Written byThe Mortgage and Finance Association of Australia (MFAA) is the peak industry body for mortgage and finance brokers, aggregators and lenders, which sets membership standards and represents the broking profession.
Also known as: MFAA, Mortgage & Finance Association of Australia, Mortgage and Finance Association of Australia, MFAA accredited broker, MFAA member
Key points
- The MFAA is an industry association, not a regulator: ASIC licenses brokers, and the MFAA sets standards members accept on top of the law.
- Membership requires industry qualifications, yearly continuing professional development, a licence or credit representative status, AFCA membership and professional indemnity cover.
- Most aggregators and many lenders make membership of the MFAA or FBAA a condition of a broker's accreditation.
- MFAA research tracks the broker channel's share of new home lending, which has sat at roughly three in four loans in recent years.
What the MFAA does
Founded in 1980, the MFAA represents more than 16,000 members across mortgage and finance brokers, aggregators, lenders and industry partners. Its work falls into four areas: advocacy with government and regulators on issues such as remuneration, licensing and the best interests duty; education and professional development for members; research on the broker channel, including its quarterly reporting of broker market share; and consumer campaigns promoting choice and competition in lending.
Members sign up to a code of practice and a disciplinary process. The MFAA can suspend or expel a member for misconduct, though it cannot award compensation or cancel a licence, which are matters for AFCA and ASIC respectively. Its events and awards also make it a large professional network, which is where much of its practical value to a broker lies.
MFAA membership and what it signals
Membership is voluntary in law but close to mandatory in practice. The MFAA requires the Diploma of Finance and Mortgage Broking Management, above the Certificate IV minimum ASIC expects, for its accredited broker grade, a set number of professional development hours each year, an Australian credit licence or authorisation under one, membership of AFCA and professional indemnity insurance. Most aggregators write membership of an industry association into their agreements, and lenders ask for the member number when accrediting a broker.
For a customer, the MFAA accredited badge signals that the broker has met those standards and is answerable to an association as well as the regulator. It is not an assurance of good advice. The legal protections, including the best interests duty that binds mortgage brokers on all consumer credit they arrange, and access to AFCA, come from the law and apply whether or not the broker is a member.
MFAA, FBAA and asset finance brokers
Australia has two general broker associations, plus the Commercial and Asset Finance Brokers Association of Australia (CAFBA) for commercial and equipment finance specialists. The MFAA grew out of mortgage broking and remains the larger body, while the Finance Brokers Association of Australasia has traditionally drawn more of its members from commercial, equipment and vehicle finance. Both are recognised by aggregators and lenders, and a broker can belong to either or both.
A mortgage broker moving into car and equipment finance keeps their MFAA membership and adds asset finance accreditations with the relevant lenders through their aggregator. Asset finance training counts toward the annual professional development hours, and lender BDMs run much of it.
Example
A mortgage broker in Parramatta decides to write car and equipment finance for the small business owners already on her books. Her aggregator agreement requires her to remain an MFAA member with her professional development hours up to date, and each asset finance lender's accreditation form asks for her member number, her credit representative number, her professional indemnity certificate and her AFCA membership. She completes an asset finance course that counts toward her yearly hours, sits in on a lender's product training, and within a month is accredited with three lenders. Her MFAA listing now shows commercial and asset finance alongside home loans.
Not to be confused with
- Finance Brokers Association of Australasia (FBAA)
- the FBAA is the other broker association, historically stronger in commercial and asset finance, while the MFAA grew out of mortgage broking
- ASIC
- ASIC is the regulator that issues credit licences and enforces the law, while the MFAA is a voluntary industry association
Frequently asked questions
Do brokers have to be MFAA members?
Not by law. Brokers are licensed by ASIC under the National Consumer Credit Protection Act, and a broker can operate without joining any association. In practice most aggregators and many lenders require membership of the MFAA or the FBAA as a condition of accreditation, so almost all working brokers belong to one.
What does MFAA accredited mean?
That the broker has met the association's membership standards: a qualification above the legal minimum, ongoing professional development, a credit licence or authorisation, AFCA membership, professional indemnity insurance and agreement to its code of practice. It is a professional standard rather than a legal one, and complaints about advice still go to AFCA.
What is the difference between the MFAA and the FBAA?
Both are national broker associations recognised by lenders and aggregators. The MFAA is the larger and has its roots in mortgage broking; the FBAA has traditionally represented more commercial, equipment and vehicle finance brokers. Their codes are similar, though the MFAA sets a higher entry qualification, and brokers often choose on the training and network on offer.
Can I complain to the MFAA about a broker?
You can report a member for breaching the code of practice, and the association can discipline or expel them. For a dispute about a loan, the broker's advice or a loss, the complaint goes to the broker first and then to AFCA, which can order compensation. Licensing breaches are reported to ASIC.
Related terms
Broker
A broker is a licensed intermediary who connects borrowers with lenders, comparing finance options across a panel of lenders and submitting applications on the borrower's behalf.
Read definitionAggregator
An aggregator is the organisation that sits between finance brokers and lenders, giving its broker network access to a lender panel, technology, compliance support and commission processing.
Read definitionAustralian credit licence (ACL)
An Australian credit licence (ACL) is the authorisation from ASIC that a business needs to provide consumer credit or credit assistance under the National Consumer Credit Protection Act.
Read definitionAustralian Financial Complaints Authority (AFCA)
The Australian Financial Complaints Authority (AFCA) is the free, independent body that resolves disputes between consumers or small businesses and the lenders, insurers and financial firms they deal with.
Read definitionBest interests duty
The best interests duty is a statutory obligation requiring financial advisers giving personal advice and mortgage brokers arranging credit to put the customer's interests first.
Read definitionCommissions
Commissions are payments a lender or product issuer makes to a broker, adviser or referrer for arranging or servicing a financial product, paid upfront, as ongoing trail or both.
Read definitionGo deeper
Sources
This article is general information only and is not financial advice.