Questions are swirling around the future for the Sovereign Home Loans business. As we report here Sovereign will remain part of ASB and its $7 billion home loan book hasn't been included in the sale to AIA.

While Sovereign essentially sells ASB home loans under the insurer’s brand there are two important points.

The first is that Sovereign made it clear that clients are owned by the mortgage adviser, thus removing potential channel conflict.

This issue has reared its head at ASB recently after it launched its online fixed rate rollover tool. Some advisers have been highly critical of the way this was rolled out and that it can end up pinching their clients.

In addition to this the sale removes the sole reason Sovereign wrote home loans through advisers. The service has always been about helping Sovereign sell more life insurance. Now it is selling its life insurance business, Sovereign, there business proposition behind Sovereign Home Loans disappears.

The biggest worry for mortgage advisers is that Sovereign paid trail commissions, rather than upfront like ASB. Removing any trail commissions would be a significant hit to those advisers who had been strong supporters of Sovereign Home Loans.

MORTGAGE ADVISER Conference update

If you have registered for next month's conference, expect to get an email with a further update soon. You can see the updated programme here.