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Jessica Darnbrough
The majority of brokers look set to opt to hold their own credit licence, a new survey has found.
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According to The Adviser’s latest weekly straw poll, 54.9 per cent of brokers said they will hold their own licence, while 35.4 per cent plan to become a credit representative.
The results mirror a previous survey conducted by The Adviser back in May, though there has been a slight swing towards the credit representative option.
According to the May straw poll, 57.3 per cent of brokers said they would want to hold their own credit licence, while 29.7 per cent said they preferred the credit representative model.
Intelligent Finance managing director Justin Doobov told The Adviser that his company was currently in the process of obtaining its own licence.
“We are a growing company and so I think, at this stage, it makes sense for us to hold our own licence,” Mr Doobov said.
“We are mindful of the added compliance burden that being a licence holder will have, however, I think that is a small price to pay to ensure we are our own boss.”
But despite his decision to become a licence holder, Mr Doobov said he understood why certain brokers would opt to be a credit representative under their aggregator.
“Our aggregator’s credit representative model does seem very attractive.”
Indeed, it seems which licensing option a broker decides on may vary depending on what aggregator group they operate underneath.
Advantedge’s general manager of distribution Steve Weston told The Adviser last week that a greater understanding of the compliance required under an ACL had encouraged the aggregator’s broker members to choose the credit representative model.
“Broker confidence about being an authorised credit representative has doubled, and so has their understanding about the various models on offer,” Mr Weston said.
Mr Weston said brokers were beginning to understand that the credit representative model would save them time and effort.
“In addition to the time and effort saved by brokers opting to become an authorised credit representative, being an authorised representative adds commercial value to a broker’s business because it helps assure the business is more transparent and it easier for a future sale,” he said.
But in contrast to Advantedge, Connective expects the majority of its brokers swing towards the ACL model.
According to the aggregator’s principal Mark Haron, 85 to 90 per cent of the company’s brokers are expected to hold their own licence when regulation comes into play.
“A lot of brokers want control of their own destiny. They want to be their own boss and as such are opting to hold their own licence,” Mr Haron told The Adviser.
