A non-bank finance group is encouraging brokers to look at alternative revenue streams following the announced changes to trail commission.
Principal at Chifley Securities, Dominic Lambrinos, said he believes there will be stronger demand for non-bank lenders after the release of the Hayne Royal Commission report. He said mortgage brokers should now be seeking revenue streams from commercial finance now that trail commission will be removed.
“Trail commissions appear to be on death row and brokers should be turning their attention to providing privately-backed loans to investors and developers, asset and cashflow finance through non-bank channels,” he added.
“There is no doubt credit is being squeezed in the residential property market and brokers face a tough road ahead in this sector, but they can broaden their activities after short and intensive training programs provided by Chifley and the FBAA.”
The group said that lending in the non-bank sector is estimated to be worth more than $50billion and volumes appear to be “resilient”, unlike the lower levels and pricing in the residential market.
Lambrinos said, “The commercial and industrial property sectors continue to perform well, with industrial units continuing to attract strong pre-sales and development.
“Meanwhile we are and will continue to see more residential developers coming to Chifley and our competitors as their pre-sales dry up, amid the realisation that many have paid comparatively high prices for their land.”
