Mortgage News
Paymentshield slashes broker commission by 22.5%
Paymentshield has informed brokers that their commission will be cut from 27.5% to 5% on 1 November if they have not written any business with the provider over the last 12 months.
In a letter to brokers, Paymentshield said that advisers’ commission will only revert back to 27.5% if they complete one policy per month for six consecutive months.
A spokesman for Paymentshield said: “In line with the dormancy clause clearly stated in our terms and conditions, we can confirm that a number of brokers who are no longer active with Paymentshield have been notified of a change to their commission.
“However, should these intermediaries demonstrate a return to active submissions then their commission will return to its previous rate.”
In the contract between Paymentshield and its clients, it states in the terms and conditions that Paymentshield automatically reserves the right to reduce commission to brokers.
A broker who contacted Mortgage Solutions said: “This is typical Paymentshield. In the past it has done something similar, where if you are not registered with the FSA, it will not pay you commission.
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“This is just the latest in a long line of commission-reducing measures from Paymentshield. I am thoroughly disgusted by it.”