St George Bank has sent out a lucid message to brokers - the future of trail payments is in their hands.
Speaking exclusively to Brokernews, St George's general manager for intermediary distribution, Steven Heavey, said trails would remain part of the makeup of broker remuneration in the immediate future, if brokers properly managed areas like portfolio arrears and runoffs.
"The industry really has to demonstrate that it can add value in that regard," he said.
He also used the opportunity to reiterate the bank's position on trail, saying the commission was paid to brokers in order for them to manage client relationships on an ongoing basis.
Speaking more broadly about commissions, Heavey revealed that he did not expect to make extra changes to the bank's current commission model, unless to simplify it, following "extremely positive" feedback from brokers.
"When we implemented the commission structure some time ago it was designed to achieve certain objectives. We have achieved those goals," he said.
"However brokers have said it can be a little complex and difficult to understand - so simplification will be the [next] focus."
St George brought its new commission structure to market in May last year, reducing up-front and trail commissions but allowing brokers to earn them back by meeting quality metrics.
As a final point, Heavey enforced St George's commitment to the third party distribution channel, saying the bank's limited branch footprint (outside of NSW) meant that brokers were 'very important' in the marketing mix to deliver service to its customers.
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