KiwiSaver an option for mortgage advisers seeking ongoing income, provider says
Koura founder Rupert Carlyon said, with only Kiwibank and BNZ left paying trail commission, mortgage advisers had lost a key income stream.
Westpac paid advisers a total estimated at about $120 million this week as it brought its trail commission model to an end.
“Mortgage advisers have gone from a world where they could previously build good long-term businesses with good recurring income, which means they can hire staff, invest in systems… to now being businesses that rely on doing a deal to get paid… what’s happening now is mortgage advisers are looking for other sources of income.”
He said they not only needed the cash flow but to improve the value of their businesses.
“Historically businesses have been valued on a multiple of trail income. Given that trail has disappeared, it is unclear what you are buying when you buy a mortgage book and therefore what you should pay for it.”
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