Cold water on fee-for-service debate

by Caroline Dann30 Jul 2012

A major broker has poured cold water on the fee-for-service debate, revealing prior initiatives have been put on the back-burner.

Earlier this year, brokerage Smartline began to look into the feasibility of fee-for-service or a 'no-go' fee for brokers.
However, managing director Chris Acret revealed the company has temporarily put the research on hold.
"We've had to put it on the back-burner: the cons were starting to outweigh the pros," he told Australian Broker Online.
His revelation comes after a heated debate over the fee-for-service model, which was sparked by research suggesting consumers already believed brokers charged a fee.
Acret did admit that a "healthier" business model was needed to ensure brokers were financially rewarded for hard work.
"We've been talking about it for six years. We need to look at why this service is largely free for consumers, and what would happen if all brokers charged?" he said.
"If commissions fall again, we need a contingency that everyone's happy with."
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  • by Country Broker 30/07/2012 11:10:17 AM

    can all the so called commentators and press just leave this issue on the table for the moment, that means stop talking about it, ASIC right now have other issues with other professional groups , ad so does Bill Shorten DO NOT MAKE THIS ONE OF THEM.

  • by 10 year Broker 30/07/2012 11:41:39 AM

    Commissions falling again, what 35-40% reductions is not already enough to satisfy the greed?
    This fee for service argument is just a smoke screen for banks to force as many brokers out of the industry as quickly possible.
    Do lenders really expect that we will refer them business just for fun?
    How would the likes of ING , Macquarie etc , maintain their market share. The only answer would be to collude and price fix commissions just as per June 2008 I guess

  • by iMac 30/07/2012 1:16:32 PM

    Brokers, If you want to cut your own throat then keep talking about Fee For Service (FFS). Banks would LOVE to do away with comm. They'd have a sales force that works for FREE. How good is that. By talking about it you give it life. So Shut Up about, get it off the table, and don't ever let it on again.
    The only fee that should be talked about is a 'No Go' fee for the broker. If the clients withdraws from the application process, or fails to disclose, Bang! Fee, equal to comm is immediatly payable. Put it in you Broker contract. Client respect it.