Evolution of broker education is raising the bar for mortgage brokers
The broking industry hit a new landmark this week when the Mortgage and Finance Association of Australia (MFAA) awarded its first Mortgage Finance Professional Australia (MFPA) designation to Perth-based broker Jarrod Smith.
Developed in collaboration with RMIT Online, the MFPA is a one-of-its-kind program – Australia’s first university-level qualification for brokers.
The MFPA is also representative of the growing emphasis on professionalism and standardisation in the mortgage broking industry.
Anja Pannek (pictured), chief executive of the MFAA, believes the maturation of the broking industry necessitates having a professional designation for mortgage professionals.
Keeping up with evolution of broking industry
“Over the last 30, 40 years, as broking has grown up, it has become a really integral part to the financial lives of Australians. As regulations evolved and the industry has evolved, we too need to evolve in terms of where standards can go,” Pannek said in a discussion with MPA.
Launching the MFPA was not an overnight decision – for the past five years, the MFAA has been conducting research into what a professional designation should look like.
“We felt it very important to be able to deliver to our members the opportunity to differentiate themselves and to achieve a professional designation that is above and beyond what is currently available in the industry,” Pannek said.
For Pannek, the MFPA signifies someone as a trusted professional who has invested in higher education, who “upholds the highest levels of ethics” through ongoing study and professional development.
There are parallels to the accounting space, where the chartered accountant designation holds more weight than being a bookkeeper.
Both roles are important to the accounting ecosystem, but is there a risk of creating a two-tier broking industry with a similar dynamic?
Pannek doesn’t think so. “What (the MFPA) does is it provides an aspirational pathway for brokers as they move through their broking career.”
Currently, brokers must be five years into their career before taking the MFPA, meaning it is unavailable to newcomers.
“If you come new into the industry and you have no previous experience, it does take time to become confident and proficient, even after you've done your diploma as an MFAA member,” Pannek said. “When you take all that experience and elevate it even further through tertiary-level education, it's not about creating two tiers, it's offering a pathway.”
Broking industry shows a united front
Like the MFAA, the Commercial and Asset Finance Association of Australia (CAFBA) is pushing to professionalise the unregulated side of the broking industry.
The stakes are different for CAFBA. As an unregulated market, the industry body has a duty to prove it can effectively self regulate the commercial lending space. Initiatives like CAFBA’s PACE Premium online education platform and diploma and Certificate IV courses are designed with this in mind.
But while CABFA and the MFAA represent different factions of the broking community, they work closely to elevate the standards of the industry as a whole.
Their relationship was cemented when they signed a Memorandum of Understanding (MoU) in August 2024 under the goal of “jointly nurturing and promoting a finance broking profession that adheres to the highest standards”.
Reflecting on that, Pannek said: “At the core of that MoU was really the shared value and perspective around how important trust is in our industry and how we can continue to elevate that trust.”
So with the broking industry placing greater emphasis on education and professional standards, does Pannek think these areas have been lacking in the past?
She denied that this is the case.
“When I think about what we're doing here, it's also foresight for us,” said Pannek. “We've been around for 40 years, we've always been focused on standards. In the industry that we're in, standards can't be set and forget.”
The close gaze of the regulators
As more Australians than ever before turn to brokers to help with their homebuying needs, “the regulator’s role is to continue to oversee the activity of brokers and consider how brokers are living and breathing their regulatory obligations”, Pannek said.
The MFPA “clearly demonstrates we're not a set and forget”, she continued. “We want to give further pathways to our members… to continue to lift the bar and the professionalism, the trust, the capability of brokers in our industry. I think that's really important. That's a big role of what associations do.”
Yet just like in any profession, a few bad actors can ruin the reputation of the broking industry – despite the profession being responsible for less than 0.5% of AFCA complaints annually (the banking sector, on the other hand, was responsible for more than 41,000 of the nearly 99,000 complaints received by AFCA in the 2024 financial year).
This is why the MFAA has an independent tribunal and disciplinary processes, we have a clear code of practice, and we're very proactive working with aggregators and all large licensees on potential and emerging risks,” said Pannek.
“The whole foundation of this industry is predicated on trust. As an industry, if there are emerging issues, we should address them proactively. This will ensure we protect and enhance the trust consumers have in this industry. If we don't, we know what's going to happen.
“That is so important when you've got a broker dealing with their client. That is a trusted relationship; they deal with so much personal client information, they deal with their client’s financial information, how much they get paid.”
Pannek pressed the fact that buying a home is probably the largest decision you will take as an Australian.
“So we need to preserve and, importantly, continue to enhance that trust. I see it as absolutely critical that standards are maintained and we're vigilant about that.”
