Commission restructure set to worry brokers

National Australia Bank and St George Bank have both changed their commission arrangements with mortgage brokers in an effort to encourage more high margin business. St George's new model means that it will be able to claw back all of the commission paid for a loan that does not last 12 months and half the commission for up to 18 months. A St George spokesman said that the move was driven by the continued high cost of funding and brings the bank into line with rivals such as ANZ and Westpac. NAB's changes pay more commission the longer the loan exists and says that it wanted to reward brokers for servicing the long term needs of their customers. “We see the market moving from focusing on a product transaction to servicing client needs over time,” a spokeswoman said. “Brokers need to consider providing a range of products to meet those needs.”

Source: The Australian