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Hi there, I am in the process of creating a mortgage broker business, with no intention of providing my own white label products. Since I am not providing my own loans, the credit decision is still the banks\’ responsibility. What would be more appropriate to me: hire a part time responsible manager to have my own ACL, or become a credit representative of a responsible manager with and ACL, or become a credit representative of another company that has an ACL? Many thanks
Hi Andre,
Thanks for the question.
You are correct in stating that you need to be either a credit representative of a licensee or hold your own credit licence, if you are to engage in credit activity. There are benefits, drawbacks and costs associated with each option. Whether you operate as a representative or a licensee comes down to a commercial decision made on your part. We can provide you with an estimate of the costs of applying for an ACL.
Please feel free to contact us if you require further assistance.
Author: Grant Holley
Co-contributors: Megan McMullan and Greta Walters
Thank you very much Grant for the information provided. I have already some estimates of how much would cost to apply to an ACL, but what I do not know is the cost of being a credit representative to compare with.
Thanks,
Andre
A credit representative may incur costs such as those required in becoming a member of an ASIC-approved EDR scheme such as the Credits and Investments Ombudsman (CIO) or Financial Ombudsman Service. A licensee may charge a fee for you to be an authorised representative under their ACL. You would need to comply with the licensee’s policies and procedures. You will need to make enquiries of prospective licensees in relation to costs.
The overall costs associated with being a credit representative are less than those required when applying for and maintaining an ACL.
Author: Grant Holley
Co-contributor: Greta Walters
