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ISCOVER
Jessica Darnbrough
One of Australia’s banks has taken a bold step to increase its third party volumes by lifting its upfront and trail commissions, effective immediately.
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Macquarie bank announced it will lift its upfront broker commission from 0.60 per cent to 0.65 per cent. Furthermore, the lender said it would increase its flat trailing commission from 0.15 per cent to 0.20 per cent for year four onwards.
According to a statement from the bank, the changes “reflect our ongoing recognition of the value of the broker channel and our commitment to simplicity and transparency in commission structures”.
While Macquarie is not the first bank to increase commissions since a wave of cuts rocked the industry in 2008 it is the first lender to deliver a comprehensive increase across both up front and trail.
Speaking to The Adviser, Mortgage Choice chief executive officer Michael Russell said he was not surprised to see one of Australia’s non-majors lift its broker commissions.
“The second tier lenders are hungry for business,” he said.
“Macquarie’s move sends a strong signal to the rest of the second tier players.”
But despite Macquarie’s decisive move Mr Russell said the industry was unlikely to see any further “broad based” commission changes moving forward.
“I believe the economics of the third party channel are fairly priced. As such, I don’t hold out much hope for broad based commission increases over the next year or so.”
