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A new bank that is about to enter the third-party channel has promised brokers generous commissions and a favourable clawback policy.
Bank of Sydney will pay brokers an upfront commission of 0.70 per cent and trail from year one of 0.20 per cent, according to third-party consultant Steve Sampson.
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Clawback will only occur in the first year and will be limited to 75 per cent, he added.
Mr Sampson told The Adviser that Bank of Sydney would do a “soft launch” of its third-party business in the last quarter of 2014 with some selected brokers.
That is so the bank can make sure all its systems are working properly by the time of the full launch in the first quarter of 2015.
Mr Sampson said Bank of Sydney planned to “turn channel conflict on its head” by getting branch managers to help brokers sign-up customers.
“They can come to the bank and open accounts with the broker. Our bank managers will be mobile and they’ll be able to sign the mortgage documents,” he said.
“The branches won’t be undercutting – they’ll have the same products and prices as the broker channel. That delineation is clear: we’ll be working with the broker and not against them.”
Mr Sampson said Bank of Sydney would offer a “very competitive” and “well-priced” product suite, and that borrowers would be given a cash rebate when they refinance.
Brokers can expect to deal with experienced staff and to receive conditional approval within 48 hours for loans, he told The Adviser.
“We’re in the market to win business. That will be seen from a product perspective, a broker remuneration perspective, a fairness-to-broker perspective, a turnaround perspective and a customer perspective,” he said.
