A seasoned broker is advocating a sea-change in the relationship between new agents and brokerages, suggesting the industry look at adopting the mortgage specialist model.
“I don’t think people come into the industry looking to work part-time, but what happens is that many don’t get the training, accountability and compensation they need to take on brokering full-time,” said Nolan Matthias, lead planner and owner of Mortgage Architects – Matthias Financial Inc. “I think that why we see a higher failure rate among new agents than among new mortgage specialists.”
Matthias is suggesting the industry look at following the lead of the big banks and move to a sort of guaranteed income model for new agents. Brokerages would pay them a set salary during an extensive training period for as long as six months. They would also hold onto any commissions they earn during that period, with brokerages deducting those earnings from their salaries.
The goal is to provide those new entrants a living wage at the same time they access the kind of intensive training they’ll need to make a go of it, said the Alberta mortgage professional.
A key part of that formula is “accountability,” said Matthias, arguing banks may be doing a better job of ensuring new specialists are “ making the calls and generating the business” because those road reps are being held accountable to a supervisor.
The salary itself is another incentive to make the necessary commitment to the job, he told MortgageBrokerNews.ca. Brokerage payroll costs would be partially covered by a higher split for a probationary period following that six-month residency.
Matthias's analysis comes on the heels a new report suggesting the majority of brokers think the industry is hamstrung by an excess of mortgage professionals.
While 33 per cent of brokers canvassed for the fall 2011 CAAMP-Maritz survey characterized that number as “just right,” a whopping 61 per cent said “there are too many brokers” in the Canadian industry. Some 7 per cent argued that “there are not enough.”
The results speak to growing broker concerns around “part-time” mortgage professionals and any consumer perception challenges associated with those agents.
Matthias is hoping to increase the viability of full-time brokering for new entrants.
“Think about it,” he said. “There are far fewer mortgage specialists who fail than mortgage brokers. It can only be the result of better tools and higher expectations.”