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Bankwest has announced it is implementing changes to its broker commission payment model.
According to a statement, it has made the decision to do so in order to align itself with evolving industry practice and regulator expectations
The changes, which will be effective on settlements from 1 July 2018 will include the reintroduction of Year 1 trail commission.
It will also include the reduction of trail commissions in year 3 to 0.15% and from year 5 and onwards to 0.20% and the adoption of the Combined Industry Forum (CIF) recommendations on paying commissions on utilised funds and net of offset.
There will be no changes to the up-front commission rate.
Bankwest GM for third party, Ian Rakhit said, "Bankwest has been a very long standing supporter of the Broker industry, going back to the very start some four decades ago, and we remain committed to Brokers as a channel of choice for customers.
"We support the current up-front and trail model as well as the improvements to the model outlined in the ASIC review and the CIF recommendations.
"We understand the lack of Year 1 trail has been outstanding for some time and we are pleased to reintroduce this to bring us back in line with the market.
“Our contract stipulates that trail commissions represent payment for continuous customer maintenance and services and we believe trail remains warranted for Brokers to ensure ongoing support is provided to customers they refer to Bankwest."
These reforms will be welcomed by many who are supporting industry changes ahead of the Royal Commissions final findings. Earlier this week LoanMarket's Sam White called out for companies not to wait, but suggested seven reforms the industry could take on.
