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Minimum volume requirements introduced by two of the four majors in recent months have called into question the place of part-time brokers in the industry.
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The lenders claim minimum volume requirements will give the industry the shake-up it needs to improve the quality of loan applications and raise the bar for brokers.
But there is growing speculation that the changes are part of a move to push part-time brokers out of the industry.
Smartline executive director Joe Sirianni and MFAA president-elect is one industry stakeholder who supports the changes.
He says minimum quotas will have a positive flow-on effect on broker numbers, weeding out those who are not fully committed to the industry and to maintaining quality standards.
“Volume quotas will help the industry to clean out some of the part-time brokers who may negatively impact the reputation of
full-time, professional brokers,” says Mr Sirianni.
But MFAA CEO Phil Naylor says the focus on whether brokers work full- or part-time is misguided.
“A professional ‘part timer’ will be more effective than an unprofessional ‘full timer’,” Mr Naylor says.
“If brokers have a part-time mentality they will not stay in the industry over the long term. But if they have a professional attitude and are committed to a career as a broker, it would not matter whether they were part-time or not.”
But part-time broker and managing director of Thorpe Financial Services Daniel Thorpe says in focusing on quantity over quality, the banks’ minimum quotas will hurt part-time brokers unnecessarily.
“There is absolutely no correlation between a broker’s time status and their professionalism or ability to submit quality loans,” says Mr Thorpe, who despite having a high conversion rate says he would fall short of some of the new volume requirements.
“I only take on the number of customers I can handle, because I like to give them full-time service. I am a full-time carer, yet I still write more business than many of the so-called professional brokers,” he says.
Nicki McDavitt, the director of McDavitt & Associates, also rejects the idea that the new minimum volume requirements are about maintaining quality standards.
“This minimum quota rubbish has nothing to do with education or standards,” says Ms McDavitt.
“There are many professionals in Australia who get to a point where they are maintaining their business, such as general practitioners and dentists, yet want to work fewer hours for one reason or another.
“This does not make them incompetent and incapable of diagnosing or looking after their clients. They would not lose their accreditation because they wished to worker fewer hours, so why should brokers?” she says.
Simon Pressley, the founder of 6 Point Finance, says minimum volume quotas may not be an ideal solution to address some of the issues around the quality of loan applications, but are still a step in the right direction.
“The industry needs a tidy up,” Mr Pressley says. “It is not about part-time brokers or full-time brokers specifically, it is about quality. If this can improve quality – great. If not, then maybe the banks need to take another approach.”
