The industry is split over CBA’s new accreditation changes, with some suggesting that every lender should emulate the moves, while others hitting out at the changes.
CBA’s recent decision to change its accreditation requirements for new brokers has been one of the more divisive topics in recent weeks.
Speaking to The Adviser, mortgage broker at Front Runner Finance Solutions Laurie Parkes welcomed accreditation changes from the Commonwealth Bank of Australia (CBA).
The Bathurst-based broker believes that CBA’s tightening of accreditation requirements was a “really good idea”. She called for other lenders to follow suit.
“The Commonwealth Bank’s idea to have people mentored and trained up properly before they become accredited with the Commonwealth Bank is a really good idea,” Mr Parkes said.
“It makes sense. Every lender should do it.”
Mr Parkes called for institutions to “train their staff properly and get it right”, claiming that a lack of proficiency from some brokers is disrupting the lending process.
“[When I] talk to CBA staff about the deals that they get from new brokers, [they say that the deals] are so convoluted and stuffed up that they’ve got to spend ages trying to fix it.
“[Good]-quality deals are held up because somebody doesn’t know what they’re doing. So, I think CBA has gone down a good road.”
Likewise, Andrew Mirams of Intuitive Finance said that he “applauded” CBA for the change, as has Atelier Wealth’s Aaron Christie-David, calling the move a “step in the right direction”.
Mr Christie-David told The Adviser: “This is a bold decision by CBA and, personally, it’s a step in the right direction. The move by CBA was designed to lift the standards of submissions, which reflects a quality-over-quantity approach.
“I wholeheartedly agree with the Diploma being a minimum for our entire industry, and I’ve been an advocate to increase the barriers to entry for our industry.
“CBA flagged the high turnover for our industry, and if you look at tenure data from the MFAA, it’s alarming that [a significant] number of brokers don’t survive their first two years.”
He continued: “We need much better pathway programs for our industry. This is where CBA’s two-year requirement becomes relevant and we can’t expect that a Diploma equips a new entrant to excel.
“CBA certainly should have done much better with their communication and change [of] management. It’s these shortcomings that ha[ve] got the industry’s nose bent out of shape. Share the common errors brokers make; push back on brokers who keep submitting poor applications; offer a two-year education program to help brokers succeed than simply refusing to accredit them.”
The CEO of the Mortgage and Finance Association of Australia (MFAA), Mike Felton, also defended CBA’s decision and called for the industry to further invest in education and training.
“It is in nobody’s benefit to have inexperienced brokers writing deals that are not good outcomes for consumers or for lenders,” Mr Felton said.
“Having said that, if we expect them to have the knowledge and skills to represent the industry appropriately, we need to be investing in that education and training so that they have the required capability.”
However, the CEO of non-bank lender Mortgage Ezy, Peter James, has told The Adviser that he believes creating higher barriers to entry would have far-reaching consequences for the broking industry.
Mr James said: “The biggest challenge that this industry faces are the lack of new entrants, at a young age, to it. It’s because of that that I think we face the biggest challenge that the broking community has seen in the last two decades.”
Best Value Home Loans broker Michael Ellison emphatically hit out at the changes, saying that those are “elitist and irresponsible”.
Mr Ellison told The Adviser: “New entrants to the industry do have to learn compliance and regulatory procedures as part of entering the industry. These are necessary learnings but do not equip a broker for the industry. Having a knowledgeable mentor bridges this gap in learning and establishes guided, real-world loan process and interviews to be fashioned in a responsible way.
“The move by CBA is elitist and irresponsible. [It’s] the biggest lender dismissing those who will become the future leaders in our industry. Imagine tradespeople not taking on new apprentices. This is a major mistake and sends the wrong message to those new brokers who care about a future in the industry.”
He added: “It is not lack of experience that causes problems in our industry; it is lack of integrity and dishonest character. Having a mentor eliminates this type of character quickly and is in itself a cleansing activity…
“Banks trashing new entrants is simply an appalling mistake for the industry.”
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