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A lender has announced that it will alter the manner in which it pays upfront commissions to brokers by introducing a six-month post-settlement review period.
ING has announced that it will introduce a six-month review period for upfront commissions paid for broker-originated home loans.
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At present, the non-major calculates the upfront commission, net of offset, on the fifth day following settlement of the associated loan.
However, while commissions will continue to be calculated by ING five days post settlement, brokers will now be remunerated for subsequent drawdowns of the loan, which exceed $10,000, over an additional six-month period.
Moreover, the bank has announced that the review period, which will be effective from 1 July 2019, will be backdated to apply to loans settled from 1 January 2019, with the first payment to eligible brokers scheduled for August 2019.
ING’s head of third party distribution, Glenn Gibson, commented: “We’re excited to announce this change, which reflects our continued commitment to supporting our broker network.
“The decision to implement the review comes in response to concerns about commission inequity, highlighted to us by brokers via recent opportunities we’ve offered for them to share their feedback.”
Commission payments based on the amount drawndown by a borrower came into effect at the start of 2019, to reflect recommendations from the ASIC and Sedgwick reviews, which were backed by the Combined Industry Forum's (CIF) package of reforms.
[Related: Borrower fee flagged as option to mitigate clawback risks]
