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By: Jessica Darnbrough
Advantedge’s chief executive officer Drew Hall has voiced his support for a broker fee-for-service model.
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Speaking at the Australian Banking and Finance Innovation conference yesterday, Mr Hall said as the industry heads into a new era of regulation and licensing, brokers should contemplate charging consumers for their advice.
“I think the licensing will act as a catalyst to support the move towards a fee-for-service model,” Mr Hall said.
“Brokers play a very important role in their customer’s life. They build relationships with them and conduct ongoing finance health checks even after the loan has been processed. As such, I believe implementing a fee-based model is the right thing to do.”
Mr Hall said all lenders should support the transition towards fee-for-service and help facilitate the move.
If all brokers were to charge for their services, Mr Hall does not believe it would mean the end of broker commissions.
“I don’t think commissions are under threat of being reduced. The majors have all come out and said that the economics are making sense at the current level, and so they would be hesitant to make any changes to this area in the future," he said.
"I think a fee-for-service model should be driven by a broker’s proposition and not commissions.”
