CBA’s general manager of broker sales, Sam Boer, addressed his lack of popularity among brokers during MPA’s live-streamed major banks roundtable last Friday (16 February).
CBA sparked debate and displeasure among brokers and other industry figures in December when it announced that it would be changing its accreditation process in the New Year. Boer acknowledged last Friday that the move hadn’t been welcomed by everyone, but took the opportunity to explain CBA’s decision in further detail.
“I know I haven’t been popular for taking a position on this, but I’m absolutely committed to implementing the strategies that we have in place … because I do believe it’s going to lead to a much better outcome, particularly for new entrants that we take on board going forward,” he said during the live panel discussion.
The new benchmarks made headlines primarily because CBA will now require new brokers to have at least two years’ experience writing regulated residential loans. The broker will also need to hold at least a diploma of Finance and Mortgage Broking Management and be a direct credit representative or employee of an approved aggregator, head group or ACL holder.
“I really accept the experiential element of the training that’s going on, what I don’t accept is the inconsistent manner in which that is being applied across the industry. We can do a lot more to standardise that and improve on that,” Boer said.
The learning curve for brokers joining the industry today is much steeper than it was several years ago, he said. People often talk about ‘vanilla home loans’, but most transactions come with a curve ball, he said, which is why training is so important.
“There’s a lot more that we can do to give back to help train. But I am against people coming in with little or no experience sitting through two or three days, maybe even a week, maybe two weeks of training, and being let loose in front of a customer to write a loan. The data, the evidence that we’ve got proves that that produces poor customer outcomes. You can’t refute that, the data speaks for itself.”
Boer said CBA has made its position on accreditation clear and is now investing in the training programs to support it.
He pointed to the MFAA’s most recent Industry Intelligence Service report which found that from October 2016 to March 2017, 2,002 brokers joined the industry and more than half, 1,532 brokers, left it.
“That rate of turnover is unsustainable and there’s a huge cost attached to that. Not to mention the risk that now comes to that from a regulatory point of view,” he said.
CBA realised that it was time to better support the 13,000 brokers it already had on board rather than throw money at recruiting and resourcing new entrants, he said.
As for new entrants, CBA still supports them, but “you’ve got to be delivering really good quality first”.
“We have performance measures that are very fact-based, so if you’re delivering these good customer outcomes then we’re happy to support and bring you on.”
Accreditation when switching aggregators
On Monday (19 February), a CBA spokesperson said that any broker looking to switch aggregators or head groups will "need to meet our new accreditation standards" even if they were previously accredited with CBA under their old aggregator.
"This includes the need for brokers to be a direct credit representative or employee of a CBA approved head group or Australian Credit Licence (ACL)," the spokesperson said.
“All transfer applications are considered on merit and exceptions may be made where a broker can demonstrate they are consistently delivering exceptional customer outcomes.”
CBA said it is enhancing its accreditation process "to allow us to better identify, service and focus on those brokers who are delivering good customer outcomes and are committed to high professional standards for the industry".
MPA’s 2018 Major Banks Roundtable can be viewed in its entirety here: https://www.mpamagazine.com.au/tv/mpa-major-banks-roundtable-2018-246660.aspx