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Major bank announces commission structure changes

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Annie Kane 5 minute read

A big four bank has announced that it is to change broker commissions from next week, becoming the penultimate major lender to bring into effect changes off the back of the Combined Industry Forum package of recommendations.

As of Saturday, 24 November, the Commonwealth Bank of Australia (CBA) will calculate upfront commission for new home loans based on the drawn down loan balance, net of any linked offset account and redraw facility.

The calculation will be based on the 14th calendar day after the date of the drawdown to ensure that brokers are remunerated appropriately (i.e. after the customer has drawn down their funds).

The bank has become the third major bank to implement the changes, as suggested by the Combined Industry Forum’s reform package, following similar announcements by NAB and Westpac.


Speaking of the changes, Daniel Huggins, CBA’s executive general manager, home buying, commented: “As one of Australia’s leading home lenders, we recognise mortgage brokers as a key channel for customers who are looking to purchase a home.

“We are committed to supporting our brokers and driving good customer outcomes.”

Mr Huggins added that, following ASIC’s review of mortgage broking remuneration and the Sedgwick review, the bank has been “working with the Combined Industry Forum to ensure we continue to drive and deliver good customer outcomes”.

“As part of our work implementing the principles developed by the Combined Industry Forum, we are making changes to the way we calculate mortgage broker commission payments,” the EGM said.

It is believed that the bank will monitor and review all broker and customer outcomes of this change, including but not limited to the treatment of subsequent drawdowns.


The bank has not made any changes to its clawback policy.*

Lenders expected to make changes by the end of the year

CBA subsidiary Bankwest became the first lender to bring in the new commission structure, effected earlier this year.

However, NAB became the first major lender to implement the recommendations from the ASIC and Sedgwick reviews, which were backed by the Combined Industry Forum package of reforms after its changes came into effect this month.

NAB’s white label brand, Advantedge (and Advantedge-funded brands, such as Homeloans), announced the same changes, and Westpac followed suit after revealing that the bank and its subsidiaries (St.George, Bank of Melbourne and BankSA) would link upfront commission payments for standard home loans to net debt utilisation and inclusive of loan offset arrangements, rather than the approved loan limit, effective 1 January 2019.

The CIF recently hosted an event that further outlined its work on mortgage broking reforms and reiterated that lenders are expected to make the remuneration changes by December 2018.

*This story was update on 14/11/2018 to confirm that CBA's clawback policy is not expected to change under the new commission structure.

[Related: Bank announces new broker commission structure]

Major bank announces commission structure changes
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Annie Kane

Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Email Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.



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