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ASB and Sovereign increase upfront commissions

ASB and Sovereign have, from today, increased the amount of upfront commission they will pay to mortgage advisers.

Friday, May 1st 2015, 6:00AM

Ian Boyce says that the current commission structures were complex and these changes are about simplifying how they pay mortgage advisers. It is withdrawing its current commission options and LVR bonus and replacing them with "one simple commission structure; payable to all advisers for new home lending settlements to ASB at 0.85%."

"This change removes all current individual threshold gates, regional location bonuses and the current LVR bonus of 0.15% and therefore, the complexity involved in the current commission options."

The changes bring ASB into line with ANZ, although some advisers can be paid up to 0.95% at ANZ however very few achieve this as the thresholds to qualify are high.

The increase in payment rates also takes the market back to where it was in 2005 before the banks all slashed commission payments arguing they were unsustainable. 

Boyce says ASB has no intention of introducing trail commission like Westpac, BNZ and SBS.  "At this stage we are sticking with upfront."

"It's not our intention to do trail," he said. If advisers want trail then they can use the Sovereign product.

"We do trails through our Sovereign brand."

Under the new structure advisers using Sovereign who select its trail commission offer, will now be paid 0.60% upfront commission, and trail of 0.20% (previously this was 0.45% upfront and 0.20% trail). For advisers who select the upfront-only commission, this has been permanently increased from 0.65% to 0.85%.

Boyce said the market is competitive at the moment and ASB is doing what it has to to generate lending volumes.

It's move is really to match ANZ as mortgage advisers are tending to use a combination of ANZ and Westpac products so they get good cashflow through ANZ's upfronts, and build business value with Westpac's trail commission model.

TMM understands ANZ has had record levels of volumes through its broker unit recently.

ASB has also changed its clawback structure which effectively sees the clawback period being extended from 24 months to 27 months.

"This change to the claw back structure recognises the importance of retention of the home lending portfolio at ASB," the bank says in a letter to advisers.

Tags: ANZ ASB Commission Mortgage Advisers

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 ▲2.99 ▲3.45 ▲3.69
ANZ 4.59 3.39 3.85 4.09
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.79 3.25 3.49
ASB Back My Build ▲2.04 - - -
ASB Bank 4.45 ▲2.99 ▲3.45 ▲3.69
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - ▲2.99 ▲3.45 ▲3.69
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.70 ▲3.59 ▲4.05 ▲4.29
BNZ - TotalMoney 4.70 - - -
CFML Loans ▲5.15 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.45 2.85 3.15
Kainga Ora 4.43 2.88 3.28 3.59
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.80 4.00 4.34
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.95 3.15 3.49
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 3.05 3.45 3.75
SBS Bank Special - 2.55 2.95 3.25
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.65 - -
The Co-operative Bank - Owner Occ ▲4.55 2.79 3.25 3.49
The Co-operative Bank - Standard ▲4.55 3.59 4.05 4.29
TSB Bank 5.34 3.35 3.75 4.05
TSB Special 4.54 2.55 2.95 3.25
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.84 3.45 3.85 4.09
Westpac - Offset 4.84 - - -
Westpac Special - 2.85 3.25 3.49
Median 4.57 2.99 3.45 3.49

Last updated: 15 October 2021 8:56am

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