Clawbacks “there for a reason”

An industry aggregator roundtable has discussed the topic of clawbacks and their place in brokers’ overall remuneration structure

Clawbacks “there for a reason”



While clawbacks are sometimes seen in a negative light, the heads of two aggregators have come out in support of the policy, saying it has been put in place for a reason.

Mark Haron, director of Connective, said that clawbacks are simply a part of the commission structure’s economy.

“If we want the higher upfront commissions, then you have to have clawbacks in that equation from the lender’s perspective. It just primarily comes down to that,” he said at the 2017 Aggregator Roundtable hosted by Australian Broker’s sister publication Mortgage Professional Australia (MPA) yesterday (15 August).

While clawbacks may have had the additional benefit of reducing churn, they were there for economic reasons, he said.

“If you want 25 basis points upfront and 15 trail, the lender will probably pay you that and not give you any clawbacks because they haven’t got much at risk. They haven’t pushed all their upfront commission out the door at the beginning.”

Tanya Sale, CEO of Outsource Financial, had a slightly different angle, saying that clawbacks were specifically there to prevent churn. As a result, she was not a fan of taking them away, she added.

She acknowledged that common sense had to prevail with regards to the clawbacks system.

“I think the lenders think this as well. We’ve had situations where we’ve had clawback, we’ve appealed it, and the lender goes ‘You know what? You’re right. Fair’s fair,’ and they haven’t worried about the clawback.”

The policy was not going away and anyone who thought so was dreaming, she added.

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