The general manager of lending at Vow Financial, Clive Kirkpatrick, has said that he disagrees with CBA’s new two-year requirement, adding that education and qualification levels should be set by the industry, rather than banks.
Speaking to The Adviser after CBA’s announcement that it would be making changes to new broker accreditations next year, Mr Kirkpatrick said: “Our drive is to move broking from an industry to a profession, and to do that we need to be better educated and better equipped to provide the customer with great outcomes.
“But the major point that I disagree with is the two-year requirement, and the reason I disagree is because the average age of a broker is actually increasing and we have a duty to bring more experience into the profession.”
Elaborating, the GM said: “We want people to actually want to become a mortgage broker, or a finance broker, as a profession. So, we need to up the education [for] brokers and encourage people to participate in that as they are educated.
“If CBA has a problem with the mentoring programs, then we can actually fix that. But it’s wrong to put a blanket policy on new brokers. It may help [CBA] with the quality of [its] applications, but it certainly doesn’t help the profession overall.”
Mr Kirkpatrick added that he believed that ongoing education was key to improving standards, “so if perhaps you start with a Cert IV [in Finance & Mortgage Broking], and we can [then] review the CPD points and the continuous education to progressively lift everyone to a Diploma [of Finance and Mortgage Broking Management] level.
“But it can’t be a bank determining that. It has to be the overall industry/profession. So, I think it’s more around you need a minimum level of qualification but you also need better ongoing education to get you Diploma level.”
Andrew Rasby, the general manager, lending at Yellow Brick Road, highlighted the Vow Professional and YBR Professional learning platforms, saying: “While the [CBA changes] will have a small part in moving [broking] to a higher qualified profession, it requires a lot more work than just enforcing those [new] rules. It’s about talking to the grassroots part of the industry and that needs more work.
“From my point of view, I think that it is great that CBA has drawn a line in the sand, but it would be better if, as a profession, we all moved at the same time. And that was the whole idea of the Combined Industry Forum [and its reform package].”
Mr Rasby continued: “The underlying cause is that we need a better qualified group of people providing advice to customers. So, [CBA] has done a good thing by making a start, but it would have been better if we all went at the same time.”
Mr Kirkpatrick concluded: “We’ve invested quite heavily in Vow Professional and YBR Professional this year and will continue that on an ongoing basis.
“We believe that better education will lead to better governance, which leads to better customer outcomes.”
Association heads call out two-year requirement
Others in the industry have also criticised CBA’s two-year requirement for new broker accreditations, with the heads of the MFAA and FBAA both warning that it would create barriers to entry for new brokers and could impact consumer outcomes.
The MFAA CEO said: “If we’re going to expect new brokers to have the knowledge and skills to produce good consumer outcomes and represent the industry appropriately, all stakeholders need to invest in the professional development of brokers who are new to the industry.
“Limiting accreditation for two years creates barriers to entry, which — if other lenders followed suit — could inhibit the ability of new brokers to earn an income or gain the required experience. Obviously, we need to find solutions in this area that all parties are comfortable with and a strong mentoring framework would appear to be a critical part of that.”
Likewise, the executive director of FBAA, Peter White, said: “CBA is a very solid institution in the home loans sector, but I just don’t think that this has been well thought through. If you look at people who are new to industry — look at the 30 Under Thirty ranking — there are a lot of people in there who have only been in the industry for 18 months and are under that two-year bracket, and they are the future stars of broking and are writing significant volumes and good-quality loans.
“[CBA is] turning [its] nose on those who are starting in this part of the industry… What is going to happen with CBA, in my mind, is that all these brokers that they have turned their back on will take their business elsewhere.”
[Related: CBA to introduce major accreditation changes next year]
Annie Kane is the editor of The Adviser magazine, Australia’s leading magazine for mortgage brokers. As well as writing news and features on the Australian mortgage market, financial regulation, fintechs and the wider lending market – Annie is also the host of the Elite Broker podcast and regulator contributor to the Mortgage Business Uncut podcast.
Before joining The Adviser team at Momentum Media in 2016, Annie wrote for a range of business and consumer titles, including The Guardian (Australia), BBC Music Magazine, Elle (Australia), BBC Countryfile, BBC Homes & Antiques, and Resource magazine.
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