More thought needs to be put into the practice and implications of an industry move to fee-for-service, according to LJ Hooker Finance's general manager Peter Bromley.
Speaking at a broker panel discussion organised by PLAN Australia, Bromley said the whole industry move towards a fee-for-service or fee-for-advice model "needs more thought".
"I think it’s potentially a game-changing proposition, and I am a bit concerned when I hear so many people are charging a fee, and I don’t think we have thought it through," Bromley said.
With the industry having been founded on a proposition where the customer does not pay for their loan service, Bromley said charging a fee "changes that whole proposition".
"Do we know what our value proposition is going forward? I’m not sure we do. Because there are a whole raft of implication at all levels," he said.
Bromley said the industry needed to solidify ideas around what the new broker value proposition is, how that can be demonstrated and articulated, and what can be charged for.
The discrepancy between fee-for-service and fee-for-advice needs to be clarified, according to Bromley, as well as how much a broker should be charging for their service and advice.
"I think we have to get there, but I think we have to do a lot more work around it," Bromley said. "It has game-changing opportunities for us, as well as risks."
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