Brokers will move to charging thier clients a fee for advice Aussie’s executive director James Symond has claimed.
Speaking at an MFAA luncheon in Sydney last week, Mr Symond said a fee for advice model would not become industry standard “today or tomorrow, but it will happen”.
“If the broking industry is to grow and prosper, then it needs to create a sustainable future and fee for advice will form part of that,” he said.
Mr Symond said while he understood that some brokers were hesitant to charge a fee, their concerns are unjustified.
“Fee for advice is not the same as fee for service. Brokers that offer the same service as a bank manager at a local bank branch should not charge a fee.
"We aren’t talking about charging a fee for service, we are talking about charging a fee for advice – it is added value.”
Advantedge’s general manager broker platforms Steve Weston agreed and said customers would be willing to pay for the professional service of a broker.
“Today most borrowers want more than a home loan.
"They know that they can go to a bank branch for a loan, but they don’t because they want advice and they would be happy and willing to pay for this advice,” Mr Weston said.
But not everyone in the industry is in agreement.
MAS Funder director Troy Phillips said not only would borrowers not want to pay brokers a fee for their advice, but implementing a fee for advice model was a sure fire way to cut commissions.
According to Mr Phillips, if brokers implement a fee for advice model, the banks will not hesitate to cut broker commissions further.
“No borrower will pay a fee when they know they can go to a bank and get the same thing for free. Broker remuneration is built into the product. Anyway, what fee is there left to charge? The banks already charge the customer every fee imaginable.”
The financial services ombudsman has changed its rules after the ...
One in two borrowers does not believe banks always have their bes...
Here’s the weekly round-up of the biggest news stories from acr...