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Salaries for new brokers just the beginning

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Australian Broker | 22 Jul 2013, 08:00 AM Agree 0
Paying new brokers a temporary salary may work in some cases - but it fails to address the root cause of why the industry lacks young blood, according to Choice CEO Stephen Moore
  • PeterT | 22 Jul 2013, 10:05 AM Agree 0
    Why the focus on a younger generation of brokers, presumably 20 year olds at the start of their career? Most established brokers came for some sort of background where they'd already had a career and had established their finances putting them into a position where they could survive the start up phase. Many of todays successful brokers started broking part time with other employment to make ends meet. Lots were the recipient of a redundancy which gave them a financial buffer.
    It also begs the question, do we really want someone with little life or debt experience, advising people on how to manage a home loan and household and even investment finances?
    Certainly there's some great 'young guns' out there, but life experience outside being a good sales person should count for something and be considered valuable.
  • SIDBROKER | 22 Jul 2013, 10:07 AM Agree 0
    Stephen, How about Choice pays the salaries!Now what do you think?
  • melbourne planner | 22 Jul 2013, 10:39 AM Agree 0
    What is the common opinion on what a starting/base salary should be? i run a large financial planning practice and have had minimal success in discussion with mortgage brokers so far? Either expectations are far too high and they automatically seem to want instant equity in my business? Maybe i am approaching this the wrong way?
    Please advise?
  • Marty | 22 Jul 2013, 10:40 AM Agree 0
    There needs to be a balance...we always explain that any entrant to our industry needs to be able to cover their living costs for a period of 6 months and have 5 years banking experience. This industry is not built solely on book smarts (costing new entrants further up front costs placing more financial pressure) and alot of training I have seen is logical (not to say it's not required) but not practical given what the industry requires to be a successful business owner and mortgage broker. If you are keen to enter the industry make sure you have strong source of funding behind you for 6 months and buddy up with proven performers. You are better to pay a proven performer a healthy split until you find your feet. Better than paying $10k - 15K on purely book training where the drop out rate is considerable....their is a balance but we have to take considerable care of new entrants not just sell the dream that can very quickly turn into a nightmare:)
  • John from Geelong | 22 Jul 2013, 10:52 AM Agree 0
    Melbourne Planner

    I think $400-$500 per week. Enough to pay for fuel and phone but not so much that motivation is eaten away by easy money.
  • Jeff | 22 Jul 2013, 10:59 AM Agree 0
    The problem is unsolvable. Banks pay based on existing Brokers being able to subsidize themselves with existing trail. If you don't have any existing trail, then the current commission structures are unviable. Cost of living has skyrocketed, yet we are paid up to 40% less than 2006 commission rates - in particular trail, which is what a new entrant needs to build quickly in order to survive.
    Especially when NCCP has effectively eliminated much of the existing loan market (eg most low docs).
    The cake is smaller, and the pay rates have diminished; yet we are discussing how to get more people attracted to our industry?
  • Trent Lee - bSmart | 22 Jul 2013, 11:12 AM Agree 0
    Hi melbourne planner,

    You may find more success with a referral relationship to a Pro Consumer and CashBack broker such as bSmart Mortgage Brokers.

    This will also secure your FOFA requirements and relieve you of the issues to which you refer,

    If you are a Lionsgate planner bSmart is already working with Lionsgate planners.

    Trent Lee
  • Papery | 22 Jul 2013, 11:26 AM Agree 0
    I think the article fails to address the issue that it can be MANY, MANY MONTHS before you see your first upfront commission split, & perhaps another 12mnths before your trails have any real value & lets not forget the clawback threats. Ongoing costs are not cheap. And lets not forget that the younger generation generally want the big payday now. Its no wonder there is disconnect between what an employer thinks a Broker is worth & what we think we are worth as a Broker, & the additional requirements of NCCP haven't helped.
  • JennG | 22 Jul 2013, 11:28 AM Agree 0
    I am a payg broker and have been for over 4 years. I am 50 years old and started broking in 2004. I had been working as a bookkeeper for most of my working life and actually started as a bookkeeper at a Mortgage Choice Franchise then the franchisee offered me the opportunity to become a broker. Yes I was a self employed broker up until 2009 when GFC struck and got head hunted by an accounting and financial planning business I negociated an attractive package. I have an annual budget I am expected to meet. I dont want to set the world on fire as a broker and that suits me just fine. What's the old saying you pay peanuts you get monkeys!
  • Ray-Perth | 22 Jul 2013, 11:29 AM Agree 0
    This is all a storm in a tea cup. A GENUINE new broker will be proactive enough to get a part time job like the rest of us have and keep themselves afloat. This builds character. No way while the sun shines would I ever pay any salary and have a new broker putting all his pressure on me.
  • NoTimeLikeTheFuture | 22 Jul 2013, 12:07 PM Agree 0
    Sadly this is a tough business to enter.

    Best way is to be the son or daughter of a well established broker.

    Otherwise consider driving a taxi or pouring beers at night. Seriously.
  • Peter Cleary | 22 Jul 2013, 05:44 PM Agree 0
    Papery comments are very realistic, no doubt Mr Moore is used to feeding off his nice fat cheque each month provided by his hard working troops!
  • CharlieX | 02 Feb 2015, 10:56 PM Agree 0
    I am looking to be a new entrant to the mortgage brokering industry this 2015 year, and the thought of just being on commissions is scary. As an engineer for about two decades, I have been earning about $120k annual salary, so it is scary to be career changing but I know that I got the skills and talents to do better in the financial service industry such as mortgage brokering; within ten years in mortgage brokering, I believe I can surpass my engineering salary. If there is any mortgage brokerage out there that will put me on a base salary initially until I can find my way around the mortgage brokering industry, please let me know. My education included a Bachelor's in engineering and MBA in management. I think my skills will be transferrable to the mortgage brokering industry, and valuable to the mortgage brokerage that takes me on board. My passion to be in the mortgage brokering industry is to help provide financial solutions to people's financial problems. I hope to hear from any brokerage that will take me on board. Thank you for reading my post :)
  • Michael Kent | 03 Feb 2015, 08:32 AM Agree 0
    Charlie there are plenty of companies out there who will put you on a base salary.

    They will all require you to already have the minimum Cert 4 in Finance though. The MFAA will require you to have your diploma which is costly and time consuming.

    The FBAA will only require a Cert 4 in Finance and you have to be a member of either of those bodies.

    Your battle will be finding a company willing to give you a go without experience and qualification or any accreditations with the lenders.

    Once you have all that and you start writing deals you should be making over $120k a year sooner than 10 years!

    I wish you well, it's a great career and can be rewarding. What state are you in?
  • Alex Stephen | 03 Feb 2015, 09:10 AM Agree 0
    Funny about old threads being resurrected! Timely though. I would be willing to discuss options for educated, well spoken and presented, intelligent, emotionally mature life experienced people, who understand borrowing and investing, with a flair for sales and a genuine desire to help their clients into better positions. But I'm not going to pay $120kpa for someone to learn the business.
    However, no brokers that work in my business earn only $120k, so you're setting your sights a bit low.
    If you're interested, and in Sydney, you should be able to find me on linked in.
    Alex Stephen
  • John from Geelong | 03 Feb 2015, 09:12 AM Agree 0

    I wouldn't employ anyone who wants to go 'mortgage brokering'.
  • Incognito | 03 Feb 2015, 11:49 AM Agree 0
    You won't need your scientific calculator CharlieX.

    Just a big basic calculator with big buttons. You won't even need square root.

    Instead you'll need great product knowledge and for people to like and trust you.

    And the 10,000 hour seemed to apply. I got really good after 5 years.
  • CharlieX | 03 Feb 2015, 10:09 PM Agree 0
    let's hope I won't feel like always in a pressure cooker as a mortgage broker. product knowledge, I will have to learn. I work very well with most people. the 10k hours rule works in every thing you do, unless you are sleeping/dreaming the whole time while doing.

    the English language is limited. but if you keep "breaking" people's mortgages, you would always keep your job as a mortgage broker and become extremely wealthy?

    I'm in Melbourne, do you have a branch here? I want to exceed my engineering salary, else why switch career. I'm sure that if I'm in your firm, your cut on my loans would be more than sufficient to cover the salary you put me on. let's say if the value of my engineering portfolio was my book of loans, then on a trail at just 0.10% would earn me a residual income of at least $1M per year. but darn, engineering doesn't pay me base on the value of projects under my management.

    thank you for your well wish for me. let's hope I will find someone to take me on board. I heard that getting an accreditation with the lenders is merely getting through their lectures. I should be completing my broker and management courses by the end of the month.
    • sle | 26 Oct 2016, 08:03 AM Agree 0
      Hello CharlieX, I am thinking of having a career change and am interested to hear how you are trracking along. Am also based in Melbourne if you have time for a catchup.

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