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By: Jessica Darnbrough
The mortgage broking industry is on the verge of further consolidation, according to Vow Financial’s chief executive officer Jeff Zulman.
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According to Mr Zulman the 14,800 lenders and intermediaries that have applied for an Australian Credit Licence bears no relationship to the final number that will complete their accreditations.
“Registering for credit is the easy part,” Mr Zulman said.
“By 31 December, every one of the loan writers and mortgage brokers out there will have to be accredited.
“That means they will have to do the difficult work of making sure that they can pass ASIC’s requirements,” Mr Zulman told The Adviser.
The decision as to whether brokers should choose to become an Authorised Credit Representative or become an Australian Credit License holder is a significant one as it will have a major impact on the time and money invested in ensuring their compliance requirements are met.
Advantedge’s general manager broker platforms Steve Weston told The Adviser that brokers should carefully weigh up their options before making the leap.
According to Mr Weston, there is no hard and fast rule for brokers to follow in deciding whether they choose to become an Australian Credit License holder or an Authorised Credit Representative.
“What’s right for one broker will not necessarily be right for another. The key is to find a solution which best suits a broker’s individual circumstances,” he said.
“Compliance brings with it new responsibilities, new processes and new opportunities for everyone, not to mention greater competition and increased costs through EDR fees, licensing with ASIC, Authorised Credit Representative fees, compliance consultancy, potentially higher professional indemnity insurance costs and more robust training.”
