The AFR has an article on the remarkable resilience of trail commissions - you have to be a subscriber, but it tells an interesting tale of how trails were targeted by Hayne, and yet have escaped the ARC's recommendation to end them. Mortgage trails are both more prevalent in Australia, and where present, higher, than they are in New Zealand. Given the often transactional nature of mortgage broking, and the relatively short average term of the loan they are a puzzling feature. Hayne saw them only through the prism of customer service experience, no bad thing, and wrote that there should be a maximum upfront commission, and no trail, because of an absence of customer service after placement. So much for letting the market decide price. Yet banks have an interest in being referred quality borrowers, and as upfront costs are high, loans that stay on the books are preferable. Irrespective of any service to the customer, the ongoing trail neatly defines this incentive. While true that the customer receives no direct benefit, they do receive an indirect one: the lender with longer average loan duration enjoys lower costs, and presumable competes in the market with an advantage. As an aside, the article mentions the financial returns to be gained from accumulating trail commissions.