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Licensing is almost upon us and while there is little doubt that the level of professionalism will be raised, how will it impact brokers when it comes to doing business? This month, we asked...
Do you think licensing will help or hinder volumes next year?
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IAN SIMPSON
Smartline
I believe licensing will have a positive influence on the volumes that brokers write but it may take a few years to come to fruition. The benefit will come from two angles: firstly as broker numbers naturally fall with licensing and secondly, as the improved professionalism (and public perception) of brokers improves. I believe a spin-off benefit for brokers will be that the increasing licensing and training required will naturally lead to more take-up of additional product offerings and, most specifically, insurance.
SIMON ORBELL
Smartmove
I think it will help broker volumes moving forward. At the end of the day, licensing will make brokers more professional and as such, create better industry practitioners.
That said, licensing will ultimately hinder a broker's ability to sell low-doc loans. Under the forthcoming regulation, a broker needs to make sure they offer a loan that is suitable to a consumer's needs - so these loans may not be as widely offered in the future.
SHANE LALOR
Citiwide
I think initially we will see a small drop in volumes because some borrowers will simply not qualify under the new rules. Lenders have already begun to take a more cautious approach to reliance on certain types of income. The tightening on the low-doc market is evident and this will probably be the most affected segment. On the upside, I think mortgage broker businesses will be better structured as a result of licensing and therefore better equipped to grow their business.
TRACIE PALMER
LJ Hooker Financial Services
I would expect no reductions to commissions at AFM over the next 12 months, as I believe brokers who confer business should be adequately rewarded. But it's hard to give a guarantee because commission changes are really outside of our control. It depends on the funder, and whether they decide to make changes to their commission structures. However, AFM has a strong loyalty with its funders and I can't expect to see any significant changes regarding commissions over the next 12 months.
ROSS LE QUESNE
Aussie
I believe licensing will help broker volumes next year. Licensing has created a barrier for new entrants to the market. It is a barrier that did not exist previously. I think licensing will make it more restrictive for new brokers to come into the industry, as they'll face new legislative hurdles. With a slowdown in new entrants next year, there's an opportunity for existing brokers to increase their loan volumes.
