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Clash of rhetoric over fee-for-service

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Australian Broker | 29 Mar 2011, 05:15 AM Agree 0
Senior industry executives have disputed the value of a move to fee-for-service, with some damning the idea of "slugging" customers with another fee
  • Northerner | 29 Mar 2011, 12:31 PM Agree 0
    So why don't we offer the choice to our clients? They can choose a fee for service and/or a commission based remuneration for brokers. We can act as a brokerage tool to show them what's available and then broker the loan application. We could get commission for that. But as soon as we give advice or make recommendations a fee for service would kick in. That puts the client in charge and we get paid what we are worth. We need to look outside the square and find a compromise that all industry players can agree on. It's no good having different opinions within the industry. We need to get our act together as a united force, so that everyone gets the picture.
  • oldBroker | 29 Mar 2011, 12:46 PM Agree 0
    I like the line "mortgage industry should work collaboratively to put greater pressure on major banks and lenders to increase their commission offerings". The lenders don't care about any pressure while the brokers only submit 40% of the total loans. Get that percentage upto 70-80% and the lenders will listen. It's simple supply/demand.
  • Phil | 29 Mar 2011, 01:20 PM Agree 0
    For a start fee for service should be commission free. So if the banks do not give a discounted rate because its commission free then scrub from the lender panel. If clients a getting better rate then over the long term they will be better off and less likely to churn. However most churn comes within the same bank, so if they are getting a wholesale rate the client would be less likely to refi. Some financial planners are doing fee for service purely to protect their clients from Bank churn. The only reason why AFG don't like fee for service is because how to they take their cut if the broker is charging the client direct.
  • Ozboy | 30 Mar 2011, 09:24 AM Agree 0
    It's my business (although, the lenders, aggregators and "industry" commentators would disagree) I will do what I like within the framework of the law. Between my clients and I how I am rewarded for what I do.
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