In general, Finance and Mortgage Brokers may perform the following duties; 

• Prospect for new clients and referral partners; 
• Assist clients in obtaining loan or lease options that are ‘not unsuitable’ to meet their finance requirement/s by assessing their needs, eligibility and capacity to service the required debt; 
• Research, present and negotiate suitable products based on the information presented to meet their clients’ requirements; 
• Assist clients requiring further products and services by linking them to the required product or services provider, such as personal protection insurance or financial advice; 
• Apply for the loan/lease facility with the chosen lender on behalf of the client, monitor the progress of the application through to settlement; 
• Provide client after-care service to their clients; 
• They may also start or own a business, which will involve the day-to-day tasks required to set up and manage the business. 

When the client has selected a product that suits their lending requirements and goals, the broker will lodge the loan/lease application with the chosen lender with whom they will need to be accredited (often via their Aggregator/licensee). The broker’s role is to ensure that the loan/lease is managed through to settlement, maintaining contact with the client and ensuring the client is satisfied with the service provided. The broker may earn a commission from the lender and/or charge a fee for their service. The commission may be paid via their Aggregator (licensee), who may take an agreed % of this money and pass the remaining amount to the broker. For example, a mortgage loan commission is often made up of an upfront payment, which can vary between 0.5% and 0.7% of the loan amount and a trailing commission of between 0.15% to 0.25% of the loan amount (paid over the life of the loan) whilst the broker is still managing that loan for the client. Commissions may cease if the client refinances their loan without engaging the broker or they pay it out in full. Payments may vary between lenders, and clawback may apply when a client terminates the loan early, usually within the first 24 months. 

A Finance broker’s potential earnings will depend on the size and number of loans they settle.  Aggregator Partnership or Business Development Managers may assist new to industry brokers with strategies on how to achieve a desired level of income. However, like any business it is up to the individual to realise their own goals.

Mortgage Brokers generally assist clients in acquiring loans to purchase, build or refinance residential property for owner occupation or investment.    

Finance Broker is a broader term used by industry but can mean the broker’s main source of business is assisting clients to acquire loans and/or leases to purchase assets for business and personal use, such as equipment, motor vehicles, and business equity. They may also assist clients in acquiring home loan finance.

The finance and mortgage broking industry is regulated by the Australian Securities and Investment Commission (ASIC). The Certificate IV in Finance and Mortgage Broking is the minimum requirement for business professionals who provide retail consumer credit advice (for consumer loans). They must become accredited under the National Consumer Credit Protection Act (NCCP) and hold a Credit Representative status (CR) under an Australian Licence Holder (ACL). Finance Brokers that do not offer consumer credit advice will not be required to hold an ACL or become an ACR of that licensee. 

An Aggregator is a true business partner offering new to-industry brokers to start their journey with confidence. New-to-industry brokers must become licenced as a credit representative under the Aggregator’s credit licence. Aggregators provide business set-up guidance through an onboarding process. They also offer ongoing coaching, access to a range of lenders products via an accreditation process, loan lodgement and client management platform, broker commission payments and a compliance framework to ensure the finance broker operates compliantly. Other services include marketing, business planning and operational support, client acquisition strategies, networking events and professional development. Their fees vary from a monthly fee to a percentage of commission earned.    

Industry associations advocate for the rights of those operating within the industry. They lobby the government to keep the industry fair and transparent for its members. Becoming a member of one or more industry associations is mandatory for many Aggregators. Membership provides benefits such as networking and professional development events, industry regulation updates, business support and professional development training.    

Finance Brokers offering consumer credit advice may be required to be mentored for a minimum of 24 months. Mentors work closely with brokers to ensure they proactively learn all facets of the role whilst ‘on the job’. The industry requires them to teach and coach their broker mentees, attend client interviews, and review loan applications before submitting them to the chosen lender. 

The AAMC Training team are more than happy to refer you to our industry partners for those who have yet to speak to someone in the industry. 

For further regulatory information regarding the National Consumer Credit Protection Act (NCCP), visit the ASIC website link here: National Credit Code | ASIC.