Non-bank lender Homeloans has announced that it will increase upfront and trail commissions on some of its loan products at the end of this month.
Effective for all settlements from Monday, 31 July 2017, the upfront commission for all Homeloans FlexiChoice products (both prime and specialist) will rise from 0.60 per cent to 0.65 per cent (plus GST) while trail commissions will be paid at a rate of 0.15 per cent (FlexiChoice Prime previously had a trail of 0.10 per cent).
Existing Homeloans FlexiChoice product settled loans will continue to receive their current trail payments.
The lender said that it was making the commission changes to bring the FlexiChoice range into alignment with market.
Daniel Carde, general manager of third-party distribution at Homeloans, told The Adviser: “A review of our current commission schedule identified our Homeloans FlexiChoice products as being out of alignment with our other products and the market. This change is more about bringing the commission on that product range up to market, rather than just an outright increase in commission.
“In what is currently an ever-changing lending environment, we are constantly reviewing all aspects of our product suite. However, there are currently no immediate plans to change the commissions on any other products at this time.”
Touching on the commissions for brokers in general, Mr Carde noted that the ASIC remuneration report suggests that commissions “have the potential to cause conflicts between the interests of the consumer and the interests of the aggregator or broker” but argued that Homeloans “certainly sees no evidence of this type of remuneration leading to a conflict of interest”.
His comments follow on from The Adviser's publication of several industry responses to the consultation on ASIC's remuneration review report, including those from AFG, Connective, and Mortgage Choice.