2 Comments 2 Commentsby Eric Frykberg
The bank is moving its upfront commission from 0.45% to 0.55%, however its trail commission remains unchanged at 0.15%.
This move will be welcomed by the adviser community which is doing much less business now than previously, due to the property downturn.
Figures from the Real Estate Institute from November show there was a fall of 34.7% in the number of houses sold in a year and 4.3% in just one month.
Prices have fallen as well, and the two trends have combined to pull down adviser earnings.
But the Kiwibank move is not seen in the industry as a trend towards better payments to advisers overall, nor any sort of compensation for hard times.
Nor is it seen as any significant compensation for the fact that advisers are doing more work for banks, which in turn are closing down branches and saving on their fixed costs.
Instead, the change is regarded by industry professionals as a balancing act by Kiwibank. Its upfront commission was previously lower than that of the other four big banks. This latest rise will bring it closer to the commission paid by Westpac and BNZ.
Adjusting the levels to incorporate trail commission, which not all banks pay, the figures for all five main banks will move closer together as a result of this change.
In a statement, Kiwibank general manager of home lending, Nicole Pervan, said the bank was committed to partnering with the adviser community.
“We've built a strong team to support our partnerships and to deliver quality products for our customers.
“Our aim is to continue growing this channel ….. we have increased our upfront commission from 0.45% to 0.55% on borrowing transactions settled from and including December 5.”
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