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Prominent industry figures are divided about whether NAB can expect increased volumes from its commission restructure and whether other lenders will follow suit.
NAB announced yesterday that it would reintroduce first-year trail from October 1 and also rebrand Homeside as NAB from August 18.
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Intelligent Finance managing director Justin Doobov said the bank’s decision to increase commissions sent a message that it was sincerely committed to the third-party channel.
Other lenders are likely to follow NAB’s lead, he added. “NAB has moved first, but I think in the next weeks or months, a couple of the others should announce their own offerings,” he said.
Mr Doobov also told The Adviser the rebrand would clear up the confusion that clients can feel about the relationship between NAB and Homeside.
Oxygen Home Loans general manager Alan Hemmings was sceptical about whether NAB’s commission increase would lead to increased volumes.
He said it merely “brings them back to where the rest of the market is” – and that brokers make decisions based on their clients’ interests anyway.
Ballast chief executive Frank Paratore said NAB’s commission boost would mean increased income for both brokers and aggregators.
Mr Paratore said it was a pleasing show of faith in the third-party channel, but that it would be unlikely to worry other lenders because they would be focused on their own strategies.
“I would suggest that a few of the others will be having a look at it, but I don’t think it will generate a commission war – although that would be nice,” he told The Adviser.
Mr Paratore also said that if other lenders do improve their commission structures, it would more likely be because of third-party growth and an improving economy.
Custom Equity Group managing director Sean O'Brien said NAB could expect to gain market share as long as it focused on offering an all-round package rather than trying to “buy business”.
“I think it will lead to an increase in volumes as long as the service proposition, the technology platforms and every other part of the support provided to the broker remains the same,” he said.
Mr O'Brien said NAB’s commission increase was a welcome show of faith in the third-party channel and a sign that the market was now returning to pre-GFC conditions.
[Related: Citibank flags possible commission changes]
