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Delays with commissions being paid to PLAN and Choice brokers are expected to correct by next month, with the executive chairman saying the company “deeply regrets” the inconvenience to brokers.
The executive chairman of the Loan Market Group, Sam White, has apologised to PLAN Australia and Choice Aggregation Services (Choice) brokers affected by commission payment delays over the holiday period.
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A “significant number” of brokers aggregating under PLAN Australia and Choice – which now form part of the Loan Market Group – were not paid upfront and trail commissions after a payment run was missed on 31 December.
Several brokers had reached out to The Adviser to flag the issue of missing payments, which have been causing cash-flow headaches. This has been exacerbated as it comes at a time of year when most people’s finances are already stretched.
Speaking to The Adviser about the issue, executive chairman Mr White flagged that while a commission run was made on 24 December as normal, the run that was scheduled for 31 December was missed after a “perfect storm” of issues.
He revealed that the issues included a combination of the Christmas holidays (meaning many staff were on leave), coupled with staff being sick with the latest COVID-19 outbreak, and a commission system changeover.
The issue has only affected Choice and PLAN Australia brokers (FAST and Loan Market brokers were not impacted, as they run on a separate system).
According to the executive chairman, about 10 per cent of the payments were missed in December, however these were caught up in January.
Mr White explained that the two groups on the “old system” (still migrating over from NAB) were impacted: “We paid a payment on the 24th and then there were three business days in the following week left in December. We didn’t do the payment on the 31st. The reason for that was, really, we were just stretched on staff. With COVID and people being away, we missed out on one. We’ve been – since then – pushing to catch up.
“We’re just really disappointed that it has affected PLAN and Choice brokers. It has affected a significant number to varying degrees; it hasn’t affected all their payments, but it has affected that payment run between Christmas and new year.
“We really regret the fact that this has happened... We deeply apologize.
“The reality is that we’ve been impacted a fair bit by the perfect storm between Christmas, COVID, and commission system changeover. So that is the reason for it and we are working as hard as we can to catch up; we know how important it is to get the brokers their money.”
The chairman said that while a commission payment run has been made since the issue occurred, this mainly caught up with the missing payments. However, the knock-on effect meant the payments for early January have also now been delayed.
He stated: “With catching up in January, some of the ones that were meant to be paid in the first two weeks of January have now pushed into the second two weeks of January. So the team is working really hard now to get those fixed.
“This will be fixed by the end of January [the next payment run is scheduled for 31 January] and we sincerely regret the inconvenience that this has caused our brokers. And it is really disappointing.
“Within three or four weeks from the issue, all of the brokers that have been impacted by this will be made whole. So, we’re very keen to make sure to get it right.”
Mr White told The Adviser that PLAN Australia will be migrating to the new payments system in February, with Choice joining in April of this year.
The executive chairman outlined that any brokers suffering from hardship as a result of the missed payment should reach out to Sean Reid (the former head of Choice aggregation and operations).
He concluded: “By February, we will see that all this pain will be behind us. And we’re all looking forward to that happening.”
Commission payment delays have been plaguing the industry for some time, with several lenders having missed payments in recent months.
From major lenders (including Westpac and its subsidiaries) to non-major lenders (including Suncorp), brokers have been waiting weeks – if not months – for commissions to be paid for loans settled earlier in the year.
For example, Westpac recently advised that there was a delay in both upfront and trail commission payments for the October 2021 period for all businesses under the Westpac Group, including St.George, Bank of Melbourne and BankSA.
As a result, many of the commissions were not paid until the end of November/early December. This followed a similar delay in September 2021.
Indeed, several brokers have told The Adviser that loans settled in August and September 2021 from multiple lenders were not paid until December, causing cash-flow issues (particularly for new brokers/brokerages without a sizeable trail book to rely on).
Have you been impacted by commission payment delays recently? What solutions would you like to see brought in to reduce payment delays? Let us know by emailing:
[Related: Loan Market to move forward with MyCRM]
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