Skip to main content
#
A Clear Direction
rss feedour twitterour facebook page linkdin
home
Financial Advisor Brisbane - AdviserScott Keefer - A Clear DirectionBuilding Investment PortfoliosPortfolio Management ServiceUpdated ContentContact Us - Brisbane Financial Planning
A Clear Direction Financial Planning logo

 Financial Happenings Blog 
Thursday, April 03 2008

The latest news from the Opes Prime saga, scandal might be a better phrase, sees the ugly impact of trailing commissions raising its head.  The Australian reports today - How Opes snared its rivals' clients - that brokers were offered trailing commissions of 0.75% by Opes Prime to encourage clients to hand over shares to Opes.  This is in comparison to commissions offered by conventional margin loan operations of between 0.25 to 0.65% for books of more than $10 million.

 

Opes Prime claim that the major attraction of their service was the ability to get finance to enable the purchase of shares in small to medium sized companies.  Even if this was the case, the perception could easily be reached that brokers were recommending their services to clients because of the improved returns for them as brokers.  As I have grown to realise, a person's perception is their reality.

 

This case provides another example of where trailing commissions are not in the best interests of investors.  When the result is that advisers, in this case brokers, choose a particular service or product based on the money they will receive back from that provider rather than a pure consideration of which service is best for the client, client's are losing out.  Unfortunately in some cases, let's never forget the Westpoint disaster as another example, the impact on investors is much worse than the small percentage of trailing commissions that are being paid.

 

Regards,

Scott Keefer

Posted by: Scott Keefer AT 07:21 pm   |  Permalink   |  Email
 
Scott Francis' articles in the Eureka Report 
Request for Information 
If you have questions, or would like more information, please go to our Contact page and leave your name and contact information.

Plan Well, Invest Well, Live Well! Financial advice providing a clear direction

A Clear Direction Financial Planning and Portfolio Management ABN 85 147 572 870

Level 19
10 Eagle Street
Brisbane QLD Australia
Ph: (07) 3303 0269
Email: scottk@acleardirection.com.au

Authorised Representative (398444) and Credit Representative (403292) of FYG Planners Pty Ltd AFSL/ACL 224 543.

ASIC - Financial Advisers Register

All content of this website is copyright © A Clear Direction Financial Planning Pty Ltd, 2017

FYG Planners Pty Ltd & A Clear Direction Financial Planning Privacy Policy