The big four banks have issued an apology to brokers after a “technical glitch” delayed commission payments to some aggregators.
Westpac Banking Corporation (Westpac) has confirmed that it suffered from a “Technical problem” last year, which resulted in delays in broker commission payments to a small proportion of its aggregator partners.
During the last quarter of calendar year 2021, Westpac advised affected aggregator partners that there would be a delay in paying fees for settled residential loans, including initial and trailing fees.
The problem is believed to have occurred twice between September and November 2021 for residential mortgages taken out with Westpac and its subsidiaries (St. George, Bank of Melbourne and BankSA).
It is estimated to have affected around 1% of aggregators, including the main aggregator Connective.
A Westpac spokesperson told The Adviser: “We are aware of a technical issue which has caused some recent commission payments to aggregators to be delayed, which we believe may have had a ripple effect. on some brokers.
“The issue has been fixed and all aggregators have since received their payments.
“We apologize for any inconvenience this may have caused.”
Due to the delay, many commissions were not paid to brokers by the relevant aggregators until late November/early December.
Several brokers had contacted The Adviser to report the issue and its impact on their cash flow.
Bryan Jovanovic, Director and Mortgage Broker of Your Mobile Broker, lamented the repeated technical issues and Westpac’s lack of transparency or explanation of what caused them, adding: “Most brokerages in Australia operate as SMEs that are highly dependent on a stable cash flow. to manage their operational and personal expenses.
“To impact that cash flow during such a fragile and unstable economic time without acknowledgment or apology [at the time] illustrates a lack of engagement and value recognition for the entire broker channel.
“The broker channel continues to adapt and adhere to growing industry and lender compliance requirements, while in turn eroding its own profitability.
“If the shoe was on the other foot, most lenders would apply penalties and/or impact credit scores when customers default on their financial obligations to them, but brokers are simply expected to accept such disregard blatant and repeated.”
Brokers have recently been hit by late commission payments from lenders and aggregators. Loan Market Group executive chairman Sam White this month apologized to brokers PLAN Australia and Choice Aggregation Services (Choice) affected by late commission payments over the holiday season.
As previously reported, a “significant number” of brokers grouped under PLAN Australia and Choice – now part of the Loan Market Group – have not been paid upfront and trailing commissions after a payout cycle has been missed on December 31 after a “perfect storm” of problems.
The group told brokers that all available staff were working on payment processing and had worked over the past weekend and the January 26 public holiday, to ensure all payments were up to date in February.
PLAN Australia and Choice Aggregation Services (Choice) will move to the Lending Market Group Revenue Management System in February 2022, which should alleviate much of the payment and applicant issues currently being felt.
[Related: ‘We deeply regret’ PLAN, Choice commission payment delays: Sam White]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian brokerage industry, the mortgage market, financial regulation, fintech and the wider lending landscape, Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser webcasts. Live.