Major tipped to reintroduce first-year trail

“I believe CBA will come out probably after the end of the financial year, and then that will put pressure on NAB Broker to review as then they would probably be the only major not offering trail in the first year,” she told The Adviser.

Ms Sale said the two majors wanted to boost their presence in the third-party channel now that brokers’ share of the mortgage market had reached 50 per cent and was set to keep increasing.

“The big factor I see here is the non-majors who have come back in the market – the likes of ING DIRECT, Citibank, Macquarie Bank – who are now keeping the majors on their toes and actually starting to get back some of the market share,” she said.

Commonwealth Bank confirmed last month that it would change its commission structure in the second half of this calendar year.

NAB offered this comment on its commission structure: “Our long-standing ramped trail structure is a fair and transparent trail commission structure that encourages brokers to develop trusted relationships," a spokesperson told The Adviser.

“We continually review our position and always look to be competitive for our brokers and their customers.”

Connective director Mark Haron said earlier this month that the aggregator had been holding discussions with two banks about reintroducing trail in the first year.

Finsure managing director John Kolenda told The Adviser that several lenders were probably contemplating improved commission structures.

“Clearly, competition for market share out of the vibrant and ever-growing broker channel will see reviews being undertaken by lenders, and market forces will see some of them make the necessary changes to compete more aggressively,” he said.

“The broker channel has proven over the years to be profitable distribution channel for lenders introducing many new customers to their brands, and we believe many smaller lenders will enter this market to access volumes otherwise not available to them.”

Meanwhile, Custom Equity Group managing director Sean O'Brien said although commissions were important, they could not be considered in isolation.

He said lenders also had to be judged on their technology platforms, the way they service brokers and the support they give to the third-party channel.

Mr O'Brien also raised the idea of lenders offering brokers a range of commission options.

“Having the opportunity to choose the commission structure that is right for the individual broker during the different life cycle of their business can only be beneficial as the broker can choose what is most important to them at that point in time,” he said.

[Related: Bank flags possible commission changes]