Kepa to bump up adviser fees

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Kepa is to double the amount it charges home loan advisers who do not place risk business through the group.

Wednesday, June 15th 2016, 6:00AM 2 Comments

by Susan Edmunds

In a message to advisers, Jeff Page said the group had reviewed its monthly subscription amounts that advisers are paying to administer the home loans aggregation business.

"We have decided that if a member of Kepa Home Loans is not placing their risk business and or risk referrals through Kepa either directly or via a Kepa Risk member, then the monthly subscription will increase to $800.00 per month, plus GST."

That is an increase from $400. Kepa is also reducing the discount it previously offered advice businesses with multiple members. It compares to $500 per adviser for NZFSG.

The change will take effect from August 1.

David Whyte, former chief executive of Ginger Group, said it made sense for dealer groups to charge for their services.

"The less dependent they are on overrides and the more fees they obtain from members based on the value provided, that's a positive move for them."

He said the group needed to be compensated for the administration services it offered members.

Advisers would decide whether the new fee was worthwhile, he said. "They are either going to see the value and continue to deal as they are or they are going to go the other way - time will tell. Some advisers might feel hard done by but it is a pretty competitive business. If it's not an earner for hem ad they lose it they haven't really lost anything."

Page said he had no comment.

Former TNP boss Darren Pratley, now director of The Home Loan Group, said it was important for mortgage brokers to find a solution that offered them the best support they could find.

"It is vitally important for the mortgage industry to keep adopting insurance as part of its service. Having a good insurance offering as part of what you offer is important from the perspective of supporting the idea that you always have to act in the best interest of their clients. Making sure mortgage brokers have a solution that fits their business is really important."

Tags: Kepa

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