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Broker education: making history or stuck in the past?

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The agreement on broker education between the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and the National Insurance Brokers Association (NIBA) was a long time coming.

Talks began in March between the two industry training providers, and there was real concern the year would end without an outcome.

But ANZIIF and NIBA knew failing to reach an agreement was not an option. Criticism had been simmering for some time that it made no sense for the two industry bodies to compete with each other – let alone with private providers – in the broker education market.

The issue came to a head when industry doyen Martin McAvenna delivered an impassioned speech at the Austbrokers & IBNA Members Services conference in Barcelona in April, calling for broker education reform.

Mr McAvenna raised two concerns: that education providers were not giving brokers the skills for a vastly changing marketplace in which “disruptors” would transform their role; and ANZIIF and NIBA being in competition, which was inefficient, in some cases “duplicative” and in others inconsistent.

NIBA also faced the argument that it could be a training provider or it could be an industry lobby group – but it couldn’t be both.

Last Wednesday ANZIIF and NIBA finally struck an agreement, and it’s clear both organisations have taken the criticisms on board.

The most prominent outcome is that NIBA will bow out of providing industry training. Instead, ANZIIF becomes NIBA’s preferred supplier of broker education “with immediate effect”.

The two bodies are styling this as a “historic partnership”, as is the fashion with such announcements. PR hyperbole aside, the agreement certainly marks a significant turning point for NIBA.

The agreement marks the beginning of the end for NIBA College, the training arm started in 1995. The association will also give up its status as a government-authorised registered training organisation (RTO).

NIBA College will take no further enrolments for its qualifications, training and continuing professional development programs, and current students will have until September 1 next year to complete their studies.

Giving up the college after 20 years would not have been an easy decision for NIBA. But insuranceNEWS.com.au understands NIBA College had ceased to be the cash cow it once was for the association.

On this point NIBA CEO Dallas Booth would say only that “the financial position was one of the things the NIBA board took into account in making its decision”.

The broking sector has good reason to welcome this decision. It means the body representing it will in future be 100% focused on challenges facing the industry, including a rapidly changing marketplace and a regulatory environment seemingly in a constant state of flux.

“At the end of the day there was a strong view that our focus should be on industry representation and that was at the forefront of our thinking,” Mr Booth told insuranceNEWS.com.au.

“Twelve months ago the NIBA board conducted a review of NIBA’s goals, priorities and direction. That included interviews with industry leaders and the membership, and the net result of that feedback was that we should be focusing on our core role.”

The agreement will enable NIBA to focus on member services, lobbying and representation. However, it will continue to play a role in education, with involvement in professional standards.

“Quality education and training will remain the foundation on which professionalism in insurance broking is built,” Mr Booth says. “NIBA and ANZIIF will work closely to ensure education meets the needs of today’s brokers, while also preparing them for the challenges that lie ahead.”

But why make ANZIIF its preferred supplier? Why not leave the market to its own devices?

Mr Booth defends the preferred-supplier model. He argues it’s precisely because of NIBA’s commitment to quality education that the partnership with ANZIIF is important.

“NIBA’s No.1 commitment [to our members] is representation. Our No.2 commitment is to professionalism, and the key to professionalism is access to world-class education and training. These are goals we share with ANZIIF because our interests are fundamentally aligned.”

The agreement between NIBA and ANZIIF is open-ended, but will be formally reviewed every two years.

Val Phinn, director of the Brisbane-based Financial Services School, has been an outspoken critic of what she calls NIBA and ANZIIF’s conflict of interest. She says they have played a dual role as RTOs while also advising Innovation & Business Skills Australia (IBSA) – the skills council responsible the qualifications framework for insurance brokers.

Ms Phinn says the agreement between NIBA and ANZIIF “doesn’t make any difference, nothing’s changed”.

“They can dress it up however they like, but I think the situation is worse – it’s even more of a conflict of interest,” she told insuranceNEWS.com.au.

“I’m disappointed that NIBA would align itself with one provider rather than remain autonomous. If it wants to improve the level of education in the industry it should be taking a step back and saying, ‘We’re going to work with everybody, we’re going to listen to all parties about their ideas for improving broker education.’

“The Financial Planning Association is not an RTO and it doesn’t align itself with particular trainers. That’s the model NIBA should be following.”

Ms Phinn has formed an industry-based committee that is preparing a “business case” to present to IBSA, seeking a review of the latest training package it approved on the recommendation of NIBA and ANZIIF.

Sheila Baker, MD of Melbourne-based training provider Gold Seal, recently joined Ms Phinn’s rebel committee in its quest for a framework that better reflects the broking industry’s training and education needs.

Ms Phinn and Ms Baker – along with several broker principals and the Council of Queensland Insurance Brokers – argue there has been insufficient industry consultation on competency standards, with small and medium insurance brokers in particular left out.

That’s a criticism rejected by Mr Booth, who argues that when the latest IBSA qualification framework was put out for industry feedback last year NIBA and ANZIIF were the only organisations to make submissions.

However, in what could signal an improvement in relations between NIBA and the small-medium broker community, Ms Baker has supported the NIBA-ANZIIF agreement.

“The agreement has got to be a positive move,” she told insuranceNEWS.com.au. “It can only further the cause of broker education. I can’t say that it was unexpected. Nor can I say that it’s not a positive move that NIBA has moved out of education.”

NIBA is conscious of the claims about lack of consultation in the development of the insurance brokers’ qualifications framework. But Mr Booth insists NIBA’s submission to the process was based on extensive industry consultation.

“NIBA has always consulted widely on the necessary competencies for broking. I’m very comfortable that our submission reflected wide consultation of brokers.”

The matter of industry consultation is clearly one NIBA and ANZIIF would like to put to rest. In announcing their agreement, they stressed the new partnership is “industry-led”.

It was informed by a “broker education forum” comprising representatives of Steadfast, Austbrokers, Insurance House Group, Marsh, MGA Insurance Brokers and Aon Risk Solutions.

The agreement also includes a commitment to produce a “major piece of industry research” into the broking industry’s skills needs, expected to get under way before March next year.

NIBA and ANZIIF are also keen to address industry concerns that the current education framework focuses too much on compliance issues at the expense of practical skills.

The agreement coincides with the launch of the ANZIIF “skills units”, which ANZIIF CEO Prue Willsford says are a “major reform of industry education”.

“The skills are FNS15-compliant and are designed to meet changes in the industry and to reflect the needs of brokers and business now and into the future,” she says.

“The teaching, resources and assessment will mimic real-life work scenarios and support professionals to be immediately effective in their roles. The new format will offer professionals the opportunity to undertake shorter, more concentrated units that allow them to up-skill quickly, providing immediate benefit to their businesses.”

She emphasises that the initiative has been “developed with industry”.

It all sounds reassuring as a tough year comes to a close and a new, probably even tougher one draws near.

Have NIBA and ANZIIF become more attentive to the needs of industry? Next year will tell. But if the answer is “yes”, it may indeed prove to be “historic”.