Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter
Brokerage 'not surprised' by commission failings

Brokerage 'not surprised' by commission failings

A national brokerage says it is "not surprised" by the findings of ASIC’s recent investigation into Australia’s life insurance and risk advice sectors.

Through its investigation ASIC found there was an “unacceptable level of failure” in the life risk sector.

The corporate watchdog found that commissions were potentially skewing the advice that financial planners were offering, stating that “high upfront commissions are more strongly correlated with non-compliant advice, including situations where the recommendation is to switch products”.

Advertisement
Advertisement

Mortgage Choice general manager financial planning Tania Milnes said ASIC’s findings validated the Mortgage Choice ‘paid the same’ initiative and the company’s decision to mandate the hybrid commission structure for all practices in the network.

“These findings further reinforce our decision to build the business model from scratch, so we didn't have to change adviser culture and deal with any legacy issues,” Ms Milnes said.

“At Mortgage Choice, we have mandated the hybrid commission structure across the group for insurance advice, and our advisers are paid the same commission regardless of which insurance product their customer chooses from our panel of insurance providers,” she said.

Ms Milnes said the model mirrored Mortgage Choice’s broking business, whereby brokers are paid the same rate of commission regardless of which residential home loan a customer chooses.

“By taking a ‘paid the same’ approach to our insurance products, we ensure our customers receive the right product for their needs,” she said.

In its report ASIC urged all adviser groups to introduce a remuneration structure that supports good quality advice that prioritises the needs of the client.

 

Brokerage 'not surprised' by commission failings
mortgagebusiness

 

Latest News

The major bank has lowered its interest rate floor for mortgage serviceability assessments, becoming the third major bank to amend its polic...

A big four bank has announced the appointment of a new chief executive officer. ...

Digital neo-lender 86 400 has been granted a full authorised deposit-taking institution licence by APRA and expects to launch its mortgage ...

FROM THE WEB
podcast

LATEST PODCAST: A shift in serviceability requirements

Do you think the banking royal commission recommendations could negatively impact competition in the mortgage market?

Website Notifications

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