“He was basically saying we need to take a good, hard look at ourselves. If we don’t, we’ll just move blindly ahead – not knowing if what we’re doing is right or wrong. Of course, no one is perfect. We all make mistakes. But Socrates was reminding us that if we don’t examine ourselves, we’ll never be able to fix our mistakes. We’ll be doomed to continue treading the same path.
“It’s the same when it comes to our careers as real estate agents. We need to constantly be looking at what we do, how we do it and the value we add. We need to have a mindset of continual improvement. If we don’t examine ourselves in a professional context – individually and as a collective – and fail to take the necessary steps to improve and develop, we’re leaving ourselves open to disruption.
“Disruption only happens where value is being questioned – and consumers question the value real estate agents provide. We need to urgently address this in a way that provides them with the comfort of knowing they’re dealing with a skilled professional. Recognition as a profession will demonstrate that our members are ethical, educated and experienced not just because they say so, but because they have been examined and proven to have reached a defined professional standard.”
Examination of capability
The Professional Standards Councils, with its agency the Professional Standards Authority, is the independent statutory body responsible for promoting professional standards. They use the 5 Es to define the elements that are necessary to qualify as a profession (see box). Examination is the fourth E.
“It covers more than qualification or certification requirements, and it’s more than traditional tests. It extends into expectations of regular assurance,” Mr Cunningham explained.
“That assurance relates to standards of ethics, education and experience. When a consumer is dealing with a member of the profession, they can be assured that the professional meets the standards set down by the governing body – and not just as a one off, but on a continuing basis.”
Mr Cunningham points out that ongoing assessment of agents’ skills, knowledge and capabilities is something that is all but completely missing from the industry’s framework at present.
“Yes, to enter the industry you have to prove that you’re competent to perform the duties of an agent and you do this by undertaking a qualification course. And yes, agents are required undertake a miniscule amount of CPD each year. That’s it, that’s all – and unfortunately, there’s very little in the way of monitoring or policing by the regulator to ensure even these woefully inadequate requirements are being effectively met.
“Under a Professional Standards Scheme, agents will not only need to prove that they’ve been deemed competent at a given point in time, they will also need to demonstrate ongoing capability. They need to be able to show that they’re adhering to the standards laid down by the scheme.”
Mr Cunningham believes that the lack of professional standards, against which agents can be assessed on a continuing basis, is one of the factors contributing to the low opinion consumers have of agents.
“Our industry is split down the middle,” he said. “There are those agents who are working at an extremely high level. They have policies, systems and processes in place for everything they do. They do far more than the bare minimum when it comes to ongoing training. And they behave in an ethical manner in both their work and personal lives. Importantly, they are willing to be held to account on all these things.
“Then there are the agents who just ‘wing it’. They’re the cowboys of our industry. They don’t stick to the rules. Sometimes they don’t even know what the rules are, because they’ve done a quickie entry-level course and only ever do the bare minimum in terms of CPD. In some instances, it may not even be deliberate. They simply don’t know what they don’t know.”
The end result, Mr Cunningham explained, is a bad consumer experience.
“It’s these agents who are doing incredible damage to our reputation as a collective. Consumers just lump us all into the same ‘dodgy’ basket. Good agents have nothing they can point to in order to prove why they shouldn’t be in that basket.”
Mr Cunningham said that for consumers to be able to differentiate between good and bad agents, there must be a tangible means of differentiation.
“A Professional Standards Scheme, where ongoing examination is a requirement, will provide that tangible means of differentiation,” he said. “It becomes more than an agent waxing lyrical about the fact that they’re ethical, they’ve undertaken certain education and have a particular level of experience. Any agent can say that, even if it’s not true. But professional examination will require them to prove it on an ongoing basis.”
The ability to show that certain standards are being met by member agents is critical, Mr Cunningham emphasised.
“An approved Professional Standards Scheme is a legal instrument that’s binding on the relevant member association. For real estate, that association will be the Real Estate Institute of Australia. Working with the State and Territory REI’s, REIA will be legally bound to monitor, enforce and improve the professional standards of agents across the country as part of a commitment to deliver consumer protection.
“How do they show they’re doing this? Through the examination of member agents.”
Setting the standards
REINSW is currently consulting with agents to determine what our defined standards should be for the purposes of a Professional Standards Scheme.
“The Think Tank on 12 July 2017 and the Industry Summit on 1 September 2017 have seen us engage with agents from all levels of the industry, from young up-and-coming agents through to industry stalwarts. We’ve also met with more than 1000 agents across 20 locations throughout this year’s Roadshow,” Mr Cunningham said. “This has given us a great start in process of crafting what our professional standards should be.
“The next step will be consulting with consumers. We need to know what their expectations are and at what level they believe agents should be acting.”
Mr Cunningham knows that participation in a Professional Standards Scheme will not be for everyone.
“There will be a proportion of agents who, upon examination, simply can’t or don’t want to meet the standards set down. But those who want to take the professional pathway and are willing to be held to account will reap the benefits.”