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.