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A uniform move towards fee for service is not even on the radar, one of Australia's largest aggregation groups has claimed.
Speaking to The Adviser, Vow Financial’s chief executive officer Tim Brown said the mortgage broking channel was unlikely to follow in the footsteps of financial planners.
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While Mr Brown believes financial planners are making an industry wide move towards fee for service at the right time, there is no reason for the mortgage industry to follow suit.
“As long as the banks continue to pay broker commissions at the current levels, I don’t think we will see the industry move towards fee for service,” he said.
“Right now, borrowers can access the same rate from a retail branch as they can from a broker, so there is no competitive benefit to using the third party channel.
“Unlike the financial planning industry, I don’t think the government has any plans of addressing the issue of fee for service in the short term.”
The financial planning industry is slowly making the move towards a fee for advice model, with many companies now boasting a fee only business model.
According to government indications, the entire industry will make the move towards fee for advice within the next 12 months.
