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Brokers must plan for commission erosion

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Australian Broker | 02 May 2011, 06:00 AM Agree 0
As commissions for financial planners are banned, FBAA president Peter White has said mortgage brokers must consider the possibility that a similar fate could befall the mortgage industry
  • Iris Wang | 02 May 2011, 12:47 PM Agree 0
    The government want more competition and the Brokers is good at creating that. Perhaps they cold look at regulated into a set commission amongst all banks & lenders so the customers don't have to pay a fee for service and the brokers will not pick one bank over another simply because of commission.
  • Observer | 02 May 2011, 01:05 PM Agree 0
    As usual, brokers constantly focus on their income stream rather than the services they should be providing to justify it. Get the service model right and it won't matter whether the remuneration is commission or fee for service. The service provided will be seen as worth it. The same cannot be said now for many brokers who are focussed on commissions, not service.
  • Brian Hastings | 02 May 2011, 01:09 PM Agree 0
    The Financial Planners were paid a commission dependent on their advice and based on their projected earnings. Mortgage Brokers are very different. we dont advise we provide what we think are the best options. a set brokerage fee would be a good solution.
  • countrybroker | 02 May 2011, 01:24 PM Agree 0
    Financial Planners are paid out of the earning that the funds invested return and or the management fee charges for that investment by the investment house.
    Finance brokers are paid by the lender from then LENDERS earnings. Also note the cleint is not paying a higher rate fro dealing with a broker , except if that broker is a mortgage manager, in those cases his rate must still be competative.
    Does Peter White understand the difference , ASIC hopefully will and have given no indication that they are even thinking about this.

    Really Mr White needs to stop talking about financial planners.
  • sidbroker | 02 May 2011, 08:51 PM Agree 0
    Peter White if you are right and i hope you NOT then there will not be enough brokers left to pay the FBAA fees which will see you out of a job. Better you speak blessings over the Brokers.
  • Ozboy | 03 May 2011, 09:31 AM Agree 0
    I would like to see the associations lobby Gov/ASIC to set up a commission based system that they are happy with. That will then takeaway the concerns that commissions will go. The FBAA states it has a unique position (compared to the MFAA) in where/how/who it lobby's, the question is; Mr White are you up to the task? Now that would be a feather in the associations cap and, dare I say it, stop all the whinging about the role of an association.
  • BONED | 03 May 2011, 09:49 AM Agree 0
    Just another reason why i don't belong to this mob nor the MFAA...! Seriously, do these guys know how/when/what to speak? As i've stated a million times, if any of you believe that any worthwhile Client is going to pay a 'fee for service' commensurate with the rates of Commissions currently received, better get your resumes ready now! Is not and will not ever happen... and if some reckon it does now, this would be akin to the those types that got suckered in to the 'pay your home loan off in 5 years' LOC/Budget Planning schemes... Yep, got to agree with 'SIDBROKER' - simply unsustainable!
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