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Berry outlines how to squeeze the juice out of the fee model

Whether commission payments lead to conflicts of interest or not is immaterial all the time the perception exists, according to Berry Financial Services managing director Julie Berry.

Tuesday, July 19th 2011, 7:57AM

Speaking at the Institute of Financial Advisers (IFA) conference in Wellington, Berry used her experience of working in the Australian market - where commission payments are banned on certain products - to outline how to best utilise a fee for service model.

She said in Australia 85% of advisers were associated with a provider, and Australian Securities and Investments Commission (ASIC) research found 61% of advisers revenue came via commission, helping "create a perception of product bias."

Berry also outlined a number of ways advisers can succeed in a fee for service environment.

It is essential advisers stop referring to the advice industry, as Berry stressed it is now a profession and needs to be labelled as such.

Another point she emphasised was knowing the worth of your value proposition and making it clear to clients what you can do for them.

"There's a price to be paid for the services you offer," she said.

She challenged the advisers in the audience who may offer a first meeting for free to make it clear to the client that the meeting is not ‘free', but at the advisers expense.

She also advocated talking to existing clients to ascertain exactly what it is they value about the service's and relationship, saying "it probably won't be that you got them 7% year on year."

While regulatory moves to ban commission in New Zealand do not appear to be on the agenda, Berry said changes in Australia can "float down."

"If you have a strong value proposition, if your client can tell you what they're paying for, you'll have a strong business," she said.

 

 

 

 

 

 

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 5.50 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 ▼3.85 ▼3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.55 2.65 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac ▼3.39 3.45 ▼2.99 ▼3.35
SBS Bank 4.54 ▼3.05 3.19 ▼3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - ▼2.55 2.69 ▼2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 ▼2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 ▼3.29
TSB Bank 5.34 3.35 3.49 3.79
TSB Special 4.54 2.55 2.69 2.99
Wairarapa Building Society 4.99 3.65 3.69 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.10 3.19 3.12

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