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Bonus commissions to be in firing line: FBAA

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Julia Corderoy | 16 Jun 2016, 08:00 AM Agree 0
Incentive-based commissions are also likely to face the axe under ASIC’s remuneration review, the FBAA has told brokers
  • Bj | 16 Jun 2016, 09:22 AM Agree 0
    So, if bonus commission and trail commission is banned, one would expect a flow on to the client in the form of a sharper rate. Waiting, waiting, waiting...
  • Albert Waldron | 16 Jun 2016, 09:39 AM Agree 0
    Steve Weston of Barclays in the UK thinks that the future of trail commissions could be a shaky, because according to Weston, Australia is one of the last markets in the world to pay trail commissions to mortgage brokers.

    I have three words for him Global Financial Crisis (GFC).

    The fact that trail commissions encourage and make the ongoing monthly service portion of the broker proposition viable and stop the need to be constantly finding new client to maintain business income should be the absolute key to why they should be maintained.

    Long term clients with the right loan, make for happy clients and consistent business income. If you take away the trail payments you inadvertently start to create an environment were brokers have to continually find new clients rather than looking to maintain there existing ones.

    I do agree that commission incentives are both a waste of time and a distraction from the service proposition of brokers. I would much prefer a set commission level regardless of lender to avoid perception that commission has anything to do with our recommendations and then have the lenders incentivise the borrowers with special offers or rebates of fees.

    I am also getting increasingly frustrated with Financial Planners who now 'refund' the lenders commissions to appear 'unbiased in their advice' but then charge clients a 'fee for service' that is well in excess of commission any lender is paying. I certainly hope this is not the direction the ASIC review sends us.
  • New broker | 16 Jun 2016, 01:17 PM Agree 0
    I wonder if internal incentives by banks to cross sell products to clients that are not needed and staff incentives being based on these sales will hopefully come under review too. Dont only go for the little people. Cross sales form part of their incentive schemes
  • OzBoy | 17 Jun 2016, 08:11 AM Agree 0
    "Incentive-based commissions are also likely to face the axe under ASIC’s remuneration review."

    I personally hope so. These "incentives" are normally hidden and only add ambiguity.
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