By Terry Moody – Director of Moody Kiddell & Partners, Board Member and Life Member of CAFBA, and Chair of CAFBA Education Council
We are living in a very different world now, and the way we do things and the plans that we have made have been turned upside down. Nevertheless, our common hope (and goal) is for business to eventually return to normal. And when this happens will we be prepared?
Only last year we were dealing with the Royal Commission, and this caused many brokers to reassess their business models, and the services that they offer. It was very pleasing that the Royal Commission found no underlying problems in commercial finance broking, but we like to think that this was no accident.
The Commercial & Asset Finance Brokers Association of Australia (CAFBA) has for many years set standards for its members that have a requirement for minimum education and adherence to Professional Standards. CAFBA’s professional standards address standards comparable to the best interests duty and we have applied them since their adoption in 2014. So, what is there to improve?
CAFBA’s research showed that expanded educational offerings can attract a new generation of commercial financiers for whom a credential is a necessary first step. Gen Y and millennials are attracted to a profession that offers a credential and structured career path. As we move to further professionalise the industry, having designated credentials recognises the education and professionalism of the commercial finance sector. In the aftermath of the Royal Commission and operating in a self-regulating industry, the need for a well-educated industry has never been more important.
It is CAFBA’s goal to expand the professional education program, which will be used to attract new and more diverse entrants to the profession by offering credentials and a structured career path into and through the commercial and asset finance profession.
CAFBA has therefore developed in conjunction with the Institute of Strategic Management accredited courses that are specific to commercial and asset finance. These are:
Education will be held up as proof of the industry’s ability to self-regulate commercial finance. The ultimate goal is to deliver the internationally recognised professional designation – the Certified Lease and Finance Professional – with post nominals (CLFP). Education will be the pathway to not only attract a younger and more diverse commercial financier into the industry, but also demonstrate the ability to uphold professional standards.
After the Royal Commission many residential mortgage brokers consequently looked to diversify into commercial lending, and whilst this makes sense it is important that in doing so, they have the skills and necessary training. Commercial finance is very different to consumer finance, and as the size of the transaction becomes larger, so does the complexity.
Commercial finance requires brokers to have the right education. Whilst the Royal Commission found no evidence of failure in commercial finance or with commercial finance brokers, it is incumbent on us in a self-regulating industry that this continues.
This includes ensuring lenders and aggregators only accredit brokers who write commercial finance have the necessary qualifications to do so.
There is no profession that allows people to practice without the right qualifications, and our profession should be no different. Having the right skills will result in us delivering the right solutions for Australian businesses.
The industry generally recognises that it needs to upskill, and lenders and aggregators are contributing to this by providing workshops and masterclasses to assist. And whilst beneficial these are only learning bites, and do not encompass the entire curriculum that is needed. Only formal and structured education will do this. That is why CAFBA has recently formed an Education Council to oversee the structure and delivery of the right curriculum to train the next generation. The Education Council, of which I am Chair, will include the lenders, the aggregators and other industry bodies to ensure we have a co-ordinated approach to education in commercial finance.
Whilst education might not seem a priority during this pandemic, things will eventually return to normal, and we will need more than ever the right people with the right skills to assist business to get back on their feet and to recommence growth.