The major bank says that it is committed to eliminating channel conflict and stands by its position on broker commissions.
NAB’s general manager of broker distribution, Steve Kane, told The Adviser that the group has managed to increase its share of broker-originated loans by 22 per cent over the year to 30 September. The positive result follows a busy year for the bank, which saw the rollout of a broker-integrated branch strategy and a return to the Red Star brand.
“We have had a very good year,” Mr Kane said. “We consolidated the changeover from NAB Broker to Red Star. All customers who were previously going by the HomeSide brand or NAB Broker are now fully fledged NAB customers, with all the NAB products and services available [to them].”
Education initiatives, such as the Knowledge is Everything roadshow and NAB’s principal partnership of The Adviser’s award-winning Better Business Summit, have driven third-party engagement for the group.
“We will be working closely with the broker channel in FY18 on a customer management strategy, fully recognising the contribution the broker makes and their relationship with the customer,” Mr Kane said.
Over the last 12 months, NAB has been rolling out its Customer Adviser Broker Program, which has seen dedicated bankers placed in more than 20 branches with the primary purpose of onboarding broker customers.
Mr Kane said that the strategy has been “a roaring success” and helped combat channel conflict.
“We are now looking at how we can expand that, how we resource it and gathering feedback from brokers.”
In addition to streamlining the customer onboarding process, the strategy involves educating branches about the importance of the third-party channel to the NAB Group and forging relationships between branches and brokers. In terms of the mortgage market, it is down on last year.
Touching on the ASIC remuneration review, Mr Kane explained that the onus is on lenders and aggregators to “step up” and provide more data and build stronger relationships with mortgage professionals.
“Everyone has been focused on the ASIC review,” the general manager said. “The premise right at the beginning has been on the value brokers contribute. Our position is stated and we haven’t changed: we believe upfront and trail are the right thing.”
Mr Kane explained that, in addition to recommendations around how brokers should be paid, ASIC’s review recommended that lenders provide more detail to aggregators, and that aggregators “step up and really have a focus on how they really have a relationship with their brokers beyond providing software and lender accreditation”.
NAB’s full-year results, released Thursday (2 November), show that the group recruited an additional 338 brokers across aggregators PLAN, Choice and FAST for the 12 months ended 30 September 2017.
There are now 4,637 brokers operating under NAB-owned aggregators, up by 33 per cent since 2014.
Mortgage volumes through the third-party channel hit $98.5 billion over the year to 30 September, up by 12 per cent on the $88.2 billion recorded in 2016.
NAB delivered a $5.3 billion statutory net profit for the year and cash earnings were up by 2.5 per cent to $6.6 billion.
[Related: NAB recruits 338 brokers in 12 months]
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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