Ian Smith, CEO of spinners Gavin Anderson, writes to Crikey about the Fin Review story we mentioned yesterday about the big jump in commissions Canberra is paying stockbrokers to flog T3 – 1.25% compared with 0.5% for T2.

Smith quotes 11 other major capital raisings by Caliburn where the broker firm commission has been 1.25% or more – Promina and Multiplex paid 1.75%. (We can well understand Multiplex having to pay above the odds, but what was Promina thinking?)

“Hence, T3 is not particularly “generous”,” says Smith.

On the difference between the T2 and T3 commission rates, he claims the capital cost to brokers of making firm commitments to take stock has risen – but 150% still seems like a rather large rise to me. More intriguingly, “another factor in fees nowadays is the increased role of financial planners, who are now more influential than they were in T2”.

Which still leaves one with the impression that any stockbroker – or financial planner – trying to talk a punter into taking T3 might be more interested in the commission than the best outcome for the punter. It’s particularly interesting given the poor view most broking houses have of Telstra at present, as the Oz reports.

As Alan Kohler opines this morning, Sol Trujillo will need to produce a particularly flash rabbit out of his Friday strategic briefing to make a case for taking part in Nick Minchin’s flog-a-dog.

Peter Fray

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