Specialist lender to tackle channel conflict

by Miklos Bolza06 Sep 2017
With the vast majority of its business coming through brokers, Private Mortgage Australia (PMA) will be covering the topic of channel conflict and how its referral fees help brokers deal with this contentious issue.

The firm holds bi-monthly webinars which keep brokers up-to-date with PMA’s plans to tackle the ever-changing lending landscape, managing director Tony Barbone told Australian Broker.

“Brokers are becoming more concerned with channel conflict which makes this such an important topic for us at PMA. Brokers are the life-blood of our business – we receive 90% of our business from broker referrals and we want to keep it that way.”

The lender, which currently has 3,000 brokers in its database, does this through its referrer fees which it sees as rewarding the hard work its brokers do.

“It doesn’t matter if a borrower comes direct to us or via a referrer, the Approval Fee is always the same and we have an allowance for a referrer,” Barbone said.
 
Loan Amounts Approval Fee incl Referrer Fee Referrer Fee
Less than $100,000 4.00% (plus GST) 1.00% (plus GST)
$100,001 - $500,000 3.50% (plus GST) 1.00% (plus GST)
$500,001 - $1,000,000 3.00% (plus GST) 1.00% (plus GST)
$1,000,001 - $2,000,000 2.75% (plus GST) 0.75% (plus GST)

“We also allow referrers to set their own Service Fee (or Mandate) which is paid in addition to the fixed referrer fee.”

Since the average loan at PMA is six months, brokers are paid this fee within 24 hours of settlement instead of trail, Barbone said, adding that PMA has never had any clawbacks on its broker commission.

The lender also has a subsequent referral fee paid to brokers if a client goes back to PMA directly instead of through that same individual broker.

“The subsequent referral fee is our way of saying thanks to our brokers that have already provided us with the introduction to the client that resulted in a successful loan advance. We see it as good use of the allowance for referrers within the Approval Fee,” Barbone said.

“It’s pretty rewarding to call up a broker and ask them to send us an invoice to get paid on a loan that they did little or no work on.”

However, he said PMA always honours current borrower mandates over any previous paid referrers.

“It’s our way of drawing a line in the sand in case a borrower has moved on to establish a new broker relationship. At the end of the day, we pay the broker based on the client’s direction.”

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