An industry association is telling brokers to warn borrowers not to be hoodwinked by online companies touting DIY home loans.
The Finance Brokers Association of Australia (FBAA) executive director Peter White said a company which encourages people to “broker your own loan”, which was featured in the Australian newspaper recently, was potentially leading people down a dangerous path.
He said, “I understand disruptive technology when it comes to finding short term accommodation or getting a car from point A to B, but making what is the biggest financial decision of a lifetime requires a lot more knowledge than a smartphone app.”
He said the assertion made in the article that you can become a broker in four days is “recklessly laughable”.
He said, “Our industry knows that brokers undergo extensive studies, mentoring and ongoing educational development, and the system is such that no lender will deal with a broker without meeting strict compliance measures.
“Only a tiny percentage of people who try to navigate the process of being their own broker will succeed, most will end in disaster.”
He is also determined to expose the myth once and for all, that a finance broker needs only limited qualifications.
The FBAA has recently hit out at the ABC for its clarification after a journalist stated that “anyone can set themselves up as a mortgage broker, even a gym owner”.
White said, “We must ensure that the public and media better understands that the initial certificate is a starting point but not enough by itself to be a stand-alone broker.
“When the media reports stupid statements like this they have no understanding that brokers are required to be mentored for a number of years, and that most achieve further diplomas or have gained masters and doctorates in finance.
“Furthermore, to do business as a home loan broker you are required to join an industry association and this requires extensive background and credit checks, references and ongoing development. Not everyone gets a Guernsey.”
He said this message is more important now in the light of the banking royal commission.
