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ISCOVER
Jessica Darnbrough
While a third of brokers believe that the future lies in charging the client a fee, the majority remain steadfastly against asking the borrower to pay for advice.
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According to a recent straw poll conducted by The Adviser, almost 60 per cent of brokers say the future of broking does not lie in ‘fee for advice’.
Just 32.6 per cent said the future of broking does lie in fee for advice, suggesting that brokers who do choose to charge a fee will remain the exception rather than the rule.
In response to recent story on The Adviser's website last week, one broker said while he would love to charge a fee for advice, the market is “nowhere near mature enough to accept that”.
“Brokers who charge and think those who do not are simply order takers are way off the mark,” he said.
“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.”
Similarly, a broker named Gordon believes brokers are paid “well enough”.
“We earn good upfront commissions, and after some time, our trail is second to none compared to any other industry,” he said. “Few businesses have the income we do. Once we charge a fee we are uncompetitive. Banks will exploit this.”
Despite the stance of some brokers there is clearly support for placing a value of the services a broker delivers to the client.
Adelaide Bank’s Damian Percy recently said there is a place for fee for advice and he believes consumers would be willing to pay a fee in certain circumstances.
“I do see merit in fee for advice,” Mr Percy told The Adviser. “I think consumers realise when their home loan needs are difficult and, in those circumstances, they would be willing to pay a fee.”
