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By Tim Neary
November 29, 2011
While most of the industry giddily toasts the NAB on its decision to increase broker commissions, one industry leader has spoken out against the move - saying the real reason behind it is to manipulate the market for its own gain.
Speaking to the MortgageMix, the source, who did not wish to be named, said a more sinister motivation lay behind the move and the real reason the NAB has bumped up its commission payments is to drive margin back into its supporting channel businesses.
"It's just an odd coincidence that NAB owns 40% of the industry - and it initiates this 'bold' commission increase move," the source added.
"I suspect that the real motivation behind the move is to drive margin back into the NAB owned supporting channel companies," the source said.
Furthermore, the source accused the NAB of being duplicitous - making out it is supportive of the broker channel, when it fact it is "BS-ing" it.
The source said the acid test is how NAB has skirted around the issue of paying trail in year one: "It's all good and well that they make heroes of themselves in years four and five - when the loan is coming to an end anyway."
About whether other banks would follow suit, the source said the NAB would certainly hope they did.
"Then the loans written by other lenders would add to the increased margins."
The source added the move might suggest that the NAB is not performing as well as it would like the market to believe.
Yesterday NAB announced it would give all of its brokers a 65bp upfront commission, access to its online valuation service and 90% plus LVRs. This could mean an increase by as much as 15bps for some brokers.
NAB did not mention a review of its trail in year one policy.
Related Stories
NAB on the move for market share - After doing so last month, the NAB has achieved back to back growth in its mortgage market share.
Big bank break-up builds buzz for NAB - When NAB kicked off its 'break-up' campaign last Friday with a fake tweet about a relationship break-up, it spawned a raft of heated retorts, both from the market and the social and main media.
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