A top young broker believes the industry’s commission model “deters” full-time brokers, while an elite business writer says mortgage broking is a “real career” that should come with a salary.
Peasy’s Joel Wyld, who finished 11th in The Adviser’s Young Broker of the Year rankings for 2015, believes the common commission-only model “deters” industry entrants to work full-time as brokers. He says the industry typically attracts people who have already worked in a bank or a similar industry for a long period of time.
“There is also the case where many finance professionals [such as accountants and financial planners] see an opportunity to add a second income stream to their business, whilst still not wanting to give up their primary profession,” he said.
Mr Wyld said these trends make it difficult for industry bodies and aggregators to engage properly with part-time brokers, which could potentially change customer attitudes about the value of the third-party channel.
“[Part-time brokers] perhaps wouldn’t take the industry seriously or spend enough time engaging in professional development, which limits their experience and can impact the advice given to the end customer,” he told The Adviser.
Mr Wyld said that while lenders, aggregators and industry associations can help by increasing awareness, there needs to be some onus on brokerages to attract more full-time brokers to the industry.
“If a brokerage can offer enough of an incentive like a good wage structure and benefits, then they should attract the right people,” he said.
“It is very difficult for people to go ‘commission only’ in an industry where it takes a long time to find a customer, and then another few months to get settled and paid. And then there are clawbacks.”
One brokerage that is doing its part to attract and retain the right talent through incentives is Sydney’s N1 Finance, which advocates a PAYG salary model, according to its CEO Ren Wong, who finished 26th in The Adviser’s Elite Business Writers rankings for 2015.
“Mortgage broking is a real career, and a real career should come with a salary,” Mr Wong said.
“A broker’s job is not sales-focused; it should be service-focused.”
Mr Wong said a lot of people question the level of motivation salaried brokers have to generate sales and find new business, but he believes loan writers should move away from the salesperson image and consider themselves as financial educators instead.
[Related: Spotlight on commissions intensifies]