Australian Broker forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Commission truth: Up, stable... or down?

Notify me of new replies via email
Australian Broker | 13 Jul 2012, 08:00 AM Agree 0
EXCLUSIVE: Leading industry heads of third party have told Australian Broker commissions are under pressure, and have forecast exactly what and how they expect brokers to be paid over the next year and beyond
  • Country Broker | 13 Jul 2012, 10:01 AM Agree 0
    OK why are some other banks and commentaors talking about possible increases due to market share concerns ? Is this CBA/ Bankwest spin , I am suspicious of this type of commentary to say the least.
  • Garry | 13 Jul 2012, 10:29 AM Agree 0
    Given the fact tah brokers do most of the work for the bank now in the electronic submissions and ordering valuations I feel its time the banks started to increase the commission rates. The argument of funding costs doenst hold much water any more given the fact the banks have dramatically increased their margins. The banks need brokers to deliver customers to them. I say its time to share the spoils a little more.
  • David | 13 Jul 2012, 10:42 AM Agree 0
    I agree with Country Broker and find it interesting that this is the first thing that Bankwest have to say about brokers after getting the green light to operate under CBA's banking license. Bankwest's track record for supporting the broker channel is pretty poor as it is and we all know what the CBA think.
  • Terry | 13 Jul 2012, 10:54 AM Agree 0
    Im with you Garry, they have got more than a good run out of the arguement of cost of funding. The fact that they now enjoy simalar margins to the that of the late 80's and early 90's isn't a secret. its definately time to renumerate the broker (their so called business partners)for the additional work we undertake such as data entry (e-apps)etc which reduce the banks overhead costs. from memory all these all these changes took place to streamline the lending process and reduce the costs associated with the loan approval process in return the promise of some of those cost saving going towards increases to broker commissions. well the opposite happened there.
  • broker 2 | 13 Jul 2012, 11:02 AM Agree 0
    Maybe the aggregators could now go to the lenders and mention that now the brokers are doing the lion share of the work through electronic submission, and now accuracy in applications has increased, that the brokers should be paid a higher commission! If the lenders value our channel so much, they should pay for it.
  • ozboy | 13 Jul 2012, 11:23 AM Agree 0
    Pressure from the boardroom, Mr Rakhit perhaps it's time to push back and advise the board exactly what it is we do and the cost benefits to the bank. Wonder if the boards incentives are under pressure?
  • Broker | 13 Jul 2012, 11:43 AM Agree 0
    I agree 100% with all of the above comments, funding pressure my backside.If there is really so much funding pressure, perhaps the banks can explain why it is not having a negative effect to their bottom lines. Lies and more lies , banks that treat brokers like idiots will be the ones that lose out, and rightfully so. Just look at the drop in CBA's and Westpac's collective market share over the past 2 years, that is clearly broker driven folks
  • Craig Dres | 13 Jul 2012, 11:51 AM Agree 0
    Banks get out theer and do your job. Far to many Bnak BDMs did little past 3 years after GFC and now must build closer broker relationship or suffer. I find it ironic that BDMs that didnt answer calls or communicate now suddenly want to see me again!!
  • Steve | 13 Jul 2012, 12:13 PM Agree 0
    CBA just about the only lender that doesn't pay trail commission during the 1st 12 months of a loan. The y did not increase upfront commissions to compensate, but are extremely quick to "claw-back". Let's get down to business and pay what is right!!
  • Ian | 13 Jul 2012, 12:19 PM Agree 0
    Bankwest are kidding aren't they? They already pay less than anyone (except Westpac) and they are 'feeling the pressure'. Wouldn't be so bad if Bankwest were able to offer real service.
  • iMac | 13 Jul 2012, 12:48 PM Agree 0
    It is Not up to the aggregators to fight our fight for more commission - nor any body else.

    Brokers,, man up, stand together and don't write loans with banks that pay you rubbish commissions.
    It IS as simple as that. Its called the power of the market. Free entiprise.
    Vote with your pen (or computer) and do not write loans with institution that won't pay you properly.
    This is basic business practice.
    This equation is Not complex. Its not hard.
    And 95% of occasions you can find an equal or better deal for your client, and that pays you better comm, if you really do your homework.
    Don't rely on the software everytime to do all your research.
    There are other important factors that ARE valuable to client. Its Not always about the cheapest interest rates.
    Brokers are HUGE chunk of the new loan market, but we do not use this potential power to our advantage.
    And who's fault is that ???
    Brokers !!!!!
    When ever the banks think they can get away with it, who is the soft target they know they can take a slice out of ??
    Brokers !!!
    In the words of Chopper Read "Harden the _ _ _ _ Up".
  • Positive Broker | 13 Jul 2012, 02:55 PM Agree 0
    I'm with you iMac. It took me a while but I have now trimmed my lending panel and only support lenders who treat me as a "business partner" rather than a number. And guess what it doesn't include the banks mentioned here.
  • Jeff Purcell | 13 Jul 2012, 06:16 PM Agree 0
    It's not for me to tell the Banks how to run their businesses, after all they are very powerful: they have the money. But competition is increasing every day, clients have become far more interest rate savvy, particularly since the Banks have been running refinance campaigns.
    It is now more the norm that the clients are enquiring and requesting alternate lenders with lower interest rates.
    .Aggregators will now have to earn their fees and brush up on their negotiating skills with the lenders. Independent consultants should be able to provide accurate profitability models on each lenders home loan products for the Aggregators.
    Ultimately the Banks will provide the funds and the Brokers will provide the clients. So with this in mind there is room for an increase in remuneration to brokers by way of paying trail in the first year.
  • Broker in the West | 14 Jul 2012, 12:28 PM Agree 0
    100% agree with iMac.....we broker can drive the greedy banks out of the market if they dont treat us their "Business Partners"...
  • SteveOz | 15 Jul 2012, 10:02 PM Agree 0
    Well done positive broker Awesome move. Resign your accreditation with those lenders you don't support them you have no need to include them in your offering to your clients. Wonder what would happen if a heap of brokers resigned from CBA / BWA....prob nothing but it would be interesting to see the boot on the other foot for a change.
  • Tony Thompson | 16 Jul 2012, 02:09 PM Agree 0
    Instead of resigning from the lenders, how would it work if for two weeks at a time, all brokers boycotted 1 lender. spread it through all the lenders so they can see we are a force. but I guess that to do that, all brokers would have to work together to show we are a force.
  • Alan | 16 Jul 2012, 07:07 PM Agree 0
    LAst 5 yrs brokering, never did i send a deal to CBA. Rates not competitive, no respects to brokers (one time even charge to re-accredite). And their lies bout funding cost. Not keen ever to involve with them! Unless their current rate is lowest among all.
  • BRIAN TAYLOR | 27 Jul 2012, 03:33 PM Agree 0
    WHEN ARE BANKS GOING TO REALISE THAT BROKERS ARE THEIR BEST FRIENDS AND SHOULD BE LOOKED AFTER AT ALL COST. REDUCING COMMISSIONS WILL ONLY LOSE THE BANKS BUSINESS. REDUCE COSTS BY REDUCING YOUR STAFF LEVELS AND CUT OUT UNNECESSARY EXPENSE. THE BROKERS ARE YOUR BEST SALES TEAM. THEY COST YOU NOTHING AND SHOULD BE PAID MORE NOT LESS.
  • BRIAN TAYLOR | 27 Jul 2012, 03:37 PM Agree 0
    WELL SAID TONY THOMPSON - THE ONLY WAY TO MAKE THE BANKS SIT UP AND REALISE HOW IMPORTANT WE ARE TO THEM IS FOR US ALL TO AGREE TO "BAN A BANK" FOR, I BELIEVE, ONE MONTH AT A TIME. LET'S START WITH WESTPAC - THEY WERE THE FIRST TO ATTACK BROKER COMMISSIONS. ALL BROKERS - LET'S MAKE SEPTEMBER "NO LOANS TO WESTPAC MONTH" AND SEE WHAT HAPPENS
Post a reply