Adelaide Bank cuts commissions

Adelaide Bank is the latest lender to cut broker commissions, announcing yesterday that a new commission structure will take effect on September 1.

The bank is offering brokers a choice of 50 basis points up front and a 15 point trail, or no upfront and a 30 point trail.

In a statement issued by the bank, chief general manager of wholesale mortgages Tim Piper said: "The very strong message from broker groups was that they understood the need for changes to commissions but were concerned about the degree of complexity and uncertainty that appears to be entering the process."

In most cases banks have cut the upfront commission from 70 or 75 basis points to 50 points and trails have come down from 25 points to 20 or 15.

Some of the new arrangements involve incentive payments that have made commission structures more complex.

In the case of the CBA, brokers may earn up to another 15 basis points, with five points paid where brokers lodge 90 per cent or more of submissions online, five points where loan applications meet a quality target (that is, with no rework) and a further five points where settlements exceed 80 per cent of the value of loan applications lodged.

Other changes have been more straightforward. Westpac cut its upfront broker commission from 70 to 50 basis points and its trail from 25 to 15. St George is offering commissions in a range between 50 and 70 basis points.