The lack of young blood in the broking industry has been well-publicised over the past few months and spokesgroups continue to look for ways of attracting fresh faces to loan writing. One potential ‘lure’, which is already being used by a small number of aggregators and franchisees, is paying new brokers a living wage while they get their feet on the ground – but Choice Aggregation CEO, Stephen Moore, says that, while a starting salary can be a good option for some aggregators, it isn’t sustainable for all.
The debate over new broker salaries was reignited last week following an article published by MFAA freelancer, Alexandra Middleton.
In the article, Tag Finance broker, Sam Gawenda, describes how the company offered him a small salary when he first started out, allowing him to focus on doing things right – rather than on how he was going to pay his bills.
"A lot of brokers are thrown in the deep end," says Gawenda. "They start sub-contracting straight off the bat even though they don't have experience in the industry."
But, while Moore says there are a number of individual business who pay brokers a salary to start with, including many Choice representatives, the solution may not work for everyone.
“I think the challenge is how sustainable that is – I think that’s certainly one approach. The resistance for people to become a broker is, particularly if you’re an employee, is the day you start your income can be zero and that is certainly a key barrier.”
Furthermore, Moore doesn’t believe the lack of immediate income is the primary reason behind a dearth of young people in the industry. And, while bigger aggregators may be better able to afford salaries for new brokers, Moore says smaller outfits still have much to offer in other areas.
“I think the root cause is still a lack of awareness on how good a profession broking can be…I don’t think it’s about size; in Choice Home Loans, we’re specifically looking to run seminars for new-to-market brokers. That’s about educating around how good the broking profession is, earning potential and why it’s the right profession.”
“I don’t think it’s about size – it’s more about appetite. From my perspective…we need to look beyond the short term and look at where the future top brokers are coming from.”