For those of you that don’t know me, my name is Scott Donnelly.  I am Director of Traineeship Management Australia Pty Ltd (TMA), nationally recognized Training Provider to the Financial Services Industry.

TMA don’t need to be members of Financial Services industry bodies to practice as we are answerable to State and Commonwealth education departments.

However, the events of the last 12 or so months, beginning with banks slashing commissions, has convinced me that the stronger Financial Services Industry Bodies are, the better the industry will be, in the long term.

The Financial Services Industry Body I have chosen to become a member of is the Mortgage and Finance Association of Australia (MFAA).

Personally, I believe the role they have played in representing Brokers in that 12 month or so period, has been exemplary.

Plenty was said when commissions were slashed, that the MFAA was a toothless tiger, answerable only to the banks.  But, in reality, what could they have done about it?

They chose to lose that battle, but win the war.  On Monday 27^th April, the Honorable Senator Nick Sherry released the National Consumer Credit Protection Act (NCCPA).  I can hear the groans already, “Just what we need – more regulation!”  But in order create a level playing field, where Brokers and Banks have to comply with the same set of rules, tougher regulation was required.  Please follow link to summary released by Gadens lawyers:

www.gadens.com.au/documents/20090428163442706.pdf

Moving forward, Brokers will be required to be licensed with the Australian Securities and Investment Commission (ASIC), and so will bank employees that give Mortgage Advice.  Previously, there was ONE set of rules for Mortgage Brokers and no rules at all for the Banks.  This is all about to change, and the Banks are none too happy about it.  http://www.bankers.asn.au/Australian-Bankers-Association-comments-on-draft-National-Consumer-Credit-Protection-Bill-2009/default.aspx

This didn’t just happen.  It has taken months of consultation between Government, Banks and our Industry Body.  If I were a Broker, I would be rejoicing.

This legislation will also drive part-time Brokers out of the industry and make those Brokers with questionable practices reassess their futures.  The fines imposed as part of the new “unsuitability” criteria will see to that.

I have chosen to write about this now, because of the number of Brokers we have come into contact, in the course of qualifying them with our 1 day assessment for  Certificate IV in Financial Services (Finance/Mortgage Broking).  We always discuss the state of the industry and the impact the new regulation will have.  There is always negatives over-tones about the MFAA, and I am compelled to jump to their defense and point out how important the MFAA have been to the Mortgage Industry.  After ½ an hour or so, the Brokers in the room have a completely different take on their future.  Just Wednesday 20^th May, one of the Brokers put up their hand and said that he has been a member of the MFAA for the last 5 years and now fully understands what his membership pays for.  If our classroom is a snapshot of the industry, then there must be plenty of Brokers out there that do not fully understand the positive impact the legislation will have on their business.

There are of course those questions on why Brokers need to continue their membership once they become licensed with ASIC.  The events of the last 12 months should well and truly justify any concerns Brokers have in this area, and reinforce the importance of a strong, professional industry body like the MFAA.

 I have been so impressed with the MFAA in the last 12 months, I have now chosen to become a member.