Sovereign began reviewing its commission rates in September, intending to implement changes from 1 November. It postponed reductions after consultations with brokers, although it cut discounts on some loan products from the beginning of October. The lender has now announced that from 1 December, advisers who do not currently receive trail commission will see upfront payments reduced from 0.75% to 0.65%. Advisers who receive a mixture of up-front and trail commissions can choose between two options; 0.45% up-front and 0.20% trail or 0.5% up-front and 0.15% trail. Those who do not notify the lender of a preference under the combined option by 20 November will be paid at the 'default' rate of 0.45% up-front and 0.20% trail.

The changes will apply to loans advanced from 1 December, not only to business received from 1 December which means that loans in the pipeline settling from 1 December will be paid at the new rates.

Sovereign said that changes to its product pricing implemented in October had had a positive impact on its bottom line but not enough for it to avoid changes to remuneration. The company said that the changes were equivalent to as little as 6.5% over five years on the default combination option.

Another non-bank lender, Bluestone, has changed its commission structure, cutting upfront payments but increasing trail commissions or, in some cases, introducing these for the first time. Bluestone said that it believed trail payments would support brokers long term and to build lasting relationships with clients.

Under the new arrangements brokers will receive combination, up-front and trail packages on all products except equity release where and upfront-only option is still available.