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ISCOVER
Jessica Darnbrough
While a majority of brokers are still reluctant to charge for their services, the number of brokers who do charge is growing, new research has revealed.
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According to a recent survey conducted by The Adviser, 26.5 per cent of brokers charge a client fee – significantly higher than the 22.8 per cent recorded in 2011.
In addition, of the 400 plus respondents, more than 53 per cent said they would consider charging a fee that is refundable on the client submitting a loan application.
Property Secrets’ Paul Giezekamp has been successfully charging his clients a fee for some years now and believes all brokers should do the same.
“If you position it right to your client, they won’t have a problem with paying the fee,” he told The Adviser.
“Why shouldn’t we charge a fee? As brokers, we provide them with a level of service and advice that these borrowers will not be able to get anywhere else.”
But while more brokers this year said they charge for service, those who do not were more adamant than last year about not doing so – neither now nor in the future.
When asked whether they would “ever consider charging a fee”, 62.0 per cent of brokers said they would not – up from 56.4 per cent this time last year.
Australian Mortgage Brokers’ Steven Pienaar is one broker who is adamantly against charging a fee.
Mr Pienaar said an industry-wide move towards a fee for service model would encourage lenders to stop paying broker commissions.
“I believe the fee for service model is being pushed by banks with another agenda,” he siad.
“Ultimately, it is a way for the banks to make more money and increase their margins.
“The mortgage broking industry will die overnight if the banks stop paying commissions and we have to charge a fee for service.”
Mr Pienaar’s thoughts echo those of many other brokers, including Club Financial Services’ Rob Egan.
“The lenders may continue to pay trail, but I think a fee for service model would ultimately encourage lenders to stop paying upfront commissions,” Mr Egan said.
