The tides have turned in the direction of 100 per cent commissions for agents, and the only thing brokers can do is go with the flow, argues one team leader, pointing to the success of his own flat-fee model in winning back associates.
“Using the commission split model, I had three agents leave because they thought they were losing too much in the deal,” Shawn Allen, owner of the independent Matrix Mortgage Global, told MortgageBrokerNews.ca. “After implementing a small transaction fee instead, they have now come back.
“In this environment, brokers can’t be greedy.”
The comments may raise hackles on the backs of many principal brokers and network execs concerned the move to slash their commission splits effectively compromises the industry’s health for the benefit of the high-performing agents.
More specifically, the reduced income for the brokerage erodes their ability to maintain the agent support and training programs they traditionally provide.
Allen, who leads a team of 35 agents in the GTA, disagrees.
“I truly believe that everyone has the ability to succeed, and if given the right amount of support and training they will,” he said. “The training at our brokerage is free of charge to agents, and new hires get instruction that expands on the material taught in the mortgage agent course.
“We also, like most other brokers, bring the lenders in.”
Much of that may be subsidized by the flat fees, about $475 per deal Allen collects from his agents. That is often adjusted downward for smaller transactions, he said.
"We are still getting a cut, but not so much that it acts as a disincentive to the broker to get bigger deals but also more business,” Allen told MortgageBrokerNews.ca.