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Speaking yesterday, Comyn outlined his support for a fee-for-service model similar to the Netherlands, where customers are charged an upfront fee for mortgage advice.
Comyn said he believed the current broker commission model was flawed, and suggested fee-for-service was "the most attractive model" for the bank, with the least conflicts of interest. Comyn said he believed fee-for-service best served the customer, but felt CBA was unable to introduce it as rivals would not follow suit. He claimed the bank tried to introduce a fee-for-service model in January this year.
TMM Online asked ASB for its views on fee-for-service, and the bank indicated the two markets would be viewed separately. An ASB spokeswoman said: "ASB is aware of CBA’s response to the Royal Commission in Australia, however ASB operates independently of CBA and in a very different market."
The spokeswoman said ASB was keen to protect its relationship with brokers: "ASB has a close association with the Mortgage Broking industry in NZ and our aim is to work with Brokers to continuously find better ways to work with the industry and our customers in New Zealand.”
The comments are likely to be welcome news to mortgage advisers fearful ASB will follow its parent group. Yet adviser remuneration continues to be a source of hot debate across the Tasman.
Australian mortgage advice trade body the MFAA reacted angrily to Comyn's comments. MFAA CEO Mike Felton said the calls for fee-for-service "demonstrates that CBA's priority is shareholder returns". Felton added: “CBA’s model is anti-competitive and designed to drive consumers back into their branch network, which is the largest branch network of the major lenders.”
CBA's Comyn made further comments against adviser remuneration yesterday, taking aim at trail commission. Commissioner Hayne asked Comyn whether brokers delivered ongoing services for their fee. "I think they would be limited, Commissioner," Comyn replied.
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One size doesn’t fit all and what works with one culture doesn’t work with another.
The second thing, after living and working in Aussie, most have a superior view of what they do and discount what NZ is able to bring to the party.
After taking over a state account that was the worst performing one in the group, in less than 12 months turned it into one of the best performers.
In the face of do it our way because that’s the way we do it... um, yeah about that... all I can say is it was kicking and screaming until the results proved otherwise.
The Aussie approach isn’t too different from the US one, we’re big, we’ve got this... in the face of NZ punching above it’s weight and doing circles around them. Yes, we don’t have size and scale, but we make up for it in innovation and solutions that work and include the people along the way.