Broker: Treat new agents like new specialists

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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 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.”


  • GTA- Broker on 2012-01-05 6:03:00 AM

    The reason that the bank can afford to do that is they have walk-in clients with a BIG budget. If the new agent is not generating leads as well as an income its an expense. But if the new agent has the contacts anyone would be foolish not to offer a salary. We get paid on funded deals not almost funded deals. Like you said there is two-way accountability...."BRING IN Business" and I will give you all my time. B.E.

  • west- Agent on 2012-01-05 7:01:09 AM

    Broker dont want to share there exp to new agent
    just push them to out and get lead,without detail

  • Used to B on 2012-01-05 7:05:19 AM

    GTA-Broker This type of thinking is exactly what kills the industry you are in. Everyone is so busy eating their own and working on newbies bringing in business - that they don't bother to think of tomorrow. The reason new people don't bring in business is no one wants to have an associate that does not know what they are doing. And the only way to get experience is experience. If you do not help them bridge that gap, they will fail and any potential long term business will be gone. A broker must open his/her eyes and understand that business must be grown and fostered. Let's stop whining about the banks and focus on business growth in our own brokerages instead of who can bring you the most people for your mailing list. That's just called bad business.

  • Maurice Easter Ontario. on 2012-01-05 1:43:10 PM

    I have lived though being a newbie. I waited for 3 months before I was invited to lunch with the experienced people. This was nuts, I made a point of hanging in because I enjoyed the business not because I knew what I was doing. Today I am a mortgage broker with the sole objective of learning more and teaching more. The Broker and Agents are still in the same place. The industry is in rough shape because we are acting like bankers, pay peanuts and keep them in the dark . Forget the mailing list think about how much a brokerages looses when a person does not know how to close a mortgage with a borrower and lender due to ignorance alone.

  • Former Specialist Now Broker on 2012-01-05 6:07:17 PM

    A lot of bank hires have some branch banking experience and the contacts they have made there. The reasons I think they last longer compare to broker world is two reasons. 1) Those with branch relationship will get referrals from branch. 2) The brand name of the bank is the other reason; they naturally will get some residual business just from that. Hence broker world challenge. We have 25% market share and banks have 75%. We have an image and awareness problem. Compound that would a few bad apple brokers and lack of consumer awareness of what we do exactly and walla we are stuck in perpetual 2nd gear. The brokerage mindset and business model is about hiring as many warm bodies as possible. Good desk fees is good business and leave it to the agents to fend for themselves. Following the bank's hiring model would mean expense and accountability to produce that will be placed on brokerage mgmt.

  • Jeremy on 2012-01-06 3:03:36 AM

    Nolan, good suggestion but have you implemented it in your brokerage today?

    The issue is that brokerages today are about quantity not quality. New associates ask the right questions, for the most part, but the brokerages talk a good game and fall way short on follow through. Associates need to take responsibility for themselves and hold the brokerages accountable. It's that simple. If you want training, ask for it, and if it does happen within two weeks, move on. The big 'networks/brokerage houses' need to hold their brokerage partners more accountable too.

    I once had an associate approach me and our brokerage as she was unable to submit with her current brokerage due to all lenders cutting her off for fraud deals. I suggests to this person to leave our industry and go back to whatever it they were doing prior. Guess what? This person was brought on by another brokerage here. What does this say about our industry and more importantly, what does this say about that brokerage? That particular brokerage is known for bringing on part-timers and anyone with a pulse. #fail

    Keep your head up and continue fighting the good fight. To the 'newbies', go less on recommendation and pay and more on which brokerage is actually the right fit.

    On with the mortgage revolution!

  • David - Alberta on 2012-01-06 9:52:14 AM

    I don't think that paying a salary is a solution to our industry challenges. Having managed a small team of Mortgage Specialists at a Credit Union, I can say that these people are largely successful because of their background and connections, not because of the salary. Many Mortgage Specialists have had a career previously in Financial Services, quite often in mortgages, and so have a huge leg up in the knowledge area versus a newbie coming out of our less than perfect licensing course. Additionally, the banks do a far better job in recruiting - meaning they use proven hiring models that help ensure the folks they hire are a "fit" for the position.

    The challenge in implementing what Nolan is suggesting, is that most brokerages are small businesses with limited budgets, particularly in the current economic environment.

    We don't need to grow the number of licensed associates or agents in Canada, on the contrary. We need to increase the market share that the licensed folks currently have. We do that my increasing our professionalism, increasing our profile, and chasing out the incompetent and fraudulent folks that continue to fly under the radar but we all know exist.

    Raising our professional standards, and increasing public awareness of what we do is the key, and this falls to our industry associations. Not to be blunt, but I am beginning to question what the hell all these fees are for that I am paying - when they have done a dismal job of raising our profile. Time to start questioning what we are doing, and maybe focus our efforts as a group into raising public awareness of who we are and what we do.

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