TV: Will segmentation impact commissions?

by Ben Abbott21 Feb 2012

Segmentation may lead to more bank control over broker commissions, but top tier brokers say that the positives of preferential treatment outweigh the potential negatives.

On Australian BrokerNewsTV, we speak with Moshe Moses of Niche Lending, Daniel O'Brien of PFS Financial Services and James Green of Oxygen Home Loans on the pros and cons of segmentation.

Despite bank disagreement over the viability of these models, it seems top brokers are all for them.

"If you are giving a lot more volume than the guy down the road, you should get priority, that’s business 101," says PFS' Daniel O'Brien.

Likewise, Moshe Moses. "Segmentation has brought efficiencies for the banks, and likewise for us, but it has also given us a service delivery platform that we can provide to our clients," he said.

However James Green of Oxygen Home Loans said while it brings faster turnarounds on urgent deals, it can disadvantage some up-and-coming brokers within the same office as top tier brokers.

Moses added that commissions could be impacted. "Obviously segmentation brings along with it the issues of controlling of commissions. But then again it also ensures a service ability that we can provide to our customers, so at this current stage until the market does turn around it is one where there are positives and negatives towards segmentation as a whole," he said.

Watch the latest cutting edge Australian BrokerNews TV video on segmentation.

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