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Jessica Darnbrough
Fee for service should be embraced by the mortgage industry but will never replace broker commissions, Connective’s Mark Haron has claimed.
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Speaking at Connective’s annual conference in Queensland yesterday, principal Mark Haron said the debate surrounding fee for service would strengthen in 2012.
“At Connective, we believe fee for service does have a place in the industry and I think we will see more brokers implement this business strategy over the next 12 months,” he said.
“We advocate the implementation of fee for service and think more brokers should adapt this structure into their own business model.”
But while Mr Haron expects fee for service to gather momentum in the third party distribution sector, he says fees should never replace commissions.
“Brokers get paid a commission for completing work on behalf of a lender. Fee for service is entirely different. Brokers don’t charge a fee for their work, but rather their advice,” he said.
“Trail payment is particularly important. We have seen subtle increases to trail by some lenders in recent months, which is great.
“I think commissions are safe at the moment and I do not expect to see any changes to the current remuneration structures in the future.”
Mr Haron said Connective would continue to work closely with lenders to ensure broker commissions remain safe and sustainable.
