Claiming Commissions from YourShare.com.au
‘This is the easiest of my suggestions to implement but could quite easily be the most lucrative.’ David Koch
The typical family receives $1700 a year in commission rebates – that’s three times the saving provided by this month’s interest rate cut!
Just as the Reserve Bank is able to save you around $50 a month on a $300,000 home loan, I am going to show you how you can compound these savings with just a couple of phone calls or few minutes on a website – and it could literally save you thousands of dollars a year.
Add the extra cash to your mortgage repayments and the benefits get proportionately bigger and bigger.
Reclaim your commissions
This is the easiest of my suggestions to implement but could quite easily be the most lucrative.
There are numerous commission-rebating services around now but the first wasYourShare.com.au, an innovative company which refunds most of your trailing commission on your investments and insurance products each year.
According to CEO Sally Farrow, the typical family receives $1700 a year in commission rebates – that’s three times the saving provided by this month’s interest rate cut!
The huge rebates come from all kinds of financial products but your mortgage is the biggest. Typical trail commission on mortgages is 0.20 per cent, which, on a $350,000 home loan equates to $700 a year. That’s cash that your mortgage broker would usually pocket for doing nothing.
Then there’s your superannuation fund. Trail commissions here average 0.5 per cent, meaning $500 a year going begging unless you claim it yourself. The list goes on, with trail commissions payable on everything from home and contents cover to life assurance, critical illness to car insurance.
YourShare.com.au will take half of the trail commission it collects on your behalf up to a maximum of $295 a year. After it has received that amount, you get 100 per cent of all other trail fees, which can add up to thousands.
All you have to do is visit their website or call them, fill in a form authorising Yourshare to act as your agent, and that’s it. The cash will start flowing.
Now, I understand many people like their financial planners and feel loyal towards them. But trail commission is paid to financial planners to cover the costs of them “reviewing” your circumstances each year and keeping your finances in shape. If you think your planner is doing a good job in this respect and want him to continue receiving the cash, fine. But I can tell you that most planners do little or nothing to earn this ongoing fee and it remains one of the biggest rorts in the financial services industry.
Sure, planners and mortgage brokers earn their “up front” fee through the time and effort they spend on establishing your investments or home loan, but the annual payments made to them after that are money for nothing, literally. So I encourage you to claim it as your own and do not let it land in the pockets of somebody who is doing nothing to deserve it.
Most commissions will be abolished from next year, but only on products taken out from July 2012 onwards, so trail commission already being paid will continue to be paid. Failure to claim this money yourself is literally throwing cash down the drain.
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