ANZ is the last of the major banks to revise broker commissions, with upfronts to be cut from 0.70 to 0.50 per cent from November 1.
But brokers can still maintain the current 0.70 per cent commission rate should they achieve sales volumes targets, conversion rates, on-line submission requirements and write larger loans.
Brokerages that reach sales targets of $500 million per annum for example will receive 7.5bps of the additional 20bps – a move that has been welcomed by higher volume groups.
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“We’ve found ANZ the most consultative of all the banks,” said Warren O’Rourke, national affairs manager at Mortgage Choice. “While we don’t welcome any changes to broker commissions we feel that ANZ has taken on board many of our suggestions.”
X Inc CEO Jennifer Nielsen agreed. She said it was an opportunity for brokers who met best practice to excel.
“The important message for mortgage brokers from here is to get on top of the key quality metrics,” Ms Neilson said.
ANZ has also reduced trail commissions to 0.15 per cent for the first three years; it will rise to 0.20 per cent from year four. The changes apply to all loans settled from August 15.
The utilisation clawback will also be removed for all new and existing loans from this date.
Explaining the new structure, ANZ’s managing director of mortgages Michael Rowland said: “We looked at the total economics around upfront and trail... it works for us to pay trail that first year.
“We have increased the trail after the fourth year... there is more value for us in clients staying on the books longer.”
At a glance
• ANZ cuts upfront commissions from 0.70 to 0.50 per cent
• 20 basis points bonus on upfront commissions should brokers hit targets
• Trails cut from 0.20 to 0.15 per cent
