One of the industry’s most successful mortgage professionals has praised CBA’s decision to impose a tougher accreditation process for brokers.
CBA revealed last month that from the first quarter of 2018, new mortgage brokers will be required to hold at least a Diploma of Finance and Mortgage Broking Management, have at least two years’ experience writing regulated residential loans, be a current member of either the MFAA or FBAA and be a direct credit representative or employee of an approved aggregator or Australian Credit License (ACL) holder.
“I applaud CBA,” Intuitive Finance managing director Andrew Mirams told The Adviser on the latest Elite Broker podcast. “Someone had to make a bit of a stance and they have.
“If you want to improve standards in the industry, someone’s got to make a standpoint. I’d be staggered if a lot of the other lenders didn’t start to tighten up, because it costs them a lot of money to manage accreditations and manage people. And if people are coming into the industry and they're making a dog's breakfast of all their submissions and they were never going to get through, then that is a real issue.”
Deloitte financial services partner Heather Baister is also confident that more changes will be coming.
Ms Baister told The Adviser: “My view is that we will continue to see these tweaks coming through. I think the interesting thing will be if there are any significant change to the commission structure. Nobody really wants to go first on making any significant change, so all we are seeing at the moment are these small tweaks.”
Mr Mirams said that the “real issue” for the third-party channel, and for lenders like CBA, is the prevalence of new inexperienced brokers “making a dog’s breakfast” out of the deals they submit.
In a recent interview with The Adviser, CBA’s general manager of third-party banking, Sam Boer, said that the group has seen a “huge amount of turnover” with new brokers, which he said was a “clear indication that these people need support”.
Mr Boer said: “They need more training, they need more investment to ensure that they are successful and, of course, with the increased complexity now and expectations on meeting responsible lending, we need to make sure that our brokers are meeting those standards and doing it right.
“So, it is very difficult for somebody without any financial experience, we believe, to be able to meet those standards. And therefore, we need to support, embed and ensure that they have that minimum level of capability.”
Mr Mirams believes that there is a “heavy gap” in broker education and training. Intuitive Finance is currently developing its own training to address this issue.
“We’re partway down the path,” the managing director said. “There’s a lot of work to do because I’m determined to make sure it’s the best program out there to give people the opportunity.”
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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