PHOTO: Mortgage brokers are voicing strong concerns after ASB confirmed it will stop paying trail commission on new home loans
Industry warns move could reduce access to advice for Kiwi homeowners and push lending into a “transaction-only” model
Mortgage brokers are voicing strong concerns after ASB confirmed it will stop paying trail commission on new home loans from July next year, making it the latest major bank to wind back adviser remuneration.
The decision follows similar moves by other lenders and has reignited debate about the future of mortgage advice in New Zealand — particularly whether everyday Kiwis will still be able to access ongoing, independent guidance.
❌ What’s Changing at ASB
ASB has advised mortgage advisers that:
Trail commission will no longer be paid on new lending from July 2026
Existing trail arrangements will remain in place
The AIA Go Home Loan product will no longer be available to new customers
Trail commission is typically paid annually for as long as a loan remains in place and is designed to fund ongoing advice, reviews, and client support.
🧑💼 Brokers Say Advice Is Being Undermined
Glen McLeod, director at Link Advisory, says the move is deeply disappointing and risks long-term harm to consumers.
“Trail commission is vital because it funds ongoing advice for homeowners — support that helps Kiwis manage debt effectively and make informed decisions.”
He says banks are increasingly expecting advisers to provide ongoing service without ongoing remuneration, which he believes is unsustainable.
“This undermines adviser viability and ultimately reduces client support. It pushes the industry toward a transactional model, which is not in the best interests of borrowers.”
⚠️ Fears of Reduced Access to Advice
While some have suggested a shift to a fee-for-service model, McLeod warns this could exclude many households.
“Charging upfront fees would significantly reduce access to financial advice, particularly for first-home buyers and lower-income families.”
He argues this could worsen financial literacy outcomes and leave borrowers more exposed during interest-rate cycles.
“As an industry, we need to protect access to quality advice so Kiwis can plan for long-term financial freedom.”
🏦 ASB: ‘Part of a Broader Simplification Programme’
ASB general manager of wealth, insurance and partnerships Jax Mitchell says the move is part of a wider simplification strategy across the bank.
ASB is currently working with AIA NZ and NZHL advice groups to transition away from legacy products toward a more standardised home-loan offering.
“This is about reducing system and operational complexity and responding more quickly to evolving customer needs.”
Mitchell says ASB will continue working closely with adviser groups during the transition.
🔁 Not the First — And Likely Not the Last
Earlier this year, Westpac also confirmed it would stop paying trail commission on new loans, signalling a clear trend among major lenders.
Industry observers say more banks may follow — raising questions about how mortgage advice will be delivered in future and who ultimately pays for it.
🏁 The Bigger Picture
With interest rates still elevated, household budgets under pressure, and lending decisions becoming more complex, brokers argue ongoing advice has never been more important.
The concern now is whether removing trail commissions saves banks money — but costs borrowers access to guidance when they need it most.