Planner commissions to be slashed at Big Four bank

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Advisers at this major institution have been told that they should expect a significant drop in income in commissions from next month.

An internal document has been circulated amongst NAB planners telling them that market conditions have led the bank to introduce the new commission structure, reported Fairfax.

According to the report, the move has been made due to the effects that a slowing market, higher consumer expectations and new regulations have had on pricing structures.

The internal communication stated that “increasingly, more customers are demanding value be delivered, and where actual value is not deemed to be sufficient, customers are moving relationships, accounts and holdings to other providers where the value exchange is deemed more equitable,”  and that the bank was “empathetic that these changes have a personal impact on people”.

According to a NAB survey, 15% of customers were set to opt-out from their adviser relationship and 40% were unsure whether they would stay or go.

The bank intends to implement more phone-based scaled advice for low-need clients, with higher-need clients receiving more comprehensive advice, said the report.

Will you be affected by these changes? Have your say below.

  • Time for a restructure at the top of NAB/MLC on 15/11/2012 11:06:12 AM

    I wonder why customers are leaving NAB and MLC. Would it be because their products are just a mid range offering and not really that competitive? Their insurance is expensive and almost impossible to claim for? Their backup staff have no idea about anything other than the one specific area they are trained in and go out of their way to slow every process down as much as possible and transfer you to 4 different departments before you can get a simple answer? Their senior management staff do not live in the real world of mum and dad consumers and think everyone falls into the same customer category as themselves? Or is just the overall greed of the bank and staff which drives customers away from these transaction based advisers to real advisers who actually care about their clients and arent there for the quick buck.

    Maybe instead of punishing the NAB planners, MLC/NAB should look at the reasons why NO non aligned planners will ever recommend any MLC products in almost every situation.

  • Merv Gay on 15/11/2012 11:28:02 AM

    Well, who would have thought that? The people I come across who have had an "experience" with a bank planner have without exception used the same descriptive word of bank planners. That word is Pushy. I find that nearly always the products used are bank products or their "financial arm" so they're really just product sellers and confined to one institution. Seems like "tied agents" to me. Also the pressure on bank planners to attain certain targets is not in the best interests of any client. Some of the bank SOA's I have seen are woeful. The figures haven't added up on some, and the comparisons with replaced business sometimes are quite errnoneous. By reducing commissions the bank places further pressure on their planners, but then this could be their way of simply getting rid of their "over supply." Merv Gay

  • Andrew on 15/11/2012 3:16:09 PM

    I thought the banks advisers were salaried. I dont know why I thought that.

  • Big_trev on 15/11/2012 3:23:45 PM

    The Banks just don't get get it. Fellahs, Advice Based Distribution is a dinasour when a) Your planners can't cut it in the real world where technical competence, ethical behaviour and fiduciary responsibilty rules. and b) your main recruitement criteria is "Sales Ability" and c) Your product costings, quality, back office support- is s#!t. I haven't recommended an MLC or NAB product in years in fact, it is so easy to get them into something else. Just show 'em the total MER and (lack of) net performance !!

  • wow!! but i wont defend the banks and planners on 15/11/2012 10:11:55 PM

    talk about quality of soa's? none. from income's changing in the same plan, from recomendations and commissions disclosures missing from the earlier recomendations, dissapointing to see. I thought MLC was a little too high priced, difficult to use and glad im not alone. Buts thier BDM's that let us down.......sadly, as i do enjoy having a wide representation of "manufacturers"

  • Mervin C Reed FAICD on 16/11/2012 9:35:28 AM

    The actions of NAB/MLC are not a surprise, and clearly they have become very uncompetitive in the market place due primarily to their senior Management who appear quite out of touch. The products are expensive and the service quite poor. The model they are using to run the operation is old, and the Head of Wealth Management obviously does not understand the market or the directions it is heading into. If you cut the commissions to bank planners you gut your client base. The planner just leave and go elsewhere. Interesting that the CEO is going to cut his legs off at the Knees to run faster. NAB CEO Clyne should take a careful look at what is really going on.

  • Kristy Baker on 16/11/2012 9:19:01 PM

    I hate the accusation that just because you are a bank planner you care less for your client or that you aren't as qualified. In any bunch of people there are good and bad. You are also accusing clients of being stupied. If you go into a holden car dealership you expect them to show you a holden not a ford or toyota

  • david m on 20/11/2012 11:56:37 AM

    Clients pay for ongoing advice yet the adviser at the bank gets little or none of this income. In other words, the adviser who looks after his or her clients is ot getting paid to do so. I'm sure some do - but where is the incentive?

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