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Jessica Darnbrough
The commission cutting cycle is well and truly over and brokers could soon see greater incentives one stakeholder has forecast.
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Speaking to The Adviser, Liberty Network Services’ Brendan O’Donnell said competition in the mortgage space would encourage lenders to incentivise brokers rather than reduce commissions further.
“I definitely think commissions will stabilise from here on in,” he said.
“In that vein, I think we will see lenders offer different sorts of incentives. If you are a stable writer with one or more particular lenders, you will be rewarded in one way or another.
“Certainly at Liberty we are not entertaining the idea of commission cuts. In fact, if you meet certain hurdles we will pay 30 basis points in trail in the first year – which is among the best in the marketplace.”
Mr O’Donnell’s comments come just days after Oxygen’s James Green said he expects to see broker commissions increase as competition between the majors and Australia’s non-major lenders heats up.
“By not passing on the rate cut in full, it increased the margins out there in the market place, which allowed Australia’s non-bank and non-major lenders to re-establish themselves in the market place,” Mr Green said.
“Already at the coal face, we are seeing a lot more applications going to Australia’s non-major lenders because they are not only offering lower rates for borrowers, but higher commissions for brokers.
But it is not just Australia's non-majors and non-banks who are offering higher commissions. Just last week, Homeside revealed that there had been a surge in the number of brokers that are now receiving a 35 basis point trail commission.
Speaking to The Adviser earlier this month, NAB Broker's general manager distribution John Flavell said the lender's ramped trail program was now celebrating its fifth birthday, allowing some brokers to receive the top trail payment.
"When brokers look at their commission statements this month they will see that some of their customer relationships are now paying 35 basis points trail," he said.
"In our estimates, every day, 300 to 400 broker/customer relationships mature and go to the next level in terms of our ramped trail.
"It is a positive for brokers, their customers and Homeside as well."
