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Bank announces product-centric commission model

by James Mitchell7 minute read
The Adviser

An Australian challenger bank will reward brokers for writing certain home loans that support the group’s “primary bank strategy”.

ING Direct yesterday announced a new upfront commission model that will come into effect on 1 January 2016.

In a statement, the bank said the “simplified commission model” will be structured around “individual accounts”, as opposed to the current model’s focus on aggregator volumes and conversion rates, ensuring “transparency for brokers and alignment with the bank’s primary bank strategy”.

“We reward our customers for their loyalty and for supporting our business strategy to be the main bank for Australians,” ING Direct head of third party distribution, Mark Woolnough, said.

“It made sense to do the same for brokers, resulting in our new, simplified commission model which will reward the type of business that best supports our primary bank strategy – lower LVR, Orange Advantage home loans,” he said.

The minimum upfront commission will remain unchanged at 50 basis points (plus GST), with the maximum increasing to 80 basis points (plus GST) until 30 June 2016.

ING Direct said the new commission model was finalised following consultation sessions with aggregators and will apply to new residential loans with new to ING Direct security property settled from 1 January 2016.

[Related: Suncorp ups broker commissions and cuts rates]

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James Mitchell

AUTHOR

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.

He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.

James holds a BA (Hons) in English Literature and an MA in Journalism.

 

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