ASB has advised mortgage brokers that they would not be paid trail commission on new lending after next July. Photo: RNZ / Marika Khabazi
ASB has become the latest bank to trim its commission offer to mortgage advisers.
Glen McLeod, of Link Advisory, said it was disappointing the bank had advised mortgage brokers that they would not be paid trail commission on new lending after next July.
"Trail commission is vital because it funds ongoing advice for homeowners, support that helps Kiwis manage debt effectively and make informed decisions. Removing this remuneration risks reducing access to advice and pushes the industry toward a transactional model, which is not in the best interests of clients.
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"Lenders are asking advisers to continue providing ongoing service without remuneration, which undermines adviser sustainability and client support. We are advocating for solutions that maintain adviser viability and ensure Kiwis can access quality advice.
"While some suggest a fee-for-service model, we believe this would significantly reduce access to financial advice for many New Zealanders, worsening financial literacy and increasing vulnerability. As an industry, we must collectively promote accessible advice to help Kiwis understand their financial position and plan for long-term financial freedom."
The bank will no longer offer its AIA Go Home Loan product to new customers.
Earlier this year, Westpac said it would no longer offer trail commissions on new loans.
Jax Mitchell, ASB general manager of wealth, insurance and partnerships said the bank was in talks with AIA NZ and NZHL advice groups about changes to legacy home loan products offered by their advisers.
"This is part of our broader simplification programme of work happening across the bank designed to reduce system and operational complexity and respond more quickly to evolving customer needs. As part of these discussions, AIA NZ and NZHL are considering adopting our standard home loan offering for mortgage advisers as it makes sense for us to have a consistent adviser proposition. We're working closely with AIA NZ and NZHL and their mortgage advisers and will continue to do so during the transition."
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