11-25 11:43
Mr Weston continues on this track as it suits Advantedge. We all have to have PI and the renewal took about 10 minutes on line which a credit rep would have to do anyway. Wait til you want to change aggregators and hence move your credit rep license, see how much of a hassle it is then. If I was to take a pessimistic view I might say this is a handcuff clause in stealth. While I understand employee's across all sectors have certain "messages" they need to push hopefully not at the expense of their otherwise good standing.
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+4 #6 Advant-edge the Grim 2011-11-25 11:32
As a broker with a supportive aggregator (AFG), I can say they understand and reinforce that it is our business not theirs. The compliance is easier as a one man band and now part of every day operations. We adopt and adapt. In WA PLAN preached doom and gloom, then tried to get all small brokers to be CRs under them or suggested that they join one of their larger brokerage groups (at further reduced commission splits). We need to be in control our own destiny. Not that long ago an aggregator was a channeling house and we as brokers were promoted at the forefront but the tables have turned somewhat (more so under Advantedge) where we are losing our identity and letting aggregators become our masters. If you wish to control your business and want a real advantage then shop the aggregator. I did and the grass is really greener on the other side. Scare tactics is NO SUPPORT!
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+4 #5 Dean Tahana 2011-11-25 11:00
I'm just amused by how contrast the feedback is to the original article posted, social media interaction really does prove to outweigh media propaganda.

Anyway I concur with the comments above. ACL holders do have more control of their business & like anything we approach, all new processes or changes have that transitional period. It's just a matter of adopting it...!!!
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+2 #4 JB 2011-11-25 09:31
Its not that bad I have just renewed my licence took about 30 to 40 mins with interruptions.
PI cover is a requirement anyway
JB
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+2 #3 brokerboy 2011-11-25 09:24
Me Thinks this is a beat up ! I think the more control you have over your business the better...holding an ACL and renewing is no drama, compared to credit rep...I think aggregators would like to keep al their cows in the one paddock.
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+2 #2 Paul 2011-11-25 09:20
I’ve already renewed my licence and it took a few minutes work.

I know a number of credit reps and it appears to cost more to be a credit rep and they have no reduction in compliance time. In fact I think with the compliance officers harassing them I’d say they spend more time with NCCP compliance (plus compliance officers soft audits). Plus they lose some flexibility in running their business and the processes they use to comply with NCCP.
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+2 #1 Tony 2011-11-25 09:08
I would never become an a Credit Rep under someone else's licence. I would not allow anyone from an aggregator tell me how to run my business. The compliance is not a big issue for ACL holders.
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