Aussie report calls for end of trail commission
The government advisory body has called for major banks put a stop to trail payments, in a report recently submitted to the Australian government.
The suggestion is part of the PC's wide-ranging report into Competition in the Australian Financial System.
The Productivity Commission was expected to call for a fee-for-service model for mortgage advisers, but stopped short of the suggestion. The PC said a fee-for-service model would drive customers away from mortgage advisers, reducing overall competition.
However, the call to end trail will anger Australian advisers, and those across the Tasman, with many of New Zealand’s major banks Australian-owned. Removal of trail commission in New Zealand would significantly hit the revenues of mortgage advisers, according to TMM’s Annual Survey. One in five mortgage advisers said trail made up 25-50% of their annual revenue.
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