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Specialist lender Private Mortgages Australia has introduced a “subsequent referral fee” in a bid to alleviate broker concerns about channel conflict.
Responding to a survey conducted by The Adviser in June which found that 88 per cent of brokers were more concerned about channel conflict than they were a year ago, and that 78 per cent of respondents had actually lost a client due to channel conflict, PMA said that it wants to reward referrers for good leads.
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“We get a lot of repeat clients (which is uncommon in private lending), so we believe we’ve got to be doing something right,” PMA said.
“We want to reward referrers for providing us with a good lead and will continue to do so no matter how many times that client comes back to us directly. It’s basically free money for our referrers, but we believe they deserve it.”
The lender’s subsequent referral fee is paid to the referrer if a borrower returns to PMA “directly after taking a previous loan with us via a referrer”. The lender argues that this initiative will put "a stop to channel conflict".
“PMA receives over 90 per cent of our business from broker referrals and we want to keep it that way.”
PMA added that if clients return for a subsequent loan through a new referrer, PMA will pay the new referrer “based on the client’s updated direction to pay”.
[Related: Opinion: Is CBA shorting mortgage brokers?]
