The Customer Owned Banking Association’s controversial comments about brokers have ignited a debate of a different kind.
Michael Teterin, managing director of Sydney brokerage Prosperity Finance, said brokers need to portray themselves as “educators to their clients, not salespeople” in order to deliver the best service, and that a university-level qualification would go a long way in achieving that.
“If you needed to see a doctor or a specialist, you wouldn’t be comfortable seeing them about a serious injury or illness if they had a certificate in nursing – you’d want to see someone with several years of education and experience,” he told The Adviser.
“As brokers, we’re talking to people about one of the most serious financial decisions in their life, but most are performing the role as a salesperson – they’re focused on only learning the product and the rate, but these are only some of the many other factors that brokers need to know.”
Mr Teterin said people want to talk to finance professionals with a good education about how they can structure their home loan – not salespeople.
“I don’t see myself as a salesperson – I see myself as an educator. I provide my clients with knowledge that the banks won’t give them, so that they go away feeling confident and in control,” he said.
Holding an honours degree in money and finance, Mr Teterin said if he was looking to hire brokers for his business, he would only consider those with a similar level of education.
“Don’t get me wrong, I have total respect for all of my fellow brokers. They’re working very hard and doing their best – they’re actually making things happen within the industry,” he said.
“But when you’re looking at the effectiveness of how loans are structured, the interest rates are a very small part of that, and this is where people will be increasingly demanding a professional service.
“On the flipside, you can be a highly qualified broker, but the level of education might not give you the skills to sell loans and communicate with customers effectively. Brokers need to have all of this, but we need to have the knowledge first.”
Mr Teterin added that he would welcome a lift in the mandatory education standards to university level, but it is totally unrealistic to expect existing brokers to comply with such a change.
According to a recent poll conducted by The Adviser, 70 per cent of respondents believe the current minimum education requirements to become a mortgage broker are sufficient, while 17 per cent believe it should be raised to a university degree. The remaining 13 per cent said nothing beats on-the-job experience.
[Related: Lender invests heavily in broker education]