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There are more credit representatives and licensees identifying as brokers, data released by the broking association suggests.
The Finance Brokers Association of Australia (FBAA) has released data suggesting that the total number of brokers in Australia is increasing.
While there are currently more than 39,500 credit representatives licensed under the Australian Securities and Investments Commission (ASIC), this register includes both individuals and companies across financial services.
According to the association’s soon-to-be released Consumer to Broker Ratio Report – compiled by research institute CoreData – when broken down to solely include registered individuals, there were 19,683 registered credit representatives in Australia in the calendar year 2020, up from 17,881 in 2019.
The association has noted that the data suggests that the low 2019 numbers may also have been an anomaly, likely driven by pressures of the banking royal commission, given they “interrupted a period of continuous growth since 2012”.
Indeed, FBAA managing director Peter White AM recently told the House of Representatives standing committee on economics that the FBAA had seen a “definite flattening” of growth trends in FBAA’s membership since the final report was handed down in 2019, but that membership numbers were now expanding, with a large portion of new members being new-to-industry.
He pointed to the FBAA’s own figures, which show that membership at the end of FY21 had increased by 10.8 per cent on the previous year, to “well over” 9,200 members as at 30 June 2021, with more than 90 per cent being customer-facing finance and mortgage brokers.
Speaking to The Adviser, Mr White commented that the broking association released the credit representatives data to highlight that while there will always be natural attrition with brokers leaving through retirement or change of career, the increase in new entrants meant that, overall, the number of brokers is “well up” on last year.
When asked what was attracting new entrants to broking, Mr White said: “When the coronavirus first started, brokers were actively reaching out to clients to assist them and help them navigate the pandemic – and this just generated a whole other wave of understanding around how difficult it is navigate finances and what’s available, and really highlighted how important brokers are. That assistance really meant something to the borrowers. Especially in the small-business sector, which has been through a hell of a lot...
“There is a huge amount of stories we hear from borrowers who say they used a broker for their loan and that got them thinking that maybe they wanted to get into it themselves,” he said.
“Generally, there is an in-flow of people into this industry, and we’re also seeing that aggregators are proactively recruiting for more people to come on board, because it’s a strong, resilient industry with lots of demand.”
Mr White said that while many entrants came from finance, the make-up of new brokers ranged across a plethora of industries.
“I don’t think really the dynamic mix of new entrants has changed over the years,” the FBAA MD told The Adviser.
“They were borrowers; they were limo drivers; they were bankers... they come from all industries and areas, and I think that’s because what’s impressed people is the resilience and strength of the industry to grow – particularly during COVID – when other sectors might not necessarily be doing so well.”
Mr White acknowledged that there have been plenty of challenges for the broking sector over the past few years, the industry was needed more than ever.
“Despite the challenges our industry is strong.
“Right now most brokers have never been busier, so let’s focus on the strength, resilience and professionalism of our great industry,” he said.
The FBAA figures build on a trend noted by the Mortgage & Finance Association of Australia’s latest Industry Intelligence Service Report (IIS), which covered the period 1 April 2020 to 30 September 2020.
According to the 11th edition of the report, which drew on data supplied by 12 aggregator brands, there were 16,490 active brokers working under those brands between the six month period, up from 16,389.
[Related: FBAA announces membership fee freeze]
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Annie Kane is the managing editor of Momentum's mortgage broking title, The Adviser.
As well as leading the editorial strategy, Annie writes news and features about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape.
She is also the host of the Elite Broker, New Broker, Mortgage & Finance Leader, Women in Finance and In Focus podcasts and The Adviser Live webcasts.
Annie regularly emcees industry events and awards, such as the Better Business Summit, the Women in Finance Summit as well as other industry events.
Prior to joining The Adviser in 2016, Annie wrote for The Guardian Australia and had a speciality in sustainability.
She has also had her work published in several leading consumer titles, including Elle (Australia) magazine, BBC Music, BBC History and Homes & Antiques magazines.