A major topic of last week centred on comments a major aggregator head, Connective principal Mark Haron
, made at an Independent Finance Brokers Forum meeting.
Haron took aim
at bank-owned aggregators pushing their own products on their broker networks, and said the resulting conflict of interest could have serious ramifications for the industry.
This creates a conflicted situation where the aggregator gives the broker reduced aggregation fees or no aggregation fees for writing more of that particular owner's business, he said.
Haron said many brokers are not effectively disclosing such conflicts which is a breach of the NCCP and could result in commissions being taken away.
But brokers commenting on the article did not necessarily support this view, and wondered whether Haron was trying to undermine competitors.
“Someone comes out with a product, that's cheaper than yours and you cry foul. Don't get me wrong, fundamentally your agreement is sound, you’re just the wrong business to start the discussion,” SanityPrevails
pointed out there is no conflict of interest as long as the broker stated upfront who owned the aggregator. “The [bank-funded] products are very good with good features, good fee structure and sharp interest rates.”
wondered why banks have been allowed to own aggregators in the first place. “Isn't that contributing to conflicts of interests??”
However, Comment of the Week went to Darren
, who worried about the removal of commissions:
“I have recently started in this industry and there are a large amount of articles and industry talk about reducing and removing broker commissions. Is this just attention grabbing news or a sign of the continual world wide removal of the opportunity for small business and continual grab by the world wide monopoly companies controlling everything???? In the 80's my commerce teacher taught how we never wanted to see a world full of monopolies but it seems that that teaching has been forgotten. The small business provides opportunity to those who want to work and personal service to customers who want it. These are things that are not easily achieved by monopolies but are easily achieved by small business. It’s true everyone needs regulation but please don't remove broker commissions.”
Read the article and more comments here.