Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter
‘No evil in commissions’ says lawyer

‘No evil in commissions’ says lawyer

A leading financial services lawyer believes commissions in mortgage broking and financial planning are beneficial to all.

It is a false assumption that commissions paid to brokers and advisers by the banks leads to incorrect advice, Gadens partner Jon Denovan told Mortgage Business.

“It’s demonstrably false because of situations where the big problems we have seen like Storm Financial – that wasn’t a factor of commissions,” Mr Denovan said.

Advertisement
Advertisement

“That was a factor of them building their business,” he explained.

“There is no evidence at all that I’m aware of that commissions are the problem, yet it is just an easy assumption and as soon as you say that commissions are the problem and make the user pay, then immediately the user stops using the service all together.”

Mr Denovan’s comments come after a number of industry figures raised concerns about conflicted remuneration in mortgage broking.

“Commissions are a good thing,” he said.

“It spreads the cost of service for the customer and there are sufficient checks and balances to make sure the vast majority of people don’t do the wrong thing.”

There will always be people who do the wrong thing regardless of commissions, Mr Denovan said.

“Those who are going to do the wrong thing are going to take back-handed commissions anyway, so banning commissions isn’t going to stop the payment of commissions, it will just move them underground.”

 

‘No evil in commissions’ says lawyer
mortgagebusiness

 

Latest News

The Australian Securities and Investments Commission has commenced a court case against NAB over allegations that 16 bankers accepted loan i...

The CEO of an ASX-listed mortgage business has seen demand for housing loans “rise significantly” in response to the recent shift in sen...

The non-major has reduced variable and fixed rates across its owner-occupied and investment home loan products. ...

FROM THE WEB
podcast

LATEST PODCAST: Acquisitions and evolution

Do you think the mortgage market will see more consolidation this year?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.