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​Trail portability would lead to commission cuts: Aggregator

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Australian Broker | 11 Feb 2014, 08:00 AM Agree 0
While brokers call on lenders and aggregators to allow trail portability, one aggregator has defended the lenders’ stance.
  • Raymond D | 11 Feb 2014, 09:02 AM Agree 0
    The trail portability 'promise' with Connective is a LIE - it's impossible and I have been scammed by these guys into believing them. I would like to see a history of any broker with Connective who has successfully ported their trailbook. It's a 'selling point' for Connective but definitely not true!
  • Dave Robinson | 11 Feb 2014, 09:19 AM Agree 0
    I can't believe it would be that difficult for a lender to transfer a trail book. Sure it might involve some cost upfront for the IT department to write the program but if they can do it for planners it shows that they CAN DO IT...if they choose. I for one would be more than happy to pay a fee (reasonable) to move my old trail books however as you can see from the above I think the sticking point is aggregators not lenders. I would love to hear from some of the 3rd Party Managers from the lenders in relation to their position. Something on the record would always be an interesting conversation starter.
  • Robin Wilkinson | 11 Feb 2014, 09:21 AM Agree 0
    What?! - the wealth side should change to the mortgage way of doing it!! Quote from Sale is "it is an absolute disaster". What rubbish have a mortgage and wealth business. If I change licensee on the wealth side the clients get a letter and the choice to move licensee's with me and I will continue as their adviser or stay at the current licensee. That's it - the list does not go on and on as stated above. The clients get the choice to move or not. The
    Outsource employee needs to check the facts before rubbishing a sensible system that works well for all sides in the wealth space.
  • Maria Rigoni | 11 Feb 2014, 09:30 AM Agree 0
    The lender accredited sub-contractor of an aggregator has no contractual payment arrangement with the lender. Trail is therefore not portable because the remuneration agreement is between the lender and the aggregator... and that's the way they like it!
  • Marty | 11 Feb 2014, 09:42 AM Agree 0
    With connective can't you just transfer to their comm split model (rather than flat fee) before you leave so you only pay $110 a month? Then get all trail ongoing as per existing. Cheaper solution right there than mucking around with the lenders
  • Glenn Lees | 11 Feb 2014, 10:13 AM Agree 0
    In response to Raymond D - I would be delighted to provide you with many examples of where trail books have been transferred. If there has been an issue in your particular case, I would be very keen to understand what it is, and if possible to assist you in fixing it.

    If you would like to discuss this with us directly you can call:

    Glenn Lees - 0408 688 200
    Murray Lees - 0419 155 203
    Mark Haron - 0439 099 099.

  • MelbBroker | 11 Feb 2014, 10:33 AM Agree 0
    It can't be that difficult. We have broker codes - couldn't be hard to link those to a different aggregator at the lender level.
  • oldBroker | 11 Feb 2014, 10:41 AM Agree 0
    Ms Sale is defending the current policy because she is an aggregator and interestingly accuses the brokers of not looking at the bigger picture when it is Ms Sale who is telling the brokers to accept the current trail policies because why? Because the lenders might reduce the comms and that it's 'hard'. Nonsense. Her message is self-serving. The current situation where the aggregator and lender have the contractual relationship is unjust and flawed. The relationship should be between the ACL holder and the lender. This will allow trail portability and direct payment to the ACL. The only issue is clawbacks and the legality of this needs to be challenged in court. Brokers cannot continue to be the only professionals to payback commission upon early discharge. This flawed policy is a direct result of the current aggregator/lender relationship to which Ms Sale is the benefactor not the brokers.
  • Patrick McMenamin | 11 Feb 2014, 10:50 AM Agree 0
    Tanya Sale is unsurprisingly "pushing the aggregator barrow". Like Robin Wilkinson I am both a financial planner and a mortgage broker. I have changed dealer group four times. In every case it is I who must write the letter to the client. The letter explains my commercial reasons for changing dealer group and that this means the entity ultimately legally responsible for the advice I provide will change. The client can do nothing and thereby retain me as their adviser or can elect to stay with the current dealer group and have a new adviser appointed. I have also changed aggregator 3 times. If I were able to transfer my trail books, the fixed fee option with Connective would be viable. That I am denied this option to choose which service supplier to use (for all my business not just my new business) is clearly a restraint of trade. I further note that I have an ACL. If I were to have an AFSL I could deal direct with most wealth product providers, even as a single adviser practice. However lenders will not deal direct, even those still paying me direct with respect to older trail books. Some lenders are paying me part direct and part through several aggregators. How can this be efficient? We know that all institutions use software to manage commission and I suggest it is simply a matter of changing the broker code (that is alter one field in my broker data base record) and all commisison would flow to one payee.
  • Tony | 11 Feb 2014, 11:02 AM Agree 0
    I was with a small aggregator for aperiod of time until this aggregator was bought out by another larger aggregator. I di not want to stay with the new aggregator and had my existing trail book moved to Connective. At the time, from what I understand, it wasn't the lenders that didn't want to do it, it was the aggregators.
  • William-WA | 11 Feb 2014, 11:35 AM Agree 0
    Aggregators don't want the trail mobile as they loose profit and its easy for the brokers to move.
    The lenders don't care a damn. That's what this is all about, all other "theories" are GARBAGE
  • oldBroker | 11 Feb 2014, 01:26 PM Agree 0
    Ms Sale is defending the current policy because she is an aggregator and interestingly accuses the brokers of not looking at the bigger picture when it is Ms Sale who is telling the brokers to accept the current trail policies because why? Because the lenders might reduce the comms and that it's 'hard'. Nonsense. Her message is self-serving. The current situation where the aggregator and lender have the contractual relationship is unjust and flawed. The relationship should be between the ACL holder and the lender. This will allow trail portability and direct payment to the ACL. The only issue is clawbacks and the legality of this needs to be challenged in court. Brokers cannot continue to be the only professionals to payback commission upon early discharge. This flawed policy is a direct result of the current aggregator/lender relationship to which Ms Sale is the benefactor not the brokers.
  • Brado | 11 Feb 2014, 02:22 PM Agree 0
    I don't understand why the commissions you earned in good faith with one aggregator should be handed to a new one, just because you have moved. I have moved aggregators 3 times, and still receive trail from them (except Aussie but that's a whole different story isn't it?) I cannot see how it is fair that if your aggregator was receiving trail as well, earned while you were a team, that you, the broker, can take that away. I am happy with the trail I still receive from my old aggregators and am not concerned that it isn't all with my current one.
  • SIDBROKER | 11 Feb 2014, 03:00 PM Agree 0
    We would not need to be controlled by agregtators if the banks would pay us direct.
  • Tony | 11 Feb 2014, 03:05 PM Agree 0
    Brado, have to disagree a little with your argument. I have worked with a few aggregators and very few see your relationship with them as a "Team" environment. They are there to make a profit from your work.

    Some supply a good level of service, some supply an ordinary level of service. Some like Connective actually work with you to help build your business.

    Why would you be looking at moving aggregators if they supplied you the tools etc. to run your business.

    If they are not supplying you with the correct tools and support needed to run your business properly, or you joined them with the promise of leads etc. that never eventuate, why should they keep part of your hard earned trail.
  • The Observer | 11 Feb 2014, 03:28 PM Agree 0
    1. The best weapon for brokers is to focus on the main game which is to have a relevant proposition for your clients. This will make you an attractive proposition for your clients. Also, lenders will seek your business.
    2. We need to lose the fear and take on the confidence that brokers are a significant channel for lenders; and for some lenders, the only channel. We should not feel that we are dependent on lenders that seek to earn the most income they can for their shareholders (this is the reality for most businesses other than charities)
    3. As for aggregator models, the early models are different to the later models like Connective that has the built in freedom. Raymond D's comment is concerning and I am glad to see the Connective Director's response and I watch with great interest.
    4. As for people wishing to move aggregators, they really should also be the ones funding the administration costs including providing bonds for any clawbacks.
    5. I know about the financial planning model of moving and I really don’t know why we are different given the financial planning model was before and the inspiration of our broker model. This is especially now the case with licensing that is supposed to be in the consumer interest. It follows that the consumer should be able to choose the broker they wish to deal with. Any brave soul that stands in the way may have difficulty with their defence.
    6. We forget that the agreements between lenders and aggregators are between them and not brokers. Our agreement is between the aggregator. This could be a legal issue somewhere down the track for the simple reason that the brokers and lenders work together and issues could come out of this relationship yet we have no direct contractual agreements between ourselves. For this reason, I do feel that the lender, aggregator and broker contractual relationship is flawed.
  • Colin Rice | 11 Feb 2014, 04:16 PM Agree 0
    Lack of service my be a given from banks in general but what I find most disturbing is the lack of advice and even worse the bad advice that is given particularly in relation to contamination of deductible and non deductible debt. In regards to the subject at hand if it is possible for planners to switch then would be possible for brokers but understand why there is resistance from those who will profit the most.
  • Papery | 11 Feb 2014, 05:54 PM Agree 0
    Ill weigh in..... if your client is aware that you receive trail payments (bec you have to fully disclose) & BTW is supposedly paid in recognition by the Lender that you do actually manage the relationship post settlement, & will do so regardless of whatever ongoing Aggregator Relationship you choose (& which most clients dont understand anyway), as a Broker if you choose to exercise your right as a business owner to pursue change, like the Aggregators & Lenders can, why the hell is our income & cash flow shanghai-ed in the process & we are penalised so much??

    The client can do nothing about it, as a Broker you cant do much about it. The only way to get fair remuneration is to charge fee for service & we all know how clients (& Most Brokers) feel about that..
  • Maria Rigoni | 12 Feb 2014, 09:27 AM Agree 0
    The current broker model has been established via lender and aggregation negotiations.
    The remuneration is for the introduction of 'new' business; that is why brokers do all the restructuring of existing business for the lender for no pay.
    Brokers are not paid trail to keep in touch with the banks client after settlement. Once a client is introduced the deal is done, then it is up to the broker to keep the client loyal to them-self and retain the relationship for future lending proposals.
    The accreditation system is a real problem as it allows the banks to manipulate individual brokers which was not part of the original game play.
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