Become a Broker
The demand for qualified and ethical mortgage and financial professionals is growing, as more and more consumers turn to brokers as a trusted source for housing and/or business finance.
What Brokers Do
Brokers work with clients to determine their borrowing needs and capacity, select a loan that suits the borrower’s aims and objectives and manage the process through to settlement. Brokers need strong financial literacy skills, excellent people and customer service skills and the ability to really listen to clients’ needs.
Types of Broking
Brokers can specialise in areas such as:
- Residential Loans
- Reverse Mortgages/Equity Release
- Equipment Leasing
- Chattel Finance
- Car and Personal Loans
- Business Loans
- Debtor Finance
- Commercial Property Finance
Many brokers are gaining additional skills and qualifications to expand their client services into areas such as general insurance and financial planning.
Licence Requirements – changes expected from 1 July 2010
- If you are operating in Western Australia you will need to obtain a finance brokers licence. Read more…
- The ACT has a registration requirement for finance brokers. Read more…
- From 1st July 2010, ASIC will be the National Australian Regulator for all participants who act to secure or provide credit. All participants are required to register with ASIC from 1st April 2010. From 1stJanuary 2011 all must be licensed by ASIC.
Obtaining Lender Accreditation
A broker/brokerage has to obtain accreditation with lenders in order to sell their product/s. Most brokers will become accredited with a number of lenders – called a ‘panel of lenders’. Brokers are only able to sell products from lenders on their panel. The requirements for accreditation vary from lender to lender, as too does the size of each broker's panel. Some lenders have minimum volume loan requirements in order to achieve and maintain accreditation.
Aggregators & Franchises
Many brokers join an aggregator or franchise group to access the group's wide panel of lenders. These groups provide many additional services to brokers such as software and technology, training, general business support and back office administration.
Other Requirements
Professional Indemnity Insurance
Like many other businesses, brokers also need to maintain professional indemnity insurance.
It is a requirement of MFAA membership for a member to be covered by, or personally have in place, PI Insurance for no less than $2 million for any one claim and $2 million in the aggregate and minimum Run-Off cover. More...
Membership of the Credit Ombudsman
Many businesses are joining an external dispute resolution (EDR) scheme as part of their consumer complaints handing processes. The industry's EDR is the Credit Ombudsman (COSL).
The MFAA requires its members to hold membership of COSL (or another ASIC approved EDR) or be covered by a COSL membership. This is also a requirement for all brokers under the ASIC regime. More...
Pay Levels
Brokers are remunerated by the lender and receive an upfront commission and a trailing commission on the loans they settle. It is not standard industry practice for a broker to charge a customer for their service due to this arrangement although, the changes required by the new Credit Legislation may mean some brokers will charge a fee and receive a commission. Consumers should be encouraged to ensure that a broker provides them with this information before they engage his or her services .
