In a show of support for the broking industry, BankWest has moved to boost third-party market share through guaranteeing broker commissions with six major aggregation groups until the end of the year.
BankWest’s announcement comes hot on the heels of Westpac’s shock decision to slash broker commissions, fuelling fears other major banks will follow.
Michael Russell, managing director of Choice Aggregation Services – one of the aggregators to secure the commissions guarantee – said BankWest has sent a clear message to lenders that are considering major commission reductions.
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“BankWest has been a strong supporter of the broker channel for 15 years and the latest announcement bears testament to the long-term view the bank has taken,” he said.
Mr Russell described Westpac’s commission cuts as “short-term and knee-jerk and not in the spirit of a long-term partnership”.
Westpac has cut broker commissions by as much as 40 per cent.
“Westpac’s new commission structure is not where the watermark is,” Mr Russell said.
With commission cuts set to hurt many in the industry, a number of aggregators – including Choice Aggregation Services – are looking at ways to help cushion the impact on their members of higher funding costs.
Mr Russell said Choice Aggregation Services was working with its member base to help them improve efficiencies, cross-sell other products, embrace online lodgement and review commission structures.
“We’re doing what we can to work with lenders. We very much see them as partners and we’ll do everything possible to help them alleviate some margin pressure,” Mr Russell said.
