Almost anyone can become a mortgage broker with just 10 days of training, an investigation has found.
Consumer group CHOICE paid $695 to the National Finance Institute to complete an online course and discovered it was more about drumming up business for the big banks than looking after the needs of borrowers.
In Australia last year, mortgage brokers settled 57 per cent of new home loans, and continued receiving trailing commissions from the major lenders just for finding them customers.
Unlike financial advisers, mortgage brokers only need to obtain a Certificate IV in Finance and Mortgage Broking to practise.
CHOICE investigator Andy Kollmorgen said mortgage brokers were taught to focus on getting customers for the big banks instead of giving advice that was in the best interests of borrowers.
‘I took this course thinking it would focus on the finer points of how to find the best possible loan for the client,’ he said.
‘But the real focus was on sales and lining up clients for the big banks.
‘The training involved filling out real loan applications, which happened to be from none other than ANZ and Westpac.’
Mr Kollmorgen said trainees were given six months to complete the course with three tries for each section ‘including quiz questions that are often laughably simple’.
‘I became a mortgage broker in 10 days,’ he said.
Consumer group CHOICE paid $695 to the National Finance Institute to complete an online course and discovered it was more about drumming up business for the big banks than looking after the needs of borrowers (pictured is a stock image of an adviser)
‘There is a substantial amount of material to get through, particularly the sections focusing on sales, marketing and office skills. It’s all about drumming up business.’
Mr Kollmorgen said his experience of the course showed it was about being good at sales and overcoming the objections of prospective borrowers.
‘The bank will reward that broker or brokerage firm by way of commissions,’ he said in a CHOICE podcast.
‘Any time it’s a commission-driven business model, you’re being rewarded for selling certain products, you have an incentive to sell one product over another based on the size of the commission.’
CHOICE investigator Andy Kollmorgen (pictured) said mortgage brokers were taught to focus on getting customers for the big banks instead of giving advice that was in the best interests of borrowers. He completed the National Finance Institute’s course in just 10 days
In February the banking royal commission, led by retired High Court judge Kenneth Hayne, recommended the law be changed so mortgage brokers were required to act in the best interests of prospective borrowers.
Justice Hayne also recommended that trailing commissions be banned.
The federal government declined to act on this recommendation, despite Treasurer Josh Frydenberg earlier promising to implement all of the royal commission recommendations.
Mr Frydenberg in March instead promised to review trailing commissions in three years’ time.
Daily Mail Australia contacted the National Finance Institute in Brisbane for a response.