Adelaide Bank has unveiled what it has labelled a “simple, predictable and sustainable” new broker commission structure to take effect from September 1.
Under the new structure, broker groups will have the option of an ‘all-trail’ model, which includes a 0.30 per cent trail from the first year and no upfront commission.
Alternatively, mortgage brokers can choose a 0.50 per cent upfront commission with a 0.15 per cent trail from year one onwards.
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Tim Piper, Adelaide Bank chief general manager of wholesale mortgages, said the bank’s business partners had recognised the need for the changes.
But he conceded some groups had concerns about the degree of complexity and uncertainty in some of the new commission structures lenders have announced.
“Though the new arrangements do reflect a reduction in commission rates, we believe the simplicity and predictability of the new structure provides an attractive and competitive alternative for our business partners,” he said.
At a glance
• Up front commissions cut to 50bps
• No incentives to increase commissions; no performance hurdles
• All-trail option at 30bps from year one
