It has been a big year for commissions, after majors, non-majors and non-banks have all revealed significant changes to their commission structure.
This has prompted questions of whether these increases in commissions can ever influence a broker’s recommendation.
FBAA Chief Executive, Peter White, wants to put this issue to bed, reaffirming that a broker's first and most important job is to find the right loan for the client’s needs. Brokers must be able to look past the commissions – regardless of any bump ups, White said.
“It is extremely important that brokers are not compromised by commission rates," he argued.
White said responsible lending under the NCCP dictated that brokers not be swayed by commissions when addressing client needs.
“The bottom line is this: If you cannot understand the needs of the client then you can't begin to structure any sort of loan for them," he said.
But this does not mean brokers should necessarily shy away from products paying a competitive commission, White suggested; merely that commission not be a driving factor in choosing the product in the first place.
“The determination by the broker can never be based on the amount of commission. If it works out that the loan that pays the highest commission is the loan that is not unsuitable for the borrower and meets their needs analysis, so be it.” White said.
