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It would appear the mortgage industry’s leading professional bodies have their work cut out as more than half of all brokers admit they won’t retain their membership post licensing.
According toThe Adviser’s most recent straw poll, 50.5 per cent of brokers said they would not retain their membership.
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Of the 594 respondents, 49.5 per cent said they would retain their license.
The Mortgage and Finance Association of Australia chief executive officer Phil Naylor told The Adviser that there was still a lot of value in being a member of a professional body.
“Having a licence won’t distinguish you from every other broker, because under the new licensing regimes all brokers will be required to have the necessary qualifications,” Mr Naylor said.
“What will distinguish you is being part of a recognised and trusted professional body.”
Mr Naylor said research undertaken by the MFAA had shown borrowers preferred to deal with brokers that were members of a professional body.
“Borrowers want to use a professional broker, and by using a broker that is also a member of the MFAA, they know they are getting just that,” he said.
Mr Naylor said he understood that some brokers would become reluctant to retain their membership post licensing, but said the MFAA would help them promote their business.
“Post licensing we will be launching a national campaign that promotes our brokers as the best of the best,” he said.
“At the moment, I am travelling around Australia holding seminars and speaking to brokers about the importance of retaining their membership and the benefits that come with being an MFAA member.”
FBAA president Peter White agreed there were many benefits for brokers that are associated with an industry body.
The FBAA is curently gearing up to launch a new services platform for its brokers.
“The new platform will give our members better access to cost-effective mortgage and non-bank products, services and business tools through the FBAA.”
Smartline franchisee Ian Simpson told The Adviser that industry bodies such as the MFAA and FBAA have an important role in industry representation and would become even more important in overseeing national regulation when the licensing laws are implemented this year.
“The MFAA is a representation of the industry, not only for brokers but for lenders and consumers as well,” he said.
Mr Simpson said the role of the MFAA will be increasingly significant as the industry tries to steer away from the regulatory path taken by the financial planning industry.
“The MFAA has an important role in overseeing industry regulation and ensuring that any new laws are practical and suitable to the broking industry,” Mr Simpson said.
“Brokers don’t want to end up being regulated like financial planners.
“Currently, financial advisers are required to give their clients full disclosure in the form of many-page documents. This is burdensome not just for the adviser but the client. Client’s who receive a bundle of disclosure information from their adviser aren’t going to read it. They will become overwhelmed.
“If the broking industry follows the financial planning industry in terms of disclosure, then that defeats the purpose of why people go to brokers in the first place – which is to receive simple, uncomplicated and practical advice.”
