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In the article, Corfield says lower funding costs will likely translate into increased broker commissions – but warns brokers not to get too excited just yet.
“Funding costs have fallen,” said Corfield, “although it will take time for this to fully flow through into banks’ cost of funds as funding built-up in recent years rolls off. I'd love trail commissions to go up, but that would need to be on a sustainable basis.”
Oldbroker responded with the following, rather pragmatic, comment:
“Commissions will rise only if the percentage of broker-initiated deals increases to (I think) around the 75% range as opposed to the 40% currently. The lenders don't owe us a living and they reduced the commissions because they can. It's a fairy-tale to think otherwise. CBA eliminated first year trail and their market share remained stable. Simple supply and demand.”
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