A non-major bank has announced changes to its existing upfront commission model to provide “a better deal” for brokers.
Teachers Mutual Bank Limited has introduced a deferred payment that will be calculated by reviewing the loan account balance at the end of the month after the 12-month anniversary of the loan.
The bank will now pay a top-up commission on the difference between the current loan account balance (net of any offset) and the loan account balance used in the initial upfront calculation of the loan, provided that the movement is greater than or equal to $20,000.
Head of third party distribution Mark Middleton explained, “This update to our upfront commission model has been made to ensure that customers obtain loans that are appropriate to their specific needs, whilst also providing brokers with recognition of an increase in the initial funds at the 12 month anniversary date.
“We want to support our broker partners in these challenging times. We have listened to their feedback and implemented a change that we think will best serve our members and our brokers.
“We have been planning and preparing for this change for a while and decided that now would be a good time to act in order to help those in the community."
Middleton also attributed the update to the bank's desire to “foster long-term relationships” with its broker partners.
The change will take effect from 1 January 2020, with backdated payments for January and February. The initial upfront commission payment remains unchanged.
Last week, Teachers Mutual Bank Limited announced it would continue to honour all trail payments for brokers up to 30 June in respect of their clients who have been granted financial hardship as a result of COVID-19.
“As a mutual bank, we pride ourselves on our great relationships with our members and this is the same for our relationships with our brokers," said Middleton.
"We strive to listen to the feedback from our brokers, and the enhancement of our upfront commission model is one example of acting on this."