The CEO of a Sydney brokerage has joined the industry debate on remuneration in the third-party channel, warning that a fee-for-service model will create an uneven playing field for brokers.
Speaking as a special guest on the latest episode of The Adviser’s podcast series, Broker Pulse, MORE Group chief executive Aaron Upcroft echoed comments made recently by AFG chief executive Brett McKeon that a fee-for-service model will have a negative impact on both brokers and consumers.
“I agree with Brett completely. It will kill a lot of the industry if [lenders] impose this because they won’t do it in a way that makes it equal,” he said.
“Our role here is to try and find the best deal for the client, do the hard work, but also to keep lenders honest in some ways – keep them competitive.
“There’s no way that the lenders are going to impose that their staff who are selling the same mortgage products are then going to have to charge a fee for service if they introduce a fee-for-service model. All they want to do is increase their bottom line by not having to pay us as much or at all, or shift the responsibility on to us to try and battle for it," he added.
“It’s about lenders squeezing us right now. Lenders don’t want to have to pay the commissions.”
FBAA chief executive Peter White told The Adviser earlier this week that he is having regular discussions with regulators and government about remuneration in the third-party channel, and while brokers have received little information about the review since it was officially confirmed by Assistant Treasurer Kelly O’Dwyer in November, he said more clarity is on its way.
“At the moment we are right at the beginning of the process where they are trying to get their heads around what they are trying to achieve,” he said.
“That’s why there has been little put out about this, aside from what the minister said. I know for a fact that more will come out shortly. Understand that regulation and government process aren’t as quick and fluid as people expect. It takes a little time.”
[Related: Bank flags broker commission ‘challenges’]