Major bank apologises for commission payment delays

In the last quarter of the calendar year 2021, Westpac told affected aggregator partners that there would be a delay in commission payments for settled residential loans, including upfront and trail commissions.

The issue is believed to have occurred on two occasions between September and November 2021 for residential mortgages written with Westpac and its subsidiaries (St.George, Bank of Melbourne and BankSA).

It is estimated to have impacted around 1 per cent of aggregators, including major aggregator Connective.

A Westpac spokesperson told The Adviser: “We’re aware of a technical issue which has resulted in a delay for some recent commission payments to aggregators, which we understand may have had a flow-on effect for some brokers.  

“The issue has been rectified and all aggregators have since received their payments.  

“We apologise for any inconvenience this may have caused.”

As a result of the delay, many of the commissions were not paid to brokers by the affected aggregators until the end of November/early December. 

Several brokers had reached out to The Adviser flagging the issue and its impacts to their cash flow.

Bryan Jovanovic, director and mortgage broker of Your Mobile Broker, lamented the repeated technical issues and the lack of transparency or explanation from Westpac around what was causing them, adding: “Most brokerages around Australia operate as SME businesses which rely heavily on a steady cashflow to manage their operational and personal expenses.

“Impacting this cashflow during such a fragile and unstable economic time without acknowledgement or apology [at the time] illustrates a lack of commitment and value recognition to the entire broker channel.

“The broker channel continues to adapt and adhere to the growing industry and lender compliance requirements whilst in turn eroding its own profitability.

“If the shoe was on the other foot, most lenders would enforce penalties and/or impact credit scores when clients miss their financial obligations to them, yet brokers are simply expected to accept such blatant and repeated disregards.”

Brokers have been impacted by commission payment delays from both lenders and aggregators recently. Executive chairman of the Loan Market Group, Sam White, this month apologised to PLAN Australia and Choice Aggregation Services (Choice) brokers affected by commission payment delays over the holiday period.

As previously reported, a “significant number” of brokers aggregating under PLAN Australia and Choice – which now form part of the Loan Market Group – were not paid upfront and trail commissions after a payment run was missed on 31 December after a “perfect storm” of issues.

The group has told brokers that all available staff are working on processing payments, and had worked over last weekend and the public holiday on 26 January, to ensure that all payments are up to date in February.

PLAN Australia and Choice Aggregation Services (Choice) will change to the Loan Market Group Revenue Management System in February 2022, which is expected to alleviate much of the payment and inquirer issues currently being felt.

[Related: ‘We deeply regret’ PLAN, Choice commission payment delays: Sam White]