Breaking news: Scotia cuts compensation

Breaking news: Scotia cuts compensation

Breaking news: Scotia cuts compensation

Brokers feared this day would come, with Scotia introducing a 5 bps cut to compensation on all its five-year fixed and variable product effective Oct. 18 and following on the heels of First National’s move.

“First Nat had already set the precedent and they obviously felt they could afford to follow suit," said Geoff Willis, a top broker-partner with Scotia and managing partner with Dominion Lending Centres Origin Mortgages. "It’s something they knew that they could effect quickly, I think."

The news formally reached brokers on Wednesday, although Willis and other top performers were given the heads-up.

The cut drops compensation on the five-year fixed and variable mortgages to 75 bps from 80 bps for both owner-occupied and rental program deals.

It's a change that MortgageBrokerNews.ca forecast last week in pointing to broker speculation about major lenders and their willingness to follow behind First National.

The Scotia move comes as many brokers openly express doubts about Scotia's dedication to the channel and its decision to acquire ING.

Scotia is likely to experience some pushback from brokers because of the decision, said Willis, but that will likely be limited to the short-term.

 

19 Comments
  • Joe the broker 2012-10-18 8:21:36 AM
    Great. So with slowing originations , tighter rules, more declines and basically a whole mortgage business slowing down, we get paid less.
    Post a reply
  • JM 2012-10-18 11:15:47 AM
    You got to love it. We are the lender,you take what we offer now, end of conversation. We don't care in the slightest all the great work and the enormous amount of good business you all as brokers and agents have done for us in the past.
    Here is your reward, let's pay them even less.
    The only way for anyone with any self respect is to return the option. That would be to go with the lender who still appreciates the hard work that the mortgage broker or mortgage agent still does. There is still a few out there. This is an option and arguably the answer, certainly to be considered favorably.
    Post a reply
  • Peter 2012-10-18 1:38:48 PM
    Banks who don't appreciate broker business with lose out in long run. As with an business partners r needed and without them profitability suffers. Good luck Scotia if we sent you any more business and FN too. hahaha.
    Post a reply