Banks confirm commissions changes

by Rebecca Pike19 Dec 2018

As the end of the year draws closer, so does the date for many banks introducing changes to brokers' upfront commissions.

Bank of Queensland announced yesterday that from 1 January it will make the changes to broker remuneration in line with the reforms agreed to by the Combined Industry Forum and recommendations from ASIC and the Sedgwick Report.

All four of the major banks have confirmed with Australian Broker they either have already made the changes or are planning to do so by 1 January.

Banks will no longer calculate upfront commissions on the settled amount, but rather on funds drawn down under the facility net of balances held in an offset account, although banks differ on the day they will calculate this.

Natasha Kelso, head of BOQ broker, said, “These changes reflect the importance BOQ places on ensuring our customers obtain loans which are appropriate in both size and structure, are affordable and meet their individual needs and objectives at the time of borrowing.”

Upfront commissions for construction loans will continue to be based on the settled limit.

NAB and Commonwealth Bank’s commission changes came into effect in November.

Westpac and ANZ’s changes will come into place on 1 January. Westpac’s changes will be reflected across St George, Bank of Melbourne, and Bank SA as well.

Virgin Money also announced last week its broker commission changes would come into effect on 1 January.

Other banks to have made the change include Suncorp, MyState Bank, ING and Adelaide Bank.

Bankwest made the changes earlier in the year and they came into effect in July.