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Broker commissions will eventually increase, one aggregation head has claimed. Speaking to The Adviser, nMB’s managing director Gerald Foley said he could see broker commissions increasing – just not in the immediate future.
According to Mr Foley, margins are returning to lending, so there is no reason for Australia’s banks and non-banks to hold back on lifting broker commissions.
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“There is continual pressure on the banks to grow market share and as long as they can remain competitive in terms of product and price, I think there is some room to move,” he said.
“It will be a brave lender to lead that charge, but once it does, the rest will find a way to follow.”
Vow’s chief executive Tim Brown agreed that commissions would increase, but said he believes lenders will use them as a lever to drive more business from time to time, rather than make one 'official' movement.
“I think there will be periods where lenders will lift commissions for a certain amount of time for market share reasons or for a promotion,” he said.
“We’re seeing that happening now, where a couple of the banks are running special promotions and they’re upping the upfront [commission] for a period of time.
“Obviously it’s very competitive out there now and everybody’s fighting tooth-and-nail to get market share.”
