The PPSA. What’s in it for me?
The team at COG Aggregation has seen increasing issues amongst our network regarding understanding and complying with the PPSA (Personal Properties Security Act) in order to protect customers and meet lenders’ requirements.
To support our brokers, we’ve partnered with PPSAdvisory to bring you informative articles that dive into common PPSA issues.
We hope you enjoy our second insightful blog from PPSAdvisory on why PPSA should matter to brokers. Happy reading!
Why your client’s compliance with the PPSA should matter to you.
Despite having been with us since 2012, the PPSA remains a mystery to many, including those who should be complying with it, and even those who are complying are often uncertain whether they are doing so correctly. This is particularly relevant for equipment hire and rental businesses. So, if you have clients who rent/hire or simply provide their equipment to their customers, who’s helping them with their PPSA compliance?
It won’t be their accountants or business advisers; most don’t have a clue. Very few lawyers are advising on the legislation and even then, they are unlikely to have the practical knowledge of its application in the real world. The reality is very few users of the PPSA have had any professional advice or training on whether they should comply, let alone how they should comply. For most, it’s a DIY project (and in our extensive experience, the vast majority are getting it wrong).
Finance Brokers need to champion PPSA
Whilst you’ll appreciate the critical need for clients to register their interest in their gear before hiring/renting or providing it to their customers, do they? Who’s one of their most trusted advisers? You are. It’s more than likely you are the one external professional adviser who spends more time with a client than any other adviser.
Reasons to step up
So, why should you step up? What’s in it for you to help your clients understand the PPSA and its importance for their business?
1. Avoid Settlement Delay
With financiers becoming increasingly concerned about the adoption of the PPSA, your client’s compliance with the Legislation could avoid any delays in finance settlement caused by a financier’s requirement to comply. We’ve had to provide a One-Off registration service for just this issue, where an equipment financier requires a broker’s client to perform a PPS registration as a condition of settlement. Where the situation involves the sub-hiring of equipment and/or the use of asset protection structures, the settlement delay can be long. Consider also how equipment financiers would view brokers who take proactive steps to inform their customers about the PPSA and their need to comply.
2. Strengthening Client Relationships
By going the extra mile to educate clients on the PPSA, brokers can establish trust and demonstrate their commitment to a client’s financial security. This is an opportunity to develop stronger, long-term relationships with clients and potential referrals from them. We support many brokers and have experienced first-hand the value and gratitude their clients have expressed when receiving PPSA support and advice.
3. Enhanced Professional Reputation
Being proactive in discussing and explaining the importance of the PPSA can position brokers as knowledgeable and professional experts in the industry, enhancing their reputation and potentially attracting more business.
4. Protection Against Loss
And of course, the most obvious reason is simply to help your clients avoid financial loss. It goes without saying that the critical issue for your clients is the registration of their interest in the equipment they provide to their customers. In cases of their customer’s insolvency, registered security interests ensure your client recovers their equipment from their insolvent customer. Unregistered security interests will either be lost or subject to higher-ranked secured creditor claims, and very likely resulting in the loss of your client’s equipment.
5. CYA
And it doesn’t hurt to Cover Your A..! How would your client react when they learn they will lose their equipment to an insolvent customer and that you were aware of the risk but did not advise them, or at least make them aware of the PPSA?
So, the answer to the WIFM question is simple; helping your clients understand their PPSA obligations can avoid settlement delays, improve your standing with your clients and your broader reputation, and at the same time protect your clients from financial loss whilst also covering your backside.
About PPSAdvisory
PPSAdvisory supports many finance brokers and their teams, providing professional development training and support on the PPSA. We provide brokers with informational resources, workshops, and seminars so that they, in turn, can efficiently educate their clients.
We also improve the brokers’ own understanding of the PPSA and its application. And best of all it’s a free service we offer to all brokers.
If you are interested in booking a place in the 2025 PPSA PD Program, just email [email protected] and we’ll send you details of the program.