Big banks talk broker targets

by Miklos Bolza24 Feb 2017
In Tuesday’s MPA Major Bank Roundtable, three of the big four banks sat down and talked about their views on implementing targets through the broker channel.

Warren Shaw, head of broker distribution at Westpac, said remuneration outcomes around volume targets in the third party channel were not something that any of the major banks on the panel would advocate.

“We’re all very much aligned in our views that we need to have complete transparency around what the rem model is. A broker shouldn’t be put into a situation where they have to make a choice that’s not in the customer’s best interests but it is in their best interest.”

However, he said a target-based approach to get third party practitioners to improve the quality of customer outcomes would be appropriate in certain circumstances.

Steve Kane, general manager of broker distribution at National Australia Bank (NAB) said that setting targets in relation to receiving any form of bonus was non-transparent.

“NAB’s view is anything that is not transparent can give rise to perceptions that it’s not in the customer’s best interests so I wouldn’t support that.”

As for targets around brokers who only wrote one or two transactions a year, there were issues around ensuring brokers knew how to adhere to the NCCP and responsible lending practices as well as understanding the policies, procedures and processes of the lender, Kane admitted.

However while there was some validity around targets of this sort, he said that NAB would not support their implementation.

Simone Tilley, general manager of retail broker distribution at Australia & New Zealand Banking Group (ANZ) also said she didn’t agree with the minimum targets.

Rather, she said that to achieve responsible lending targets, there needed to be a reasonable enquiry.

“The question we all need to be asking ourselves is what’s right for the customers. If brokers are doing that well and there’s an emphasis around that, that’s a tick.”

Related stories:

Major banks go head to head at MPA Roundtable

NAB throws full support behind broker commissions

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COMMENTS

  • by A concerned broker 24/02/2017 9:03:46 AM

    I see that 3 of the big 4 came to the table, but CBA did not. I feel alot can be read into this. Couple this abstention with CBA announcement of this week that some brokers will be deemed inactive and their accreditation revoked. I can see this is a point that CBA is out of step with other participants. ASIC should have a very 'Hard look' at this attitude by CBA and see is it 'Truly in the best interest of the client' and go from there.

  • by yup 26/02/2017 1:11:53 PM

    FWIW -the deregistration of inactive brokers was a suggestion brought up at a conference I was at by another broker who also used to be a bank bdm. If its the same thing.