Fate of commissions in brokers' hands

In an exclusive interview with MPA, ING Direct's executive director of intermediary mortgages hinted brokers' commissions could be further reduced.

"If brokers continue to support two or three major Australian banks with 90% of their business something will happen again. So it's really in brokers hands to change the dynamics. Otherwise something will change and it won't be in their favour," said Brett Morgan.

Being a branchless bank, ING Direct relies heavily on the broker channel to support its mortgage business. The bank has consistently rated highly with brokers in MPA's annual survey on banks - ranking first place in the 2008 survey over the four major banks and a handful or regional lenders.

ING Direct announced changes to its commission structure in July.

Commencing 1 January, upfront commissions will be set at 50 basis points. The upfronts can be increased to 65 basis points if key performance metrics are achieved. In order to receive full commissions, brokers must submit loans through an aggregator that does more than $200m in business with the lender and has a 70% application to settlement conversion rate.

Changes to the trail structure came into effect 1 October. Brokers now receive a 15 basis point trail for the first three years with a 20 basis point trail from year four onwards.