MPA asks three brokers their thoughts on when it's acceptable for a broker's accreditation to be taken away.
COMMONWEALTH BANK REVOKES BROKERS’ ACCREDITATIONS
MPA put this question to three brokers following the Commonwealth Bank’s decision to give a segment of its accredited brokers two weeks’ notice for the revocation of their accreditation, after identifying them as being “inactive”. CBA said in a statement: “As part of an ongoing review of our products and services, we identified a segment of our accredited mortgage brokers who have been inactive with Commonwealth Bank for some time. To ensure we uphold the highest level of professional standards, and continue to meet the needs and expectations of our customers, those mortgage brokers who have been inactive will no longer be accredited with us.”
Revoking a broker’s accreditation is absolutely the prerogative of the bank or lender, especially in regards to poor quality or misleading information. While I think that volume hurdles are unfair and may be replaced with mandatory training in lieu of submissions, there needs to be standards so that the industry remains professional and processing times are not affected.
I have heard the backlash the Commonwealth Bank has received for the culling of brokers who have not submitted a deal in 12 months. With the risk of going against the grain, I believe it could be a positive thing for the industry. I believe the intention was to weed out non-professional brokers, rather than to push professional brokers for more business.
In a free market, it’s important that lenders are able to cancel broker accreditations at their discretion. However, in practice, it’s entirely unacceptable for a lender to cancel a broker’s accreditation without sound reason, such as fraud or other misconduct.
We recently saw a major lender cancel broker accreditations en masse, based on the volume of application received. ASIC have made it clear that they are focused on ensuring good client outcomes. The regulator flagged loyalty programs in its review of broker remuneration as exacerbating a broker’s conflict of interest. How much more is this the case where brokers feel their very accreditation is threatened if they don’t write a particular product, with little regard for the client’s best interests?
Mortgage Choice Malvern
If a broker does anything illegal they should be stripped of their accreditation and if found to be recommending a particular lender for their own financial gain, they should be investigated. Brokers should also be forced to stay accredited with a minimum number of lenders. If they are removed/unaccredited by one bank, they should be investigated fully and if serious they should have their licence taken away. Mortgage Choice franchisees must stay accredited with all lenders on our panel otherwise we are in breach of our franchise agreement and we’d lose our business. Mortgage Choice brokers are also paid the same regardless of the lender or product that the client selects.