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Government will likely reject PC’s trail recommendation: Bouris

markbouris markbouris
Tas Bindi 7 minute read

The recommendation to abolish trail is unlikely to be implemented by the current government, according to the head of Yellow Brick Road, who is spearheading a report responding to the recommendations.

Speaking at the National Finance Brokers Day event in Sydney on Wednesday (15 August), Mark Bouris, the executive chairman of financial services firm Yellow Brick Road (YBR), said that his “gut feeling” is that the Productivity Commission’s recommendations on broker remuneration, as stipulated in its final report on competition in the Australian financial system, are unlikely to be implemented by the Turnbull government.

“I don’t think the Productivity Commission’s recommendations as to how our remuneration structure should be looked at will have any effect on what this current government would do,” Mr Bouris said.

The YBR executive chairman referenced the Department of Treasury’s submission to the financial services royal commission, which expressed its support of a lender-paid remuneration structure that involves the payment of both upfront and trail commissions to brokers.


“I saw the Department of Treasury’s submission to the Hayne royal commission… After they considered a once-only payment, they took the view that the better remuneration structure is an upfront payment with a trail. That’s what Treasury says, and it’s fair to expect what Treasury says is what the Treasurer wants to do,” Mr Bouris said.

“While they are in government, my gut feeling is that the legislative response, if there is any legislative response to how we get paid as brokers, would be nil from this current government.”

He added that recent conversations with elected government officials indicate that they’re in favour of brokers being compensated with both upfront and trail commissions, so long as they do something to earn them.

Mr Bouris acknowledged that brokers are deserving of trail given the ongoing advice and assistance they provide to customers, but he urged that brokers agree to formalise the work they do to outline why they are paid it.

“I think it’s about time we grow up as an industry and say, ‘Yes, we will do something for the trail’ in a formal sense. All of you, I have no doubt, talk to your clients all the time and you would say, ‘I am entitled to trail because I actually do something for my clients’… But I don’t know what you do in a formal sense and what your client would think you were doing in a formal sense,” the YBR executive chairman explained.


“I do think we should be agreeable to doing something for the trail that we receive during the life of the loan or the remainder of the life of the loan.”

Mr Bouris added that he was not particularly concerned about the recommendations on broker remuneration that could come from the royal commission either, noting that a lot of the case studies that have been highlighted in the public hearings were historic, and that elected officials cannot interfere with the inquiry process or even get involved by providing submissions.

However, Mr Bouris said: “Royal commissions always come up with something important, and what we don't want is to be the one who wears it.”

The YBR executive chairman lamented that brokers are being perceived as “somewhat of a villain in all this, taking all this money like we’re making a fortune, which is just wrong”, highlighting that brokers in Australia earn an average $88,000 a year.

Taking matters into our hands

As such, Mr Bouris said that he, along with a few other individuals, has formed the Mortgage Industry Forum (MIF) to assess all the recommendations that have been made by the recent inquiries and bodies regarding changes to the broking industry.

He said that the MIF has written a report, which is yet to be released to the public, and has sent it to the Treasury secretary, the Treasurer and royal commissioner Kenneth Hayne.

While noting that the MIF was formed “by brokers for brokers”, Mr Bouris stressed that the forum is not intended to compete with the CIF, the MFAA or other forums and associations. Rather, the intention of the MIF is to be “adjunctive” to them.

Primarily, the YBR executive chairman said that the MIF is looking to make a compelling case for brokers.

Mr Bouris said: “All we’re trying to do is properly build a case for brokers so that we, as a sector of the market, can hand over to the government and to commissioner Hayne a reasonable and well-thought-through document about how we should be regulated and/or managed around fee structures, around our obligations, around transparency, around training and compliance for the future.”

[Related: Industry reeling from PC trail stance but calls for calm]

Government will likely reject PC’s trail recommendation: Bouris
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Tas Bindi

Tas Bindi

Tas Bindi is the features editor for The Adviser magazine. 

Prior to joining Momentum Media, Tas wrote for business and technology titles such as ZDNet, TechRepublic, Startup Daily, and Dynamic Business. 

You can email Tas on: This email address is being protected from spambots. You need JavaScript enabled to view it.



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