When is it acceptable to withdraw a broker's accreditation?

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.”

Rachelle Eyndhoven
Director
Sphere Finance

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.

Jai Martinkovits
Managing director
Finance Ferret

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?

Greg Campbell
Owner
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.
Add your comment
  • Coast Broker2/05/2017 2:26:50 PM

    Have to disagree with Rachelle's comments. Believe she comes from one of the majors in a past life and still put a lot of business to the Bank

    1
  • Peter21/04/2017 12:16:51 PM

    We had a lender withdraw an accreditation from a new broker before he'd ever written a single loan. No reason given whatsoever, but we think it was because 7 years ago he worked for a buyers agent who has since had a very bad relationship with that lender. No fault at all of the broker and total stonewalling from the lender.

    I think lenders should be able to withdraw accreditation if you're not writing business for a prolonged period of time, but they need an easy avenue to become re-accredited.

    Lenders should also continue to pay full trail on loans written. The only justification for a lender withdrawing existing trail should be in the event the broker has committed an illegal act, and this should not be up to the lender to determine.

    2
  • TomP21/04/2017 12:11:39 PM

    Two of these interviews are absolutely rubbish. If CBA take away your accreditation because you haven't given them a loan perhaps you are more professional than the broker who gives them one just to stay accredited. And so Mortgage Choice force you to stay accredited with lenders? How? Isn't the MC commission paid to brokers based on volume? And even though one lender past 0.6% and another 0.7% you only get the same - who gets the rest? Why isn't ASIC on to to CBA if the brokers are not guilty of any misconduct?
    Good interview Jai!

    3
  • RW21/04/2017 11:24:40 AM

    Seems to fly in the face of ASIC Review findings....I wonder what the regulator thinks?

    4
  • Ray21/04/2017 11:14:51 AM

    The CBA are a joke, seriously. They drip with arrogance. When it comes down to pricing, they are NEVER in the top 3 so if you are striving to get the best for your client you would never send them a deal anyway so who cares what they do..

    5
  • Brado21/04/2017 10:58:17 AM

    Mortgage Choice and Aussie are a joke... given the fact that CBA often do not represent the best loan for the client, yet your brokerages are 'forcing' your brokers to send loans to CBA, to stay accredited or lose their jobs? disgusting... stick up for your brokers! I personally don't care if CBA cancel my or any of our brokers accreditations ... we rarely use them anyway... and we have no requirement to stay accredited with all 35 lenders on our panel...

    6
  • AW21/04/2017 10:36:11 AM

    What CBA has done clearly shows that they are not interested in the best outcome for the customer. We as brokers build fact finds on our customers then provide 3-5 lender comparisons. It is the customers decsion as to which lender they would like to choose based on rate, fee's, SLA's and their knowledge of the lender. We have no say in this. For CBA to remove accreditations for brokers who dont send them business is sheer bastadry. They then ask us to answer 4xquestions as to why our accreditation should be retained and ignore the truth in our responses. Good Work CBA, good to see you care about our customers.

    7
  • Paul The Banker21/04/2017 10:35:27 AM

    I haven't written a CBA loan for more than 2 years, but do still hold a loan book with them of about $3M.

    I haven't been threatened recently with cancellation of my accreditation, but don't see why I should be. Just because I don't use the CBA doesn't mean I am not an active broker, what it does say is that for my clients the CBA did not offer a product or interest rate that was what my clients chose as the lender they wanted to proceed with.

    I thought it was the clients choice of which lender to proceed with.
    The threat of accreditation cancellation will encourage poor behaviour by brokers which is totally contrary to what being a good brokers is all about, let alone what ASIC & APRA are telling us we should do.

    Brokers should not be forced to use a particular lender in order to retain their accreditation and the Aggregators should be standing up for their brokers (perhaps they are in my case, I don't know).

    If anyone from the CBA would like to tell me why their products & interest rates are worth considering, please let us all know. CBA rates & products just don't stack up in the current market, for the clients I am dealing with. Perhaps they will again in the future, which is why I still read ALL their product, policy & interest rate updates.

    8
  • Matt21/04/2017 10:34:21 AM

    I have recently been stripped of my accreditation with CBA, not for misconduct, but for not writing enough loans with them. I am now in my third year of broking, and the business is building. Within my first 2 years, I only wrote 2 deals with them. They were pre-approvals that still haven't gone anywhere. I now have 2 deals that I had recommended to clients that I had recommended CBA as first choice to my clients and are almost ready to commit, and now I can't. How is this "creating a better outcome" for their customers? I also responded with a detailed appeal which I was encouraged to do via the CBA BDM which was also backed by my aggregator, outlining growth in the business and estimated future growth but it was overturned. I have had no issues with my submission quality with any lenders. If CBA want to provide "better outcomes" for their customers - then why are they the only major that does not provide face to face visits with their BDMs, as well as turning up on any development days or hold any workshops? I am hopeful that in doing all of this they lose their number one spot and come back begging brokers for their accreditation, of which I will not be one of those.

    9
  • John21/04/2017 10:30:30 AM

    You may get the same commission regardless of the lender, however, the facts are that the lenders do pay differently, so the commission is going somewhere.
    To Mortgage Choice head office?

    10
  • DC21/04/2017 10:15:28 AM

    Jai makes the most valid point. We work in the borrower's best interest, not the banks. Why would I write a loan with a lender just to keep my accreditation if there was a more competitive offer available from another lender? This is totally against the basis of how we operate as an industry. And don't tell me that the majority of consumers aren't focused on the interest rate. Have lenders remove rates from their advertising and just advertise their superior service or product niches and see how that is received by consumers.

    11

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