Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Industry veteran questions calls for standardised commissions

samwhite  samwhite
Reporter 4 minute read

A move to introduce a standard upfront commission paid to brokers is not necessary, according to one Perth-based mortgage broker.

Executive chairman of Loan Market Sam White recently expressed support for remuneration reform, including a proposal to standardise the upfront commissions paid to brokers as well as clawbacks. 

However, speaking to The Adviser, mortgage broker at Century 21 Home Loans Ken Crawford questioned calls for such reform, stressing that commission sizes have had no bearing on his product recommendations.

“The size of the upfront commission doesn’t influence me in any way,” the broker said.

Advertisement
Advertisement

“I dont believe it’s necessary. My consideration is first to the client, as to where the most appropriate place to put their loan is.”

Mr Crawford doubted whether all loan providers would comply with an upfront commission standard.

“I do a number of Keystart loans at 0.55 per cent. I dont think youre going to get Keystart to move up to a higher commission rate,” Mr Crawford said.

Mr Crawford acknowledged that such reforms might be helpful in putting to bed allegations of “conflicts of interest” from the Productivity Commission (PC).

“If paying a standard commission for all banks to brokers, both upfront and trail, was a way of overcoming some of the concerns that the PC [has] around brokers putting deals to where theyre getting the most commission, then I dont see it as a problem,” the broker continued.

PROMOTED CONTENT


Also speaking to The Adviser, mortgage broker at Capita Finance Adam Donald backed the proposed reforms, suggesting the introduction of a standard upfront commission between 0.6 per cent and 0.7 per cent. 

“I think if you have a 0.1 per cent variant and you have a bit of a difference between 0.6 per cent and 0.7 per cent, and make it all industry standard, I think thats the best outcome for customers,” Mr Donald said.

Mr Crawford expressed his support for the standardisation of clawbacks, describing them as “the bane of [the broking] industry”.

“I’ve been [a broker] for 14 years, and clawbacks have always been a problem. [They’ve ranged] anywhere from 12 months, and in some cases, Ive heard of clawbacks getting out to years,” the Century 21 Home Loans broker added. 

Mr Donald similarly supported the idea, calling for an industry standard that would permit clawbacks within an 18-month period.

“I think it does allow everyone to be on the same page,” the Capita Finance broker said.

[Related: Major brokerage calls for remuneration reform]

Industry veteran questions calls for standardised commissions
samwhite
TheAdviser logo
samwhite

 

more from the adviser
Peter White Proposed separation of ASIC/APRA oversight a ‘problem’: FBAA

The broker association has voiced “serious concerns” of split...

Sam White Expanded Loan Market focusing on tech, CRM

The newly expanded group is setting its sights on technology, inc...

fixed rate RBA announces rate decision for March

The central bank has made its official interest rate decision for...

FROM THE WEB