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A lender has announced changes to its broker remuneration model.
Teachers Mutual Bank Ltd (TMBL) – which includes Firefighters Mutual Bank, Health Professionals Bank and UniBank – has announced that it has revised its existing upfront commission model in a bid to “provide a better deal for brokers”.
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TMBL said it would introduce a new deferred payment that will be calculated by reviewing the loan account balance at the end of the month following the 12-month anniversary of settlement.
The lender revealed it would now pay a top-up commission on the difference between the current loan account balance (net of offset) and the loan account balance used in the initial upfront calculation of the loan.
The top-up payment would only be made if the difference is greater than or equal to $20,000.
The change will take effect from 1 January 2020, with the deferred payments to be backdated for January and February.
TMBL noted that its initial upfront commission payment would remain unchanged.
Following the announcement, TMBL’s head of third-party distribution, Mark Middleton, said the new policy would better align with the needs of both customers and their broker representatives.
“We want to support our broker partners in these challenging times. We have listened to their feedback and implemented a change that we think will best serve our members and our brokers,” he said.
“This update to our upfront commission model has been made to ensure that customers obtain loans that are appropriate to their specific needs, whilst also providing brokers with recognition of an increase in the initial funds at the 12-month anniversary date.”
Gateway Bank confirms trail stance for COVID-19 loans
As well as the TMBL announcement, it was also revealed today that Gateway Bank would continue to pay trail on loans that opt for a loan repayment holiday under its COVID-19 package.
“We want to assure brokers that we will continue to pay trail commissions for loans that are under a repayment deferral. Gateway Bank is committed to supporting our members and the broker community as we navigate these difficult times together.”
[Related: TMB lowers serviceability, fixed rates]
