Non-major offers brokers commission bonus

by Calida Smylie01 Apr 2014
ME Bank is boosting its appeal by offering its accredited brokers extra commission over the next three months.

The lender is offering its 4,600 brokers a 10bps bonus upfront commission, on top of current commissions, on all home loans settled between today and 30 June. The bonus will be paid to brokers in the monthly commission runs.

ME Bank national broker manager Stewart Saunders told Australian Broker they are offering this bonus after listening to broker feedback.

“For us the commission campaign is a way for us to get into the consideration set for brokers. We understand that when making recommendations the brokers will put a number of banks on the table,” he said.

But ME Bank does not think it should offer too high a commission as that could affect why brokers recommend a product, instead of meeting the needs and requirements of their customers, Saunders said.

“We are a smaller lender in the market and we didn’t want to put into place greater commissions than other lenders in the market. It isn’t the highest commission rate in the market, because we understand that commissions are just one piece of what goes into the consideration set for brokers when they’re looking at what loan best suits the customer.”

He feels the bank’s current offering – a three-year fixed rate of 4.74% – stands out as an “attractive” product.

“We’re looking at commissions to raise the profile of that offering and obviously look at other ways we can help support brokers.”

ME Bank pays 0.60% upfront and has trail commission of 0.15% from the first day of the loan, so the 10 extra basis points takes the upfront to 0.70%.

The bank is following the footsteps of other lenders who are offering bonuses as incentive on top of commissions.

“There are a number of other banks in the market doing incentives for commissions, be it volume-based through aggregators or standard increases in commissions across the market, so we do see it as something that is being looked at across the market,” Saunders said.
 
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COMMENTS

  • by Dissapointed 1/04/2014 9:40:16 AM

    On the surface that's fine, wait till comes time to pay up and they come up short with loopholes, as they did with the last bonus offer. They make no allowances for settlement periods, any deals lodged in the final month and do not settle will not be paid for, be wary.

  • by Mario 1/04/2014 9:52:08 AM

    If lenders want to win broker business, they should seriously consider removing clawbacks. Bonus commissions are short term and I wonder how effective they really are.
    The first lender that removes clawbacks will win the race! (my view).

  • by Troy McLachlan - Future Financial 1/04/2014 10:06:16 AM

    @Mario Future Financial have No Clawback and trail from day 1.