Commission refunds

Paying kickback commissions you didn't even know about? CHOICE outlines an easy way to reclaim your money.
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Q Will my planner be angry if I switch? Could he/she contact me and complain?

A Possibly. But rebate companies argue that if a customer is switching away from their adviser, chances are the adviser wasn’t providing much of a service so they’ve little to complain about. If you get a confronting phone call from a planner you’ve ditched, you can make a formal complaint to the Financial Ombudsman Service.

Q Is there a downside to these rebate services?

A Some rebaters are small start-ups without much of a track record. They may struggle to be viable if investment commissions are banned. Another criticism is that some rebaters are primarily financial planners looking for new customers. However, rebate companies offering financial advice separately would argue it’s a valuable service to those who want it. In the case of Dixon Advisory and some others, advice is provided on a fee-for-service (no commission) basis.

Q What are the disadvantages of leaving my adviser or insurance broker?

A If you want advice, you’ll have to pay for it separately. However, that’s not necessarily a bad thing — you’re more likely to get good advice if it hasn’t been tainted by commission payments that cause conflicts of interest. If you need to make an insurance claim, you won’t have the adviser to help you – you’ll need to contact the life insurance company yourself.

Q Do commission refunds apply to other financial products?

A The list is growing all the time, and some of the companies we compared can offer rebates for the commissions on real estate, cash management trusts, general insurance (home and contents, travel, motor) and many types of personal loans. As always, make sure you read the product disclosure statement and understand the implications, before making any decisions.


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