Brokers urged to demand pay rise

by Madison Utley27 Mar 2019

According to an established mortgage broker in the investment property space, the royal commission media coverage and ensuing widespread broker support has provided the industry with a unique opening to demand a raise in compensation. 

“Now that we’ve got Australians on our side, bipartisan support of the political parties, and the media behind us, this is the opportunity that we need to turn around and go to the banks and say, “We deserve a pay raise. We are doing so much more for you anyway,” said John Manciameli, founder of Slipstream.

In the ten years since brokers saw a 30% cut in commissions following the global financial crisis, Manciameli explained that the industry has taken on additional duties – more data entry, compliance work, forensic analysis on household income and expenses – that call for an increase in compensation, not a further cut. 

“Since then, the big four have recorded gigantic profits and it’s obvious that they do have the capacity to pay us,” said Manciameli.

“We’ve got the momentum to expand as an industry. We have to say, if you want more education into the broking industry, if you want better consumer outcomes, then invest in it. Give us 1.1% plus trail.’”

Manciameli believes that Australians would largely support their brokers receiving “a decent income” and would be unbothered by the banks making less profit.

He also stressed that allocating more towards compensation for brokers is investing in the health and future of the industry.

If brokers are struggling with their current balance and aren’t bringing in enough money, they’re not going to attend events or seminars to learn how to improve, they’re going to focus on bringing in new business, Manciameli pointed out. 

Additionally, if mortgage broking isn’t “financially rewarding” young professionals who don’t have the data base or connections that older brokers have established are likely to gravitate towards other industries rather than start “from scratch.”

So far, Manciameli has received overwhelming support while sharing his views on the topic, which he welcomes as he feels unification is crucial to instigating change. 

“If we don’t ask, we don’t get. And if we don’t ask in a unified voice, we get slammed,” he said.

Organising cooperation across an entire industry takes time, so Manciameli urges brokers to engage in this conversation now to be ready for the election and the ensuing regulatory developments.

“Yes, we’re all battle weary. Everyone is exhausted,” he said, speaking to the last few weeks. “But you quickly find energy if you are in a situation where you were facing another 30% pay cut, and now you have an opportunity to get a 30% pay raise instead.”

“What a wonderful opportunity when the prime minister himself is talking about our little cottage industry. The time is right to reclaim what we lost 10 years ago – and then some,” he concluded.

COMMENTS

  • by Tom 27/03/2019 8:51:17 AM

    Exactly right. We are doing and expected to do so much more than prior to the GFC. and for 30% less than we got paid pre GFC. Time to get paid the to additional work, education and responsibility placed on us.

    we should be getting paid at least 1% up front renumeration payment and 0.5% deferred ongoing renumeration payments plus GST.

  • by Brett Mansfield 27/03/2019 9:02:47 AM

    This year Brokers have already taken another massive cut in the form of the utilisation changes to upfront commissions through the CIF reforms. Lenders were provided with over 12 months to implement a system to pay on funds utilised at drawn down at a later point in
    time for subsequently drawn down amounts, up to the maximum facility limit. It is disappointing that many lenders have not followed the intent of this reform and are choosing to not pay brokers the full value of their commissions. This needs urgent attention by all.

  • by SEQ Broker 27/03/2019 10:01:03 AM

    Hmmm,
    I think it may be worth the time to lay out the process of doing a loan. Expose how long it takes to get it approved and settled, the groundwork, the compliance, the paperwork handling, data entry, more calls. And then post settlement actions as well.
    Perhaps it can be somewhat compared to a legal case, where you build your case, gathering notes and evidence, then you put it together to present the case to the Lender (judge) and then once approved you need to follow everything through.
    Except we don't get paid for up to 8 weeks in some cases and Lawyers get theirs upfront in most cases.
    Work out how many hours need to be billed per client to cover claw backs.
    Add it all up and find that 1.1% Trail still barely covers it.