What run-off costs
Run-off is the share of your book that leaves each year. At 20%, which is where a lot of unreviewed Australian books sit, a $48m book earning $72,000 of trail loses about $14,400 of that trail in the first year. The loans that left do not come back, so the loss compounds: over five years the cumulative trail forgone is around $166,000, roughly two years of income. Halving run-off to 10% keeps about $7,200 of trail a year, and because the retained loans keep paying, the gap widens every year.
$166,000
Trail lost over five years at 20% run-off on a $48m book
The same book at 10% run-off loses about $90,000 over the same period. The difference is the value of a review routine.
Run-off also moves the multiple a buyer will pay for the book. Under 10% and a book is worth a premium; over 20% and it is discounted. Every client kept is therefore counted twice, once as trail and once as valuation.
Try it: Trail run-off calculator
Run-off is the share of your book that leaves each year. Set yours and see what it takes out of your trail, compounding year on year.
The four warning signs
Almost every loan that leaves gives warning, and the warning is in data a broker already holds.
Fixed-rate expiry. The date is known from settlement. When the fixed period ends the loan rolls to a standard variable rate that is almost always higher than a new customer's, the lender writes to the client, and so does everyone else. If you are not in the conversation 60 to 90 days before that date, someone else will be.
Interest-only conversion. The same logic. Investors whose interest-only period is ending face a repayment jump of 30% to 50% and go looking for another interest-only term. The date is on the loan documents.
Rate drift. A loan settled two years ago is usually paying more than the same lender offers new customers today. The gap grows quietly until the client notices, usually because a competitor's advertising told them. Comparing each loan's rate to the lender's current pricing puts a number on the gap and a priority on the call.
The clawback window closing. Loans just past 24 months are the ones a competing broker can refinance without any clawback to you, and the ones most likely to be carrying a stale rate. They are also the ones you can reprice or refinance yourself without penalty.
A commission file gives you the lender, the settlement date and the balance for every loan. Your own records give the fixed and interest-only dates. Together they produce a list of who to call this month.
A weekly retention routine
The routine that halves run-off is not complicated. It is weekly, it is short, and it is driven by a list rather than by memory.
Monday: open the list of loans with a trigger date in the next 90 days. Fixed expiries, interest-only conversions and clawback-window exits. Send the first contact to anyone not yet contacted; a short email that names the date and offers a review is enough.
Midweek: work the rate-drift list. For every loan with a gap above your threshold, request a reprice from the lender's retention desk. Most respond within a few days; some need a competitor's rate quoted.
Friday: update the board. Each client sits in a stage: to contact, contacted, negotiating, confirmed. Anything that has sat in a stage for more than two weeks gets a follow-up. Confirmed reprices get a note to the client and a diary entry for next year.
Two to three hours a week is typical for a book of 200 loans once the lists are generated for you. The first month is heavier because the backlog of rate drift is large.
Repricing without the refinance
Repricing is the cheapest retention tool because nothing moves. The client keeps the loan, the lender keeps the customer, the broker keeps the trail, and no clawback is triggered. Every lender's retention desk has authority to discount for existing customers; almost none use it unprompted.
The request is simple: this client's rate, your new-customer rate for the same product, a competitor's rate, and a request to match. Get the offer in writing, put it to the client with the alternative, and record the recommendation. That record matters, because a review that ends in a recommendation is credit assistance and the best interests duty applies.
If the lender will not move and a refinance genuinely serves the client, do the refinance. Losing the trail on one loan to keep the client is better than losing the client; it is only the silent departures that cost you both.
Measuring whether it is working
Measure run-off by balance, monthly, from the commission file: trail-earning balance last month that is absent this month, divided by last month's balance, annualised. Track it as a rolling twelve-month figure so a single bad month does not distort it. Alongside it, count reviews completed, reprices confirmed, and the dollar value of trail on loans that passed a trigger date and stayed.
The number that matters most is the last one. It is the trail you would have lost, and after a year of the routine it should be larger than any single month of new upfront.