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Jessica Darnbrough
With the introduction of licensing now imminent, industry pundits are predicting that the majority of brokers will opt to be credit representatives.
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Firstfolio’s chief executive officer Mark Forsyth told The Adviser that onerous compliance requirements would force most brokers to opt for the credit representative model.
“It is an inherently human trait to leave things until the last minute and I predict this will happen with regulation,” Mr Forsyth said.
“The majority of brokers will wait till the last minute to fill in their licence application and then realise just how much work is involved in complying under the regulation. By then it will be too late to meet all the requirements and they will be forced to become a credit representative.”
But while Mr Forsyth said he expects the majority of brokers to opt for the credit representative model, he said Firstfolio would offer both models.
Yesterday, Gadens Lawyers issued a warning to the brokers that are contemplating holding their own licence under the National Consumer Credit Protection Act to act fast on compliance.
In its latest regulatory update, the legal adviser said many brokers underestimate the amount of work that is involved in obtaining an Australian Credit Licence.
“We recommend you should attempt to have your licence application lodged by early November in case there are any last minute difficulties or omissions. Incomplete applications may not be accepted by ASIC and if there is no current application at 31 December 2010, your registration will lapse and you will have to cease business,” the broker update read.
