Brokers who fail to regularly reconcile their upfront and trailing commission statements are seeing millions of hard-earned commission payments either forfeited to their aggregators or held in unclaimed/unmatched commission accounts.
National Finance Institute managing director Peter Heinrich has issued a warning to brokers that the incidence of unclaimed or unmatched commissions is a "very common problem" in the industry, and that some aggregators may be holding millions in unpaid payments.
"Some brokers mentioned to me recently they had been quite slack about reconciling their commmissions from their aggregators and found when they did they were owed several thousand dollars," Heinrich said. "One broker who spoke to me said that because he was very quiet at the moment he reconciled his loan book and found he was owed over $40,000 in unclaimed or unmatched commmissions."
Some brokers forfeit their upfront and subsequent trail commission if not claimed within 12 months of receipt by the aggregator, while some aggregators retain commission entitlements if not claimed by members in a time period as short as three months.
Reasons for unmatched commissions can include having more than one surname on the loan, leading to commissions being paid on an alternate name, or names being listed out of order.
Heinrich said the blame for the problem primarily lies with brokers who fail to reconcile their commissions monthly to ensure they are paid for settled loans. In some cases, aggregators are also not being proactive in matching commissions they are holding in their accounts.