SBS changes commission structure
Volume-based commission will be replaced with higher flat commission as the bank moves away from the old model in light of regulatory scrutiny in Australia and New Zealand.
Changes to the commission structure include a move to 0.80% in upfront commission (from 0.70%) on loans with LVR of 85% or less. Loans with LVR of more than 85% will be paid at 0.75%, sources said.
According to marketing materials sent to advisers, commission will be capped at $15,000. Advisers say the bank previously had a $10,000 commission cap. The new cap excludes the bank’s Advance product, according to a marketing email sent on 23 October.
Shaun Drylie, CEO of SBS Bank, told TMM Online the changes were influenced by Australia's Sedgwick report, which criticised volume-based commission models and led to greater scrutiny on the relationship between banks and brokers in New Zealand.
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