CBA moves away from conflicted volume-based service model

CBA has announced changes to its volume-based ‘diamond, gold, silver and bronze’ service model for brokers following advice from the Combined Industry Forum and intense questioning at the royal commission.

During the royal commission hearing on 15 March, Daniel Huggins, CBA’s executive general manager home buying, acknowledged that the bank decided to change the volume-based structure after acknowledging that it could create conflicts of interest with diamond brokers being awarded faster turnaround times and better service.

In a note to MPA on Wednesday, Huggins explained that the new two-tiered system is part of the bank’s “ongoing commitment to support and recognise brokers who are consistently delivering good customer outcomes”.

CBA’s previous model had 11 segments with the top being diamond. Those brokers who qualified had to write at least $15m and/or settle at least 75 CBA loans per year and achieve three out of five quality metrics.

Under the new regime, there will only be two categories: essential and elite.

The model moves away from volume-based requirements, as recommended by the Combined Industry Forum. Instead, a broker’s performance will be assessed on five key quality metrics and five complementary metrics. Their performance will be evaluated on a quarterly basis.

This should help even the playing field for regional brokers who generally have smaller average loan sizes and wouldn’t have made the top tier under CBA’s previous structure.

“We are really pleased to announce a simplified tiered service model with a focus on quality that seeks to recognise and reward our accredited brokers who deliver strong customer outcomes,” Huggins said.

CBA and accreditation

CBA also recently announced that instead of de-accrediting brokers who hadn’t written a loan with the major in 12 months, it would just require them to complete an e-learning training module to ensure they are updated on current products and criteria.

The bank said it will no longer require brokers to write a minimum number of loans to retain accreditation.

In the past, brokers who wanted to maintain CBA accreditation had to submit a minimum of four home loan applications and settle at least three every six months, although according to CBA this was not systematically enforced.

The royal commission revealed that in 2017 CBA revoked the accreditation of 710 brokers due to inactivity.

 

Related stories:
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“I know I haven’t been popular”: CBA broker head

 

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