Powered by MOMENTUM MEDIA
the adviser logo
Broker

Bank to implement broker commission changes

by Charbel Kadib4 minute read
Calculator and Australian dollars

A non-major lender has announced that it will change the way it remunerates mortgage brokers as it looks to strengthen ties with the third-party channel next year. 

Effective 1 March 2019, Citi will begin calculating upfront commission payments for home loans on the drawn balance, net of offset, with the commission calculation made seven calendar days from settlement.

Citi will also calculate trail commission on the utilised balance, net of offset account balance.

Citi noted that the changes will not be applicable to loans settled prior to 1 March 2019.

Advertisement
Advertisement

The bank has said that the changes reflect recommendations from the ASIC Review of Broker Remuneration and the Sedgwick review, both of which were supported by the Combined Industry Forum's (CIF) reform package.

Citi added that formal advice will follow, in conjunction with an amended Product Schedule to reflect the remuneration changes. 

The lender is expected to strengthen its ties with the broker channel from February 2019.

All four major banks have committed to adopting the new commission structure, as have lenders such as Adelaide Bank, AMP Bank, Bankwest, ING, Macquarie Bank, ME Bank, MyState Bank, Suncorp Bank, Virgin Money, and the Bank of Queensland. 

While Bankwest was the first lender to bring in the new commission structure (bringing it into being on 1 July 2018), NAB was the first major bank to move to the new commission structure, with both NAB (and its wholesale funding business Advantedge) moving to the new payment model last month. 

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 the end of this year.

[Related: Non-major confirms broker remuneration changes]

calculator money dollars ta

Charbel Kadib

Charbel Kadib

AUTHOR

Charbel Kadib is the news editor on The Adviser and Mortgage Business.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

PhilipLowe mb

RBA attempts to curb runaway inflation

On Tuesday (5 July) the Reserve Bank of Australia (RBA) announced at its monetary policy meeting it will increase the...

READ MORE
flood qld suburbs ta

Home loan support offered to NSW flood victims

Widespread persistent heavy rain over large swathes of NSW over the weekend and into Monday (4 July) has caused major...

READ MORE
Dr Jane Rennie CPA

Accountants to decline ‘capacity to repay’ requests

The leaders of CPA Australia, the Institute of Public Accountants (IPA), and the Chartered Accountants Australia and...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more