Yeah. It's interesting to me as ten years ago I worked for a competitor of theirs (PLAN Australia which is now owned by NAB). This statement from the article is extremely misleading.... perhaps flat out irresponsible of journalist and/or their source: "According to Shaw and Partners banking analyst Brett Le Mesurier, when franchisees collect trailing commissions to service clients that they aren’t servicing, it is akin to fees for no service, a practice for which the regulator has pinged the banks and which was also been raised as an issue in the royal commission."
The implication is that the customer is paying fees for no service which is not correct - It's the bank that pays said fees/trail commission. You could say that the customer pays in the end through fees for various bank products but this is very indirect.
While nominally this fee is for "servicing clients" in reality it's a sweetener to attract brokers to write loans with the bank as opposed to some other bank. This has it's own set of ethical issues (re: kickbacks) but that's not what is implied by the article.
If the bank wants to pay ongoing commission to brokers for doing nothing that is NOT the same as a super fund manager charging customers for management of a fund that no one is managing.
MOC Price at posting:
$1.56 Sentiment: None Disclosure: Not Held
