(03) 9020 2905Every now and then you just want to applaud a gutsy move. Someone who does something against their own interests in the name of helping someone else.
Examples would include Mel Gibson helping buddy Danny Glover off a booby-trapped dunny in Lethal Weapon 2 and the late Patrick Swayze taking on the job of cleaning up the hooligan-infested bar in Road House.
But that’s Hollywood, where they literally make that stuff up. In the corporate world, heroic acts are usually a little less dramatic. George Lucas would struggle to sex up most boardroom decisions into interesting viewing.
When a business does something that will hurt itself in the name of protecting consumers, awards should be given.
In the award category for “Corporate: Worthy (but dull)”, you could enter last week’s decision by the Mortgage & Finance Association of Australia to delist 1500 of its own members. (If the MFAA had have actually killed them, Lucas would have had contracts signed by now – The MFAA Strikes Back.)
The MFAA simply withdrew their memberships, because those members had not completed formal accreditation, known as a Certificate IV. Members were warned in 2007 that they had until mid-2009 to complete this course.
By no stretch of the imagination is this a difficult piece of paper to obtain. A mortgage broker colleague told me most industry practitioners could complete it in a matter of days. As far as setting a bar goes, the MFAA’s minimum qualification is like asking members to step over a stick that’s lying on the ground.
(So, I’ll have to disagree with MFAA chief Phil Naylor. Phil said that he “makes no apologies for setting the bar high when it comes to professional standards”.)
The MFAA will have to repeat this process in a few years, when it raises the minimum educational standard for membership to a diploma.
The decision culls a little more than 10 per cent of that group’s 13,000 members. While it will by no means be the case, let’s assume for a minute that the MFAA has ditched the laziest, worst performing, or dodgy mortgage brokers from its ranks.
How good would that be? Tens of thousands of Australians rely on mortgage brokers every year to fund the biggest purchase most will ever make (their home), plus investment properties and business loans.
You go to a mortgage broker because a home loan is a huge financial commitment and you don’t want to stuff it up. Not wanting to stuff things up is pretty much why you go to see any professional.
How much more confidence would you have if the industry body who looks after them was just able to execute, metaphorically, the dodgy brothers?
If you cut the worst 10 per cent of mortgage brokers, the normal distribution of these things would probably suggest that you’d cut about 30-40 per cent of the complaints about the industry.
Every industry has got its bad eggs. Just as there are bad mortgage brokers, there are corrupt cops, sleazebag lawyers, dodgy doctors, lying real estate agents and terrible tradesmen. For different reasons, plenty of fashion designers should be jailed.
Imagine the service improvement if we licensed bar staff. And let’s not ignore my two industries – there are financial advisers who shouldn’t have a licence and journalists who should never have been let loose around facts.
If you’ve got a big workplace, look around. What if you could get rid of the worst 10 per cent? (You can’t get rid of him/her just because you slept with them and it didn’t work out and now it’s uncomfortable.)
Apart from having a significant impact on the unemployment queues, most industry chiefs would probably love to have the power to get rid of the bottom 10 per cent.
The MFAA’s expelled members can get back in if they complete the course by October 31.
Not all industries have minimum entry standards. But those industries whose practitioners are dealing with investing other people’s money certainly should.
A piece of paper doesn’t mean that a practitioner is going to be better than one without it. Educational qualifications largely just show a willingness to learn.
Most industries are constantly changing and those who willingly keep on top of their industry’s changes are far likely to be better to deal with than those who don’t.
As consumers, minimum qualifications are one of those questions you should ask of professionals before you deal with them. In the meantime, let’s thank the MFAA.
Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and a licensed financial adviser. bruce@debtman.com.au