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'Screws tightening' on brokers as FOFA encroaches: White

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Australian Broker | 08 Aug 2013, 08:00 AM Agree 0
FBAA president, Peter White, says a number of legislative changes could be on the horizon - and brokers would do well to prepare themselves
  • Peter Fast | 08 Aug 2013, 10:08 AM Agree 0
    Fee for service right now is dangerous. Just think about it. You get paid by the lender and you want the client to pay as well !! That is great ammunition for those out there to do to the mortgage industry what they have done to financial planning - destroy it. If you charge a fee for service keep driving the nail in your own coffin but do this please, let your clients know there are other brokers who are fair and don't need to be paid twice.
  • Cecil | 08 Aug 2013, 10:33 AM Agree 0
    As someone who has practiced fee for service in the financial planning area for some time the concept of fee for service in the finance area worries me. It would play into the hands of the majors who have a strong lobby in Canberra. Loans, like tax can be very transactional as online or in the bank arena. People, however, benefit from time one on one with advisors (independent??). Funding this on a fee for service basis has many obvious problems not the least asking people to part with their hard earned. Like our erstwhile leader's bungle on FBT recently. There is a great deal more to this than sitting in an office in Canberra and looking at a set of numbers - never having sat one on one with a real person!
  • Old Broker | 08 Aug 2013, 11:03 AM Agree 0
    Peter fast
    Yes you are correct in the view that 'fee for service' may cause the industry to be further legislated
    However ''fee for advice' if you market yourself as more than a broker who simply transacts the loan for the client and sells the bank concept of lowest interest rate
    Then ' fee for advice' becomes something to consider. Your experience -for me over 17 years has surely taught you something and smarter ways to advise clients. This information and experience is of great value and shouldn't be given away for the commission a bank pays which is really only a processing fee.
    So it depends on which broker you are?
  • Papery | 08 Aug 2013, 03:23 PM Agree 0
    I see the problem being one of interpretation, ie Fee for Service Vs Fee for Advise hard to quantify. The transactional side can be said to covered by the Lenders upfront payment, but the advise & Responsible Lending side of the equation not so easy... and what of the trail payments that diminish over time & can be affected by offset accounts, Aggregator handcuffs etc. Its not cut & dried & I dont think ever will be.
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