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Fee-for-service could make brokers seem 'greedy'

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Australian Broker | 21 Apr 2011, 06:30 AM Agree 0
Fee-for-service could be used against brokers to portray the third-party channel as 'greedy', an aggregator believes
  • Ozboy | 21 Apr 2011, 09:22 AM Agree 0
    Is it still April 1? I am surprised that the CEO of an aggregator would think that the service provided by a Mortgage Broker is the same service you get at the bank. If her brokers offer the same service as a bank I would suggest they get out now. Oh and if a lender or aggregator ever had the audacity to say brokers are greedy I would either hold up a mirror or refer to pot's and kettles. Other commission income streams are not the future if anything they are the past. I think it's time some of our industry leaders started retiring and letting some fresh and young idea's make their way through to the top.
  • BONED | 21 Apr 2011, 11:13 AM Agree 0
    Such a tough one isn't it?! Ultimately, i wonder why anyone would come to a Broker if they got the same 'service' (ie a Home Loan) from a Lender for free! You can spruik about the level of service is higher from a Broker than a Lender, but in the main, is it? No doubt some do it very well! But if everyone did it well, then we wouldn't have to worry about Conversion/Quality Metrics would we?! So I would envisage that your 'better' clients would perhaps just roll up to a Lender and get what they want/need, and we'd be left with the dribs & drabs that got knocked back - that's fine if that's your business, but I much prefer the former! You can argue that those 'better' Clients would see the benefits of a GOOD Broker, but bottom line is... times are tough, and every dollar counts! So you can take your chance charging a 'fee for service' - in fact I welcome it! It just means that when they find out that I DON'T charge a fee, it shouldn't be too hard to win the business... Think carefully about what you wish for!
  • Phil | 21 Apr 2011, 11:23 AM Agree 0
    Fee for service needs to be a replacement for the minor commission levels. GREEDY aggregators need to negociate commission free wholesale products. Because just like the financial planning industry the issue will be forced on them. By that time the banks after their government lobbying will make sure the broker channel is dead. This is the second Aggregator that has come out to slam fee for service, rather that working with its members that want it. We guess what the brokers will do it themselves.
  • Jeff Mazzini AAMC Training Group | 23 Apr 2011, 03:03 PM Agree 0
    Fee for service model being introduced in the Financial Planning arena created a lot of fear and uncertainty when first mooted but slowly many are now moving to this model.Understanding that this model sold correctly to clients is being well received and many planners are now achieving a greater price when selling thier business as new buyer know what annual income fees will be. Yes with every new change comes uncertainty but time heals all and changes do happen.At the end of the day the clients will choose to deal with the person that provides them the professional level of service required. What is causing issues with the fee for service model with planners is that the fee its not tax deductable but to receive advice or a service from their accountant is, so there in lays the real issues to this debate.If Your Unique selling proposition (UPS) to the clients is strong enough, they will deal with you before any lender.
  • Eve | 27 Apr 2011, 11:34 AM Agree 0
    Whilst there is an argument to all topics, the fee for service/advice to Mortgage Brokers is easily mis interpreted in media circles thus reflective on public opinion & rot sticks. This is not an argument I would like to be played around with in light of recent Government legislation & it’s effect on the strengthening of the Big 4/5. The argument would weaken our industry & it’s offering despite the fact that Lenders provide the dollars requested by prospective Borrowers, the Mortgage Broker is able to provide the platter of choice which they can not.

    Think about it. Whilst the cries of consumers indicate that they are being slogged at all levels (Electricity, Food, Fuel etc etc), Lenders are falling over themselves to buy market share with various discounts which has borrowers feeling that they have some form of windfall & priority rather than scratching their heads about cost of funds & record profits. Were we not advised by Lenders that Upfront & Trailing commissions were reduced to compensate for caution & cost of funds? With the return of confidence, do we not then lobby our lenders to reinstate what was? If not, why not? Could the powers that be prefer the shortfall is actively discussed in the media & pursued by the Broker from the Client? Surely it would serve to weaken a channel. It’s an odd relationship when one business can feed another yet it would appear undermine it at the same time.
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