Major bank handing volume bonus to brokers

by Calida Smylie14 Mar 2014
All Connective brokers are getting a pay-out from Westpac this month for hitting volume targets.

The aggregator has qualified for an additional 0.165% on deals settled in March, which means for all loans settled this month, its brokers will receive an upfront payment of 0.715%.

This includes the base upfront of 0.55% and the bonus upfront of 0.165%. All figures, provided by Connective, include GST.

The pay-out is part of Westpac’s new commission changes for the broker market, which it announced end of January. All its aggregation partners – not just Connective – are getting a pay-out this month if they made targets, a bank spokesman confirmed.

The bank is putting in place commission incentives that could see brokers earn up to 65bps of upfront commission. 

This month, nine aggregator groups qualified for 15 bps as they met new lending and conversion targets.

Two groups qualified for 10bps, as they met new lending target only, and three groups qualified for 5bps, as they only met conversion targets. Two groups did not qualify for any extra commission.

Connective director Mark Haron told Australian Broker the scheme is beneficial to brokers and Connective brokers have qualified each time for the bonuses since Westpac started the scheme.

In February, Connective's application value was $585,445,000 with a conversion rate of 76.2%, said Haron.  

He stressed the bonuses would be passed on to all Connective brokers.

A spokesman for VOW said the aggregator qualified for the additional 15bts on all deals settled in March based on February's results. VOW brokers will receive 65bts upfront on all loans settled and 15bts trail in the first year.

Westpac general manager mortgage distribution Tony MacRae told Australian Broker earlier this year the bank would be making recent trial changes to its commission structure permanent, as well as introducing new incentives.

"You'd be aware that we've had a 10bp volume incentive in place for the last six months.  We're going to put that permanently in place, but on top of that we're going to offer brokers and additional five points if they meet conversion hurdles.”

MacRae said the changes would take effect from the 1st of March, and that the volume targets were ones many brokers had already attained.

"We're looking at a 70% conversion target, which we see a good proportion of our broker and aggregator partners already achieve, but we also want to ensure we lift that by putting this incentive in place," he said.

MORE:

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Major bank annoucnes commission changes

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COMMENTS

  • by Melb Broker 14/03/2014 9:56:30 AM

    Go away Westpac, you're a blight on the broker channel!

  • by Patrick McMenamin 14/03/2014 10:11:51 AM

    Any significant commission disparity or bonus which has the potential to bias the recommendation made by a broker is a conflict of interest as is being required to meet volume hurdles to maintain accreditation.
    In my view your Credit Quote would have to not only disclose all but would need to explain why the recommended product was not only "not unsuitable" but "more suitable than other alternatives with less commission".

    I agree with Melb Broker. The bank which initiated the trailer cut whilst all banks continued to make monster profits now wants our patronage. Go away and take that "twister" St George with you.

  • by Disappointed Broker 14/03/2014 10:12:31 AM

    A small step in the right direction. But, Record Profits announced on a regular basis, but still a long shot from pre GST levels of commission. CBA no trail in first year, Homeside, no trail in first year, and those who do are .15%. Sick of hearing that the Major Banks support the Broker Channel, but without the financial rewards of 6 years ago when we all copped a 40% reduction in pay. They are laughing all the way to the Bank.