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.
“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.”
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