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BankWest has announced a reduced remuneration structure for brokers, following the end of its commission guarantee to its top six aggregation group.
The changes follow the bank’s decision last April to freeze commission levels for its key partners until the end of 2008.
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Under the new agreement, which takes effect on 1 march, a new upfront commission of 0.50 per cent will apply for all top six partners.
Trail commissions will now be 0.15 per cent in the first two years and 0.20, 0.225 and 0.25 per cent in subsequent years.
The upfront commission will be subject to review at the end of June this year.
Brendan O’Donnell, chief executive officer of choice aggregation services, said while reductions to commissions were certainly not welcomed, BankWest’s changes would bring its commission structure in line with that of other lenders.
Suncorp and nab are among other lenders that have recently reviewed their commission structures.
“It’s [BankWest's] also a simple commission proposition without cross-sell requirements, with a trail that rises over the initial few years of the life of the loan,” he told mortgage business.
Mr O’Donnell said the move also demonstrated that BankWest remained dedicated to third-party distribution.
“In our conversations with BankWest we’ve been assured of the lender’s ongoing commitment to the broker channel as well as the continued strength of its broker proposition – around 80 per cent of its business is currently originated by brokers.”
CBA’s acquisition of BankWest may also bode well for brokers, he said.
“i think an important point is that we’ve had firm confirmation from the lender that it’s in a stronger funding position as a result of the CBA acquisition,” he added.
