Jessica Darnbrough
The debate surrounding fee for advice has been reignited, with one industry stakeholder claiming broker commissions could be affected if the industry collectively moves towards charging a fee.
AFG’s NSW state manager Chris Slater said lenders could use any collective move towards fee for advice as a reason to slash both upfront and trailing commissions.
“I can’t speak for the organisations themselves, but I think if I was the head of one of the major lenders, I would just be sitting back and licking my lips while thinking ‘wow, we have been funding this channel for 15 years and now the customer is going to fund it – we don’t have to fund it anymore’,” Mr Slater told The Adviser.
“If we make a collective move towards fee for advice, I think the leading organisations would say they don’t need to fund the channel anymore and ultimately shave or abolish commissions.”
While some brokers will ultimately charge a fee for their advice and services down the track, Mr Slater said a collective move was inappropriate at this time.
“We are still a fairly young industry. I don’t think we are ready for fee for advice. Moreover, only four out of 10 customers choose to get their mortgage through a broker. I think we should first concentrate on growing our market share before we look to charge a fee for the services we provide.”
