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Broker reaction to comments made by FBAA president Peter White in the article ‘Trailing commissions under threat’.
In my opinion banks will be very short sighted if they stop trail commissions, Trail commissions guarantee the majors keep the business and stop brokers rolling over clients every couple of years to gain up fronts. How much churning goes on in countries not paying trails? John Brown, The Mortgage and Finance Centre
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We, as brokers, have returned too much business to the majors and this is how they say Thank You. If we ever needed a reason to support the so called, second tier lenders and mortgage managers, here it is. Ian Fraser, Fraser Financial Services
Peter White has assessed the situation pretty well. If you continue to support the major banks you will find that they have you over a barrel in a few years. It is time to act now and ensure the majors don’t take full control of the market and industry. Support the non banks as much as you can. They are easier to deal with, still have competitive products and don’t have any channel conflict. When are brokers going to wake up and start selling products other than CBA and Westpac pro-packs? Bernie Sutton, Resicom Financial Mortgage Management
The question has to be asked: Shouldn't the FBAA and the MFAA in their role as professional industry associations be working on behalf of their paying members and lobby the lenders to make sure this does not happen? Otherwise what are we paying these guys for if not to represent us as a group. Lynne Cox, Aussie Mortgage Masters
If I were a member of the FBAA I would resign after reading the comments from Peter White. Perhaps he should familiarise himself with the industry he is supposedly representing. Both CBA and NAB are transferring more responsibility to brokers to the point that they are virtual mortgage managers. Alex Filipovic, Axel Finance
Peter White should refrain from writing such comments. The more something is said the more chance it has of actually becoming a reality. There will be a mass exodus in the industry if trail goes as this is the only significant thing keeping a lot of players in the industry. We are grossly underpaid for the services we offer and we all work many hours unpaid. If you have never worked as a broker, especially in the current climate, you simply cannot understand. Trail income allows us to build commercial value. We need this as we do not get fantastic superannuation packages, long service leave, paid holiday leave etc. You are supposed to be protecting us Peter not destroying us and with comments like this. Bob Campbell, LJ Hooker Financial Services Northern Rivers
Brokers continue to supply a solid percentage of finance business to the big four and secondary lenders. It is hard to see any of the big four being happy losing market position if they cut out trail. Supporting the non-bank lenders merely to retain trail could produce some disastrous results in the future and turn Mr White's opinion into a self fulfilling prophecy. I think a balanced approach to the distribution of broker loan volumes is the safer step. What are the Banks going to do? Get together in a clandestine meeting and agree that trail will be discontinued to the detriment of the broker industry? Professional brokers will always continue to assist their borrowers after settlement and take labour costs away from the lenders, no matter who they are. That is what trail is for. Graeme Kluck, Holdar Finance Group
