Don't expect higher commission rates

Everyone acknowledges mortgage advisers are having to do more administration work in running their business, but the chances of a pay rise appear pretty much non-existent.

The large majority of home loans written by mortgage advisers go to the big four banks, but two chief executives have ruled ruled out increasing commissions.

ANZ, Westpac and BNZ have each released their annual results recently. TMM asked ANZ and Westpac about increased commissions (BNZ refused to do an interview).

Westpac chief executive Catherine McGraith said: “If I'm entirely honest, I haven't thought about broker commissions on a go forward basis, so can't give you any insightful observation on that.”

When asked if she would consider it, she said: “I think it's like everything, so you'd need to look at the full financial case around it.”

ANZ chief executive Antonia Watson responded that as house prices increased so did adviser remuneration.

"There are two cohorts of job groups whose whose wages have gone up with house inflation rather than actual inflation, and they're mortgage brokers and real estate agents.

"So I think they've done pretty well over the last few years as the average mortgage size has increased. So they've probably had that compensation already."

When it was pointed out house prices are coming back and the amount of commission will decrease she responded: "I didn't hear that argument on the way up."

The good thing she says are that house prices are not predicted to come back to where they were two years ago or two and a half years ago pre-Covid. 

BNZ refused an interview with its results announcement.

TMM's view

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