Several leading members of the broking industry have revealed what they think the industry member associations should be doing, and what areas they need to improve in.
Speaking to The Adviser, several brokers suggested that the associations should be less active in terms of political lobbying, but more active in representing the broker industry, improving the industry’s reputation and protecting livelihoods.
Mark Stevenson, managing director of Bell Partners, told The Adviser: “An industry body that sees its primary role as a political lobbyist is out of touch with what we need and want as brokers. They need to be looking globally, understanding the technology and platforms currently available and in development, then share those findings with members. They should take the lead on developing technology in the broker space to ensure greater services and benefits to consumers.
“In 2016, an industry association must lead the way with finance broking for the digital age. Their most important role is enabling brokers to engage and adopt best technologies and practises, ensuring we remain relevant today and into the future as we see greater technological integration in customers' lives.”
Joe Mennea, CEO at Financial Consulting Australia, agreed that associations need not be lobbyists, saying: “They do take on a quasi-regulatory persona, which I think is totally wrong.
“Yes, they should be working to make the regulators understand the issues that we're confronted with from a broking point of view and also from a client perspective. But a lot of those issues come from the lenders.”
Conflict of interest
Mr Mennea told The Adviser that he believed the associations could be suffering from a slight conflict of interest, which makes them less likely to come out hard against lenders.
He explained: “When CBA said they wanted to reduce commissions, the MFAA said: 'Yeah, that's fair enough. We understand.' And I thought: 'That’s not fair enough! What's going on there?' And that’s when I discovered they are actually getting paid substantial sponsorships from the lenders. So, I think there is a bit of a conflict there. Because, if you are in the association and I am paying you to fight for my cause (more often than not against the lender), then where is your loyalty if the lender is paying you $200,000 a year — against my measly $600? How can I expect you to fight in my corner against them, when they're paying you the bulk of your money? So, there's that conflict.
“These are the sorts of issues that are confronting these associations at the moment. They struggle to provide a real value to broker businesses but they are a necessary evil because you do need a lobby group and you do need a voice.”
Alex Filipovic, franchise owner of Nectar Mortgages, agreed that there was some conflict, saying: “I believe an industry member association needs to clarify who they represent, i.e. brokers or lenders. It is also vital that the association is proactive in correcting some of the misinformation being bandied about by the press.
“The industry is now getting to the stage where the partnership between brokers and some lenders may become strained due to online approval technology. For that reason, I can’t see how a member association can fairly represent both parties.”
Other brokers have voiced their wish for more consumer-facing promotion. Brisbane-based broker George Samios, who was crowned The Adviser’s Young Broker of the Year on Friday, said there is much more industry bodies could be doing for their members.
“We all pay them our fees every year and they could be doing a lot more to help benefit us,” Mr Samios told The Adviser. “Why can't they advertise on TV and radio and push people to go to a mortgage broker? With all the money we pay them, I don't really see any money going on advertising for us.”
Polls on association performance
The comments from brokers follow on from a straw poll on The Adviser, which revealed that around 80 per cent of respondents thought the Mortgage & Finance Association of Australia (MFAA) had performed poorly over the past year.
Indeed, at the time of writing, 67.1 per cent (324) of the respondents rated the MFAA’s performance as ‘very poor’, while a further 12.4 per cent (60) said it was ‘poor’.
Only 3.9 per cent said the MFAA’s performance this year was ‘good’. However, 7.9 per cent said ‘very good’ and 8.7 per cent were indifferent.
The MFAA has since contacted its members regarding the criticisms and acknowledged that its communication with members had suffered this year.
The Adviser is now running a similar poll on the performance of the Finance Brokers Association of Australia (FBAA) to gauge how the industry views the MFAA's rival body and will be running a feature in the January issue of the magazine comparing and reviewing the findings.
[Related: Brokers slam MFAA performance]
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