Do commissions damage customer trust?
Tate, who is in Hong Kong at a Financial Planning Standards Board meeting, says the question about whether commission was a sustainable remuneration structure for the future is being discussed by delegates.
“One of the things that has been highlighted here is that if you remove commission, you harm the lower net worth individuals who can’t afford to pay the fee. Commission means consumers more broadly can take financial advice.”
Columnist Martin Hawes wrote over the weekend that real estate agents and financial advisers were not trusted because of the perceptions of self-interest associated with their industries.
“An individual or professional group who appear to be only in it for the money, are among the least trusted of people. … we tend to not trust people who are remunerated by commission - they have a very high self-interest factor because they only get paid if they persuade us to do something.”
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
