This is a good point as there's a cost/benefit relationship between the money being brought in by a broker and the cost to service them. Weighting the commissions to drive out under performers make senses from a business standpoint if such people don't bring in more than they cost.
Prior to the GFC there were many people who became brokers because of the (false) perception that it was easy money, so there were many in the industry who shouldn't have been. This justifies why this type of commission structure was brought in. Public perception aside, from a financial standpoint maybe it's still justified, though to know this we would need detailed financial information than is publicly available.
Financial viability of the business will depend on whether the high performers are propping up the business and whether the medium to low performers are really dead weight.
The issue here is really public perception and reputation damage - from the standpoint of customers this will blow over eventually, but from the standpoint of brokers, will this controversy drive away potential super star brokers?
MOC Price at posting:
$1.57 Sentiment: None Disclosure: Not Held
