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Broker

Majority of brokers could charge fee for advice

By Staff Reporter•Friday, 9 Nov 2012•4 minute read
The Adviser

Jessica Darnbrough

Fee for advice could soon be adopted by the majority of mortgage brokers, Adelaide Bank's general manager third party lending Damian Percy has claimed.

Speaking at the Bernie Lewis advice conference in Noosa, Mr Percy said while it is unlikely that the industry as a whole will move towards a fee for advice model, the majority could soon start charging for their advice as brokers get increasingly sick of letting the banks determine what they are worth.

"Why should the banks determine what a broker is worth. By allowing the banks to do that, brokers are saying that they work for the banks. That is not a successful career, nor is it particularly rewarding," he said.

"Looking forward I think in time the majority of brokers will start charging a fee for advice. It will not be because commissions have dropped, it will be that consumers fully appreciate the value that brokers deliver to them and will be prepared to pay for that advice."

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Comments (14)

  • Spartan Thursday, 15 November 2012
    <p>It seems to me that there is a large proportion of brokers that seem to think we are working in a communistic industry. That is, we are all worth the same hourly rate. &lt;br /&gt;&lt;br /&gt;I'm sorry, that does not sit well with me. Surely it is up to us individually to determine our worth and the value we provide to clients and price this accordingly.&lt;br /&gt;&lt;br /&gt;Having worked with a number of brokers over the years....no two brokers are the same in how they engage, advice and service clients. &lt;br /&gt;&lt;br /&gt;The sooner the good brokers realise this... the sooner we can enhance the industry and the profession overall.</p>
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  • Michael Saturday, 10 November 2012
    <p>Some brokers charge and good luck to them, but it depends on your clients, and source of business. Love to charge for advice, but the market is nowhere near mature enough to accept that in general. Also if we do not all go to a fee for service model at the same time, it will not work, because you can still structure loans and give your expertise, and still charge zero. Brokers that charge and think that those that do not are simply order takers are way off the mark. Fee never relates to quality. Whilst there are brokers giving quality service and advice for free, charging for service will always be an uphill battle. Unlike Refund type brokers, not charging a client is a model that is currently working, so don't hold your breath, thinking that fee for service is something near!!!</p>
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  • G.Money Friday, 09 November 2012
    <p>I charge a fee for service. &lt;br /&gt;&lt;br /&gt;$399 Resi&lt;br /&gt;$999 Commercial&lt;br /&gt;$1499 SMSF&lt;br /&gt;&lt;br /&gt;Not a lot, but it covers costs. &lt;br /&gt;&lt;br /&gt;I understand if some either cant or don't want to. &lt;br /&gt;&lt;br /&gt;I am blessed that i can demonstrate value to my clients. &lt;br /&gt;&lt;br /&gt;Invoice is in your inbox please provide credit card details so we can submit the application. &lt;br /&gt;&lt;br /&gt;Good luck everybody!</p>
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  • Charge Fees Friday, 09 November 2012
    <p>Brokers do give advice on loan products - read the NCCP Act. If you are an order taker then you can't expect to be able to charge. If you give strategic advice on which loan products will suit the clients long term strategy and provide that advice in writing then you should be able to charge a fee.</p>
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  • PeterT Friday, 09 November 2012
    <p>Sally as a broker I give advice on credit and loan structuring. I give advice on how finance structuring is an integral part of a successful investment strategy. If you're not giving advice, then you're only taking an order and processing some paperwork. If that's all the borrower wants, then they might as well go to a bank branch or call a help desk. They also provide assistance.</p>
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  • Craig Guthrie Friday, 09 November 2012
    <p>Why would clients want to pay a broker for advice ... unless of course they believed that banks are cheats and liars, not to be trusted and accordingly dealing direct with them was fraught with danger.</p>
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  • Bill O Friday, 09 November 2012
    <p>When will the Bank's get over fee for advice. It is in their interest to get it going so they can wind back the commissions.&lt;br /&gt;These people have no idea and thats why they work for a bank.They would not survive as a broker especially if they tried to charge for the advice that people can get free just about anywhere.&lt;br /&gt;I blame The Adviser for even printing this bull....</p>
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  • Sally Friday, 09 November 2012
    <p>Damian, Brokers don't give advice, they provide assistance. The sooner everyone learns the correct terminology, the sooner everyone will be comfortable with the NCCP.&lt;br /&gt;The rest of your points are valid, but a person in your position should use the correct terminology. It is confusing to the broker.&lt;br /&gt;By all means, charge for your assistance or the service you provide. That's sensible business.</p>
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  • Donut Friday, 09 November 2012
    <p>I think Damian Percy is wishing we would charge a Fee for Service as it would make ABL feel better. I will not do ABL loans any more! I also feel brokers should move on from blaming banks for everything. I feel we get quite good remuneration for what we do. I do not down grade what we do, I simply feel we get well paid.</p>
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  • In Magic Land Friday, 09 November 2012
    <p>Brokers will be able to routinely charge a fee for service just as soon as branches do. &lt;br /&gt;Banks own brands and set the fee structure of products.&lt;br /&gt;When someone can establish brand recognition greater than the big 4 let me know, I want to work for them.</p>
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