New refund broker claims cash back not a marketing gimmick

by Mackenzie McCarty06 Mar 2013

With his fee for service model in place, Morgan strongly disagrees that his refund offer devalues his work as a broker.

“If anything, I’d say the opposite if we are talking about a strict fee for service (no commission) arrangement.  I pay my doctor, my lawyer and my accountant a fee for service.  I can’t think of any profession that isn’t remunerated on a fee for service basis.  It is part of why the FOFA reforms for financial planners have been so broadly accepted at the highest levels.  They finally have the chance to become a profession instead of being seen as ‘product pushers’.”

In fact, he says, not charging a fee likely devalues what brokers do as the industry tries to perpetuate the ‘myth of a free service’. 

“It is demonstrably conflicted and not in the client’s best interests.  Clearly the government and ASIC agree - hence s160B of the NCCP Act.”

That said, Morgan believes there will always be a place for the traditional commission-based broker business model.

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  • by OzBoy 6/03/2013 9:42:45 AM

    Just bringing his income forward that's all. Don't know why he finds it necessary for some of the comments...perhaps it makes him feel better?!

    What about when St G/BOM/Westpac stop paying commission as they do for no reason, who will follow up the lender then?

    Clawback? From the consumer or from you?

    Another layer of complexity for the commission departments to deal with. Mmm interesting times ahead for all the admin departments.

  • by Mike Clarke 6/03/2013 9:46:39 AM

    I'm only going to say one thing. It's very much skewed to a 'transaction' based operation & not 'relationship' based. An 'adviser' can & does provide much more than just that one off transaction. Think value add.

  • by BONED 6/03/2013 9:51:28 AM

    'Commissions have to come from somewhere and the online lenders are putting gaping holes in the broker myth that ‘the lender pays our commission - so it doesn’t cost you anything’... I still can't get my head around comments like these! Lenders don't pay their staff Comm's so how do you explain accessing the same rate through a Branch. If Morgan's theory was true, then obtaining a loan via the Branch network would in fact be cheaper - but it is not! Ultimately, people with an agenda like Morgan are simply trying to justify their model. The online space is cheaper for obvious reasons - you don't need Einstein to tell you that!