Following Adelaide Bank’s decision to change its broker commission structure, Australia’s other lenders have confirmed to The Adviser that they have no plans to change their respective payment structures.
Yesterday Adelaide Bank said it would give its aggregators and their broker partners the ability to choose their own commission structure.
The bank’s general manager of third party lending Damian Percy said the various commission structures include two increased upfront commission models with tiered clawback provisions and an all trail model.
Brokers that choose the “all trail” model, will receive 40 basis points in trail, but no upfront payments.
Meanwhile, brokers that prefer the increased upfront commission structures, can pick between 65 basis points upfront, with 15 basis point trail or 70 basis point upfront with 15 basis point trail.
“The higher the upfront commission however, the greater the clawback,” Mr Percy told The Adviser.
“We have never had clawbacks in the past, but with the removal of DEFs, we had to rethink our commission structure and we think this “choose your own commission” approach will suit everyone.”
But while the exit fee ban has prompted Adelaide Bank to restructure its commissions, it seems other lenders are not in the same rush.
Yesterday, both Citibank and ANZ told The Adviser that they had no plans to change their payment structures in the near future.
ANZ’s head of broker distribution Meg Bonighton told The Adviser that the bank did not see “any immediate need for change”.
“We take a consultative approach in our relationships with broker partners. We know brokers want a lender that provide confidence and certainty, while also recognising the value that they add,” she said.
“While we carefully monitor the economics of the business, we don't see any immediate need for change and our current plans are to work within the existing model to grow our broker business.”
Citibank echoed Ms Bonighton’s comments, with a spokesperson stating that the bank’s current commission structure was “fair and transparent”.
“Citibank consistently monitor and review its competitive position versus the market. At this stage we consider our commission structure being fair and transparent to our brokers, so we don’t have immediate plans for changing it,” the spokesperson said.