Another blow to advisers over trail commissions

ASB is in discussions with mortgage adviser partners AIA NZ and NZHL about killing off its iGo Home Loan product in July next year. It is the bank’s only home loan offering advisers upfront commission and trail.

The bank describes the Go Home Loan as a legacy product that is specific to those channels. It is primarily accessed through AIA NZ and NZHL accredited advisers. NZHL is part of the Government-owned Kiwi Group Capital also the parent company of Kiwibank. It stands as a entity with its own independent board.

Lawyers on all sides are working through the implications for the partnerships. If ASB does scrap the product it means from July next year advisers will be able to offer only the bank’s products for new or restructured lending.

However, if a borrower has a Go Home Loan and is not making any changes, ASB will continue paying trail commission.

Advisers are not happy the bank admits, but ASB communications manager Kate Berich says generally they understand the reasons for the change.

ASB has had partnerships with AIA NZ and NZHL for 30 years and Berich says the bank wants them to continue.

In terms of customer impact, she says where the ASB can’t give them like-for-like products the numbers are low – about 200 customers would not be able to be serviced.

“Those numbers are minimal and it is probably the reason everyone’s comfortable in terms of putting a customer lens over the change.

“It is more about the advisers being unsettled because of the implications to trail commission.”

The bank says it is a bit nuanced but generally it is not a trail paying bank. Most advisers get 0.85% upfront commission, but for AIA NZ and NZHL legacy partnerships it has upfront commission plus trail.

Go Home Loans were originally offered by Sovereign Insurance and were folded into ASB’s business when the bank bought the company in 1998.

The bank was, in turn, acquired by Australia-owned Commonwealth Bank of Australia (CBA) in 2000 and Sovereign’s insurance business was then sold to AIA NZ in 2018.

ASB held onto the mortgage portfolio and Go Home Loans have been available as an internet-only brand, with AIA integrating insurance directly into the bank’s home lending.

The Go Home Loan features no monthly fees, a transactional account, and mortgage protection. Swapping this product for an ASB home loan will not get borrowers exactly the same deal, advisers say.

ASB says it is trying to ensure its customers have access to modern, future-focused technology.

The bank’s general manager wealth, insurance & partnerships Jax Mitchell says the discussions with AIA NZ and NZHL are part of its broader simplification programme of work happening across the bank designed to reduce system and operational complexity and respond more quickly to evolving customer needs.

“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,” she says.

Comments from our readers

On 18 December 2025 at 10:48 am valkyrie6 said:

BNZ! where are BNZ? BNZ have to stop trail commission now without a doubt, it's going to happen, any advisers sending deals to BNZ to get future trail long term clearly have their head firmly in the sand.

On 18 December 2025 at 3:12 pm Amused said:

With a much greater emphasis being placed now on competition in the banking sector “retention incentives” like trail commission paid by banks to mortgage advisers are about to go the way of the dodo. The regulators stance is that advisers are expected to ensure that a client’s lender is the best option for them for the duration of their home loan. This means a change in mindset for some advisers who have been content on keeping their clients at certain banks so that they receive a trail payment.

In Australia APRA has previously reviewed the existing barriers to customers seeking to switch lenders for a better deal on their home loan. It found that adviser clawbacks and trail payments by banks were a key reason for why an adviser could potentially discourage their client from switching. Here in New Zealand the Commerce Commission’s directive to banks regarding adviser clawbacks stated that the existing lengthy clawback periods are an anti-competitive practice that deters borrowers from refinancing, especially when customers switch lenders. Most main banks have now followed that directive. Likewise, we have now had Westpac & ASB (for the Go Home Loan product) decide to stop paying trail on new loans. It’s obvious that both BNZ & Kiwibank will also follow.

If trail payments by banks have been deemed to be a potential barrier to customers seeking a better deal on their home loan, then no lender in New Zealand will be grandfathering trail. It doesnt matter what agreements the head groups think they currently have with BNZ & Kiwibank & ASB (for the Go Home Loan product) these lenders now have the perfect excuse to wriggle out of honouring what they signed.

Another blow to advisers over trail commissions

Mortgage advisers have been given more bad news over trail commissions just before Christmas.

Thursday, December 18th 2025, 10:24AM 2 Comments

Comments from our readers

www.GoodReturns.co.nz