BNZ’s parent, National Australia Bank, may be experimenting with BNZ in a way that it can’t afford to with its core Australian business, he suggests. If the experiment is successful enough, it may introduce the same policy in Australia.
Certainly, BNZ, who was only a small player in the broker market, claims it is gaining market share.
"I think brokers have stuck their heads in the sand over BNZ. Who knows if this isn’t a forerunner of what’s going to come? Just say ANZ or Westpac or HSBC bought National Bank. Why wouldn’t they consider doing the same thing?" he asks.
"The broking industry would be wise to not only look outside the box here, but to start acting outside the box, to start thinking about the industry two or three years from now, rather than what it is right now."
In the past, banks have been happy to deal with mortgage brokers because it was a cost-effective way of getting business. "I’m not sure that the cost-effectiveness is still there," Poulter says.
Poulter has the opportunity to look at the situation from both sides of the fence because his related firm, Pacific Home Loans, is also in the business of providing and managing mortgages.
That makes him wonder whether the days of the current commission structure are numbered.
"The cost of origination is getting greater. The margin in the product, particularly the fixed rate loan, is getting less and the cost of administration is getting greater," he says.
Brokers are wanting higher commission, yet the life of the loan is coming down, to as little as three and a half years in some instances.
"If you’re going to pay 0.65% up front plus 0.2% or 0.3% trail fees, you don’t have to be a Rhodes Scholar to think this isn’t very economic," Poulter says.
The trend in the US market has been a swing back to paying upfront fees only, and they may happen here.
"It’s a little black cloud on the horizon that’s quietly creeping towards us," Poulter says.
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