BETT is coming: I got to thinking, especially in light of the  coming changes to the FSA and the new way of paying for financial advice, what value does a reseller or broker bring to a transaction and how they should monetize their existence?

Benefit 1)

Enables a school to achieve good value

Problem 1)

A vendor paying a third party will have to recoup their margin somewhere. Does this mean prices go up across the sector?

Benefit 2)

It enables schools to ensure best value in any transaction and avoid buying a dud.

Problem 2)

How does the school ensure best value from this process, what companies would engage with a broker? Ones struggling for sales? Ones “approved” by the broker? How would approval work? How does a school ensure the good judgement of the broker?

Benefit 3)

Schools achieve best value without spending time on doing so.

Problem 3)

A school may not actually understand what they have purchased, the time & responsibility is factored into the salary & terms of a head’s salary. Is it therefore ok to delegate this function & retain the salary?

Advantages for Vendors:

A 2 or 3% commission is a cheap lead.

Disadvantages:

The broker may not “approve” your product, which may or may not be based on rational objective criteria.

So, In my view, the school should pay the broker, not the vendors. This would protect prices for those schools who feel that they can handle best value for themselves. The school seeking support would therefore be the one paying the surcharge.

 

Transparent, just, simples.

Any comments welcome, in public, below: