The Broker versus The Bank
Commissions are widely used in sales roles in most industries to encourage the desired outcome - the sale. The 'conflict area' relates to the remuneration earned from a successful sale. The potential 'conflict' relates to the sale of inappropriate products motivated by the sales person's financial interest in the sale.
Helping to mitigate a conflict of interest
Just as mortgage brokers normally receive commission for their role in selling mortgage products, bankers also generally receive performance based remuneration for selling their employers products (home loans, credit cards, personal loans, insurances etc).
There are important distinctions between the broker and the banker which help to mitigate the broker's potential conflict of interest.
We believe that offering choice helps to mitigate the potential conflict.
The conflict of interest |
Broker | Banker | |
Remuneration includes sales component | ![]() |
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Mitigating the conflict |
Broker | Banker | |
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Summary
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The banker is conflicted when it comes to providing objective advice on what is best to help you to achieve your goals. |
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Bankers are not able to mix-n-match products from various sources and can only discuss his or her employer's products with you. |
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Brokers are well qualified to consider alternatives and offer solutions from a wider pool of resources. This helps to ensure that our customers receive well considered solutions designed to assist them achieve their financial goals. |