June 24, 2014
Mortgage Choice chief executive Michael Russell has applauded one lender's decision to reintroduce first year trail.
Earlier today, National Australia Bank announced its plans to pay mortgage brokers 0.15 per cent trail in the first year on all new home loans settled from 1 October 2014.
Mr Russell said the decision, which will no doubt come as a welcome surprise to mortgage brokers, should highlight the pivotal role that the third party distribution channel plays in the mortgage market.
“This decision emphasizes just how important the third party distribution channel is to the banks and their businesses. Today, mortgage brokers account for 50 per cent of all home loans written and there is nothing to suggest that this percentage won't climb higher over the coming years,” he said.
“The introduction of first year trail will also offer brokers a much needed lift in revenue that they can use to reinvest in their business to further enhance their customer service proposition.”
Mr Russell said he doesn't expect NAB will be the first and only lender to make changes to their commission structure over the coming months.
“We have been working with a number of lenders to enhance and tweak their commission structure in a bid to support the growth and evolution of the channel, and it is great that we are finally starting to see dividends from these conversations.
“I think there are a lot more positive commission movements to come in the weeks and months ahead, so I guess it is just a case of ‘watch this space'.”