Login
ISCOVER
ING DIRECT today announced “simple and straightforward” changes to its broker commission structure.
The new structure, to be phased in from October this year, will be based on volumes and conversion levels and measured at an aggregator level.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Under the new structure, upfront commissions will range from 50 basis points to 65 basis points, dependent on groups’ annual settlement, conversion ratios and volumes.
Groups that settle in excess of $200 million per year with a better than 70 per cent conversion rate will achieve the maximum commission of 65 basis points.
Trail commissions will be 15 basis points for the first three years and will rise to 20 basis points from the fourth year onward.
A 100 per cent clawback will apply to all loans closed within 12 months and 50 per cent on loans closed within 13-18 months.
Brett Morgan, executive director of intermediary mortgages at ING DIRECT, said the review had been made after several weeks’ of valuable consultation with aggregator and broker partners.
“We were told to pay trail from day one as brokers manage their customers from settlement. We were also told to provide a fair balance of upfront and trail, and ensure that the criteria for determining upfront commissions were simple and straight forward,” he said.
While he was quick to stress that any reduction to commissions “is not wanted”, Peter Bromley general manager of LJ Hooker Financial Services, commended ING’s approach to its commissions restructure and said it showed that they had listened to broker partners.
Mr Bromley said the fact that ING maintained a trail commission from the first year, unlike a number of other lenders, demonstrated their recognition of the total customer experience brokers offer.
“For groups like LJ Hooker, where we are a one-stop-shop, trail in the first year is quite critical,” he said.
“Those lenders that have removed first year trail commissions might potentially find it more difficult to compete with a lender like ING who has competitive products and a strong service proposition,” he said.
Published: 16-07-08
