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Jessica Darnbrough
Rumours are circulating that one of Australia's banks could be set to increase the commission it currently pays to brokers as it looks to help strengthen and deepen relationships between brokers and customers.
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Speaking at the Bernie Lewis advice conference in Noosa last week, ING DIRECT's head of third party distribution Mark Woolnough inferred that the bank was currently looking at enhancing its broker trailing commission as it looks to align its business further with the future direction of the industry.
"I can definitely see trailing commissions going up in the future and at the risk of being controversial, I will say it is something that we are looking closely at."
This potential increase in commissions is a further good sign for brokers following a recent move from Macquarie Bank as it announced back in September it would lift its upfront broker commission from 0.60 per cent to 0.65 per cent with an additional increase to trailing commission from 0.15 per cent to 0.20 per cent for year four onwards.
Mr Woollnough was keen to recognise that brokers who looked after their clients ongoing financial needs deserved to be remunerated accordingly.
"Trail is paid to a broker to continue to service the client and their needs. While some brokers lose contact with their clients after settlement, others do a brilliant job of looking after the client's ongoing financial needs especially through the various stages of that customer's financial life cycle and those brokers may need to be remunerated based on the increased and higher level of value their service provides and generates." Mr Woolnough said.
"If you have a solid relationship with your customer and you look after their needs trail income is justified," Mr Woolnough said.
