The latest round of bank rationalisation to the third-party distribution channel has been met with cautious approval but it has increased pressure on lenders to deliver to brokers.
Last week NAB Broker said its broker accreditation system would now require higher standards from brokers if they are to write NAB products.
Suncorp also recently announced changes where full commissions will only be rewarded to “target” brokers. Rumours are also circulating that announcements from other lenders are in the pipeline.
While John Kolenda, Loan Market Group director of sales, told Mortgage Business that while he understood the reasoning behind NAB's changes he hoped it would be implemented accurately and fairly.
“It is critical that the data used for making these decisions is completely accurate and that there is adequate flexibility to accommodate individual brokers who are committed to the relationship but statistically sit outside the criteria at a certain point in time.”
Mr Kolenda said if a “clean out of brokers who only submit deals once a year” was the end result it would only improve processing for full-time brokers.
However he said that he would expect improved SLAs from the banks at the end of this process.
Under the Suncorp changes, “target” brokers will be determined by criteria based on brokers’ relationships with the bank, quality and regularity of business as well as brokers’ clients establishing a direct debit account with the bank.
Mr Kolenda said there was some merit in Suncorp’s recent changes in focusing on how they can deliver with greatest efficiency.
“Suncorp has been clear that they need to structure a solution to continue to operate through third parties into the long term in the market.”
Troy Phillips, director of FirstPoint NB, was disappointed by Suncorp's re-evaluation of its third-party distribution however he said that brokers needed to understand times were hard and lenders had to make tough business decisions – as in any other industry.
“The world is a challenging place right now and credit markets are tough. You’ve got to respect Suncorp’s decision, they are a public company,” he said.
Mr Phillips said however that selecting its “target” broker partners by aggregation group rather than on an individual basis may prove costly.
“Suncorp could be missing out on a lot of quality business,” he said.
January 2009 NAB raises bar for brokers
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