There has been a lot of speculation flowing from the Banking Royal Commission about Finance Broker commissions and in particular whether trail commission should continue to be paid.
However, this misunderstands the role of a Finance Broker and what they bring to the table for their clients and indeed, the Banks!
Finance Broker Myth No. 1 - Commission drives recommendations!
Finance Broker Myth No. 4 - Trail is money for doing very little!
Finance Broker Myth No. 5 – The choice of Bank doesn’t matter!
Sourcing competitive, and appropriately structured finance, is just part of a Finance Brokers overall value proposition.
A key consideration is the experience and quality of the ongoing service provided by the Bank and Bankers with whom the finance is placed.
The majority of Brokers work hard to build partnerships with Banks and Bankers that are customer service focused and share their values of building long term relationships.
No savings on interest rates, fees or improved terms and conditions will ever adequately compensate for poor customer service.
Being able to connect clients with quality, Banks and Bankers is a critical part of a Brokers value proposition!
The Finance Broking industry has played a critical role providing choice and solutions to both individuals and businesses for the past two decades!
Whilst the Banking Royal Commission highlighted examples where brokers failed to act in the clients’ interest – these, as we have previously stated, are the actions of the few rather than the majority.
The growth the industry has enjoyed is evidence demand exists for the service and in the main Finance Brokers have been successfully meeting the clients’ needs.
When it comes to changes in how Finance Brokers are remunerated care is needed as it could deliver unintended consequences which ultimately will impact the very people (the customer) the Royal Commission is seeking to protect.