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ISCOVER
Jessica Darnbrough
AFG’s general manager sales and operations Mark Hewitt has branded other aggregators claims that trail can be transferred, as one the industry’s biggest “red herrings”.
In responding to an article posted on www.theadviser.com.au last Friday, Mr Hewitt said that trail commission was far from portable, contrary to the claims of other groups.
"Nothing is impossible, but it is a long way from being ‘fully transportable’ as some like to make out in their marketing materials," he said.
“You need the lenders to approve the move, the new aggregator to be willing to take on the liability under the former aggregator’s lender agreements, and most importantly a PI insurer willing to take on the retrospective risk.
“Great marketing ploy by Connective but that is all it is.”
A cornerstone of the Connective offering is its “handcuffs free” proposition – meaning brokers are free to take their trail with them if they choose to switch aggregators or leave the industry.
Mr Hewitt believes this claim is misleading as it is far from easy for brokers to freely walk away with thier trail when switching groups.
But while Connective principal Mark Haron concedes that the AFG head was correct in detailing the various hurdles that brokers have to overcome when taking their trail with them, he stressed that at the end of the day, these hurdles form a “natural part of the due diligence process”.
“Brokers do have to get lender approval and find an aggregator that is willing to take on the broker, their book and the risks that come with that. That said, all of this forms part of a broker’s due diligence.
“At Connective we help brokers complete the due diligence process. We are dead serious about giving brokers the right to take their trail with them. If they couldn’t take it with them, they would ultimately suffer when they want to leave the industry.”
Mr Haron said the aggregator’s “no-handcuffs” approach to trail was most valuable when brokers are trying to sell their business and their book.
“They did the hard work, so they should reap the rewards of that,” he said.
