Powered by MOMENTUM MEDIA
subscribe to our newsletter

‘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.

“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.”

Advertisement
Advertisement

PROMOTED CONTENT


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 chairman of the financial services regulator has resigned from his position, effective immediately. ...

Refinancing settlements for the first nine months of the calendar year 2020 are up 27 per cent on last year’s volumes, having peaked in Ju...

The Tasmanian-based lender has seen a 43 per cent rise in settlements in the first quarter of the financial year, driven by strong demand fr...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Victoria’s surprising appetite for new homes

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

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