Brokers to become wider financial advisers for NAB

by InsideFinance 27/04/2008

As major banks move to cut upfront mortgage broker commissions from 70 basis points to 50 basis points and trailing commissions from 25 basis points to 15 basis points, National Australia Bank has taken a unique approach which will see brokers become wider financial advisors and rewarded for cross-selling other NAB products such as insurance.

 

"We're talking about stuff which is pretty hard to talk about," said Matt Lawler, regional general manager of the bank's NAB Broker arm.

In most cases, the process would involve brokers obtaining an advisory licence. "Getting licensed and skilled-up is part of of the next era," he said. "A broker has a role to play in terms of (clients') cash flow and budgeting."

Mr Lawler said the bank did not plan to touch its "headline" commission rates, typically a 65 basis point up-front payment and a 25-35 basis point trail. "We're more in the space of reshaping remuneration, rather than just cutting," he said.

 

The only listed mortgage broker, Mortgage Choice, has suffered a fall in its share price since Westpac announced its commission cuts, and has while other major banks review their own commission structures, Mortgage Choice is expecting a better outcome than that delivered by Westpac


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source: The Australian
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