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.
Speaking with Australian Broker TV, Bankwest's head of specialist banking Ian Rakhit said that there was pressure from the board room on commissions.
"I think the environment at the moment is a very difficult one to see what the next 12 months looks like in terms of commission alone.
"We've seen tremendous pressures on funding prices, and I don't think I'll be alone in having pressure from the board room on what does that mean as far as broker incentives are concerned," he said.
However, Rakhit said while pressure continues, the bank would focus increasingly on rewarding quality applications - and this could even see brokers paid more.
"What I think will happen going forward is we will look at the quality of submission as being the real driver for commissions and incentives," Rakhit said.
"It makes philosophical sense that a broker who packages a deal correctly or costs me less in terms of processing time may well get rewarded better than a broker who passes an applicant in with no pay slips, no supporting documents, and costs me more in terms of processing time because we need to go back to the broker and the client for additional information."
Australian First Mortgage's Tanya White said broker incentives are in the spotlight.
"Commissions are under pressure as are our margins and our income. In the near future I don't see commissions dropping, but I certainly don't see them increasing either."
Want the full story? Click through to our exclusive Australian Broker TV report find out:
How banks are likely to pay commissions in the future
What lenders think of substituting a fee-for-service
Why heads of third party channels should be 'applauded'
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Two weeks ago, brokers and aggregators told Australian Broker exactly why they should be prioritising commission, and why they need to be 'profit mechanics'.
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