Asset or liability?

Under current rules, brokers with fewer than two years’ experience have 12 months to complete the diploma program as part of their compulsory two-year mentoring program.

According to MFAA membership figures, it’s estimated that around 20 per cent of new brokers entering the industry leave within two years.

This has led Navigator Home Loans’ managing partner, Michael Platt, to conclude that the requirement to complete the diploma is just another barrier preventing new recruits from joining the profession.

“Most new entrants are placed in commission-only arrangements when they begin, so imagine saying to them on top of that, ‘You won’t get any money for six months and you’ll have to do a diploma before you can do interviews’.”

Mr Platt believes a Certificate IV would be sufficient for new recruits since it covers customer needs analysis, a recommendation and how to follow an application through to settlement.

With a blanket diploma requirement, Mr Platt adds, there is also considerable risk for businesses in that they may invest heavily in new recruits only to have them leave shortly after.

“If the diploma is the highest and only educational standard required to launch a broking business then it’s too easy for brokers to go out on their own,” he says.

“If you’ve developed a good loan writer who has a Certificate IV, they may stay in your company longer if they’re not prepared to do the additional educational requirements to have their own business.”

MAKING THE GRADE

MFAA president Phil Naylor says the fact that 90 per cent of the association’s 12,000 members have completed the diploma is ample evidence that the educational requirements are reasonable.

“MFAA members have told us they want to be seen as part of a respected profession and they want to hold higher standards than those mandated by law,” Mr Naylor says.

Loan Market’s Mark De Martino applauds the MFAA’s requirement. However, he feels the 12-month deadline prevents new recruits from gaining the maximum benefit from obtaining the qualification.

“A new broker is more likely to ‘learn and retain’ the diploma [content] when they’ve been in the industry for a significant amount of time and haven’t just been taught,” says Mr De Martino, adding that a ‘Certificate IV broker’ can still provide exceptional service.

Smartline’s Joe Sirianni is passionately in favour of all brokers meeting this requirement, regardless of their time in the industry. If clients know their broker needs to meet this standard to operate, then it can only add to their service proposition, Mr Sirianni believes.

“Customers want to know they are dealing with professionals who invest in themselves and keep up to date,” he says.

EDUCATING THE FUTURE

With many of the new recruits now entering the industry armed with a university degree, there is speculation this could be the way of the future.

And while the MFAA has not yet set any requirements at degree level, the association does plan to launch a new membership category in mid-2013.

While components of the Certified Credit Adviser (CCA) category are still being finalised, once available it will only be granted to existing members with at least five years’ loan writing experience, and who currently hold a FNS50504 /FNS50311 diploma and have completed an “MFAA certification process”.

A CPD requirement for each annual membership period applies to the Certified Credit Adviser category.