New agents to brokers: We have a bone to pick with you

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Brokerages have largely failed to give young agents the structure, training and mentorship they need to make business for themselves – that criticism from none other than the newcomers themselves, according to research.

"After completing the course I enthusiastically sought out a brokerage that would continue my training through a mentorship program,” says one young agent, cited in the report from industry trainer REMIC. “I could find the right product and lender for a client, I just didn't know how to find a client.  And I couldn't find a brokerage to teach me that in a concrete, structured way that would produce meaningful results."

The story is but one of many gleaned over the course of several months and through ongoing discussions and feedback, according to REMIC’s Joe White. As a group they expose the very practical training gaps in the education of new agents as they embark on a new career path.

Many of Canada's next generation of mortgage brokers enter the biz coming straight from university or college, says White. They’re “hungry” for that kind of structure in the brokering industry.

That model would treat agents to more-formalized post-hiring training and mentorship.  

Although several brokerages already provide that kind of nuts-and-bolts instruction, concedes White, it isn’t the norm.

Brokerages tend to focus on providing hard-skills training so that the industry has technically proficient practitioners, "which is fantastic for consumers," said White, voicing some of those concerns as a panellist at last week’s CMP Mortgage Summit.  However, "young entrants in this industry are craving more in depth, soft skills training to learn how to manage their business, incorporate technology, grow that business ethically and flourish as a young professional in what can be a fantastic life-long career."

Other industry players have touched upon  graduated licensing as a possible solution to what many charge is an educational gap.

Inexperienced part-timers and newcomers to the industry should undergo a two-year apprenticeship before being eligible for licensing as agents, said a respected veteran broker.

“Allow part-timers and new agents, with no experience who wish to develop into full time agents, but do not allow them to be licensed,” Brian Matthey, head of Verico The Mortgage Professionals in Kingston, Ont., told MortgageBrokerNews.ca last fall. “Have a minimum two-year supervisory period during which they have to work for a licensed broker who has a minimum of five years’ experience. That broker (would then) have to sign off on everything they do and assume responsibility.”
 

  • Jack on 2012-06-09 9:31:51 AM

    Interning for free? I presume as a teacher instructor you get paid. Imagine traing a new agent. Even for free (this is a commission business) so of course it's free. The broker mentors them in all technical and marketing aspects for free too. It's only once the agent starts generating loans that the broker has any chance of recapturing the investment of time and mentoring. Usually about this time is when the new agent decides they "know it all" and departs for the 100 percent house. Or demands same. What really needs to happen us that lenders pay finders fees of 80 percent to new agents for two years. The balance to the broker IMHO

  • Don C on 2012-06-09 9:39:32 AM

    Problem is, somewhat to David's point, most new agents are a reflection of the mass which is the industry today. Before even having a deal to work with or a plan to get deals the first thing they ask is "what's my split?". Not sure where they pick this up from, perhaps the education providers. I say like the "mass" because the bulk of agents are soley focus on split but fail to realize split does not equate to money (long term).
    I'm pretty sure the larger houses provide substantial enough support to get one on their way and suspect the agent profiled was one of many who seek smaller firms, or franchises simply on initial split offering. No disrespect to smaller firms what so ever however many (not all) are simply not equiped to put resources in place to ensure a proper education process for new agents and are set up for producing agents to excel.

  • Ontario Broker on 2012-06-09 10:57:24 AM

    joe, why should I teach a broker agent for free for 4 months and then person leaves my firm and joins some one else for 90-10% split. why should I train my own competition?

  • Joseph White, President, REMIC on 2012-06-10 4:33:18 AM

    Jack, I think you misunderstood. by interning for free I mean that any business this "intern" produced would go to the brokerage, not the intern.

  • Joseph White, President, REMIC on 2012-06-10 4:37:02 AM

    "Ontario Broker", I think you also misunderstood my point. Perhaps I should have rephrased it.
    The intern would be working for the brokerage but instead of earning commissions on deals he funds, they would go to the brokerage as part of the internship.
    I'm not suggesting that new agents would do this on a regular basis, just that in this particular case that student made the point.
    I do think, however, that new agents would be willing to work at a reduced commission to get mentored, as long as they felt the mentorship was worthwhile and meaningful.

  • Ron Butler on 2012-06-12 12:39:02 AM

    I think the real question here is one of business models.

    New agents do require a high degree of market planning, training, supervision and direct mentor communication to have any real chance of success. Most agent split models do not support the level of broker attention that is required to develop highly sucessful agents.

    The real answer may be changing the way we structure our businesses. I don't have a solid answer yet but its clear the growing prevalence of high split models does not foster the development of new agents.

  • Terrilyn Moore on 2012-06-12 1:04:41 AM

    I totally agree with the whole internship idea. It is good for the newbies to learn hands on but not a sink or swim method. I think hiring the person either on a per file basis, hourly wage or a small percentage of the commission is a great way for that person to learn. You cannot expect somebody to work for free. That is a good way to not have any new recruits enter the market. But to pay then either a small hourly wage or fee per file is not unreasonable. Essentially you would be hiring the person to do a lot of administrative work, with specific instructions along the way and getting that hands on experience.

  • Karim on 2012-06-12 4:00:03 AM

    My perspective will be somewhat different than most comments on this discussion- Having worked with the regulator, I can tell you that the training, mentorship, whatever you want to call it, is the responsibility of the Principal Broker (in Ontario). As an instructor, there are a lot of new agents that keep in touch well after the course is done – some of them complain about the brokerage they have joined. The common feedback I receive is that they got trained on the submission system, and met a handful of lenders, but never how to solicit and close a deal.
    The brokerage MUST teach the new agents on how to sell – some of you are concerned about the loyalty of that agent after investing some form of training? Really??? Come on, if you are willing to take 50% of their cut on their first few deals, I am sure you can find time to properly train that new agent.
    At the end of the day, we are an industry, and those new agents will represent OUR INDUSTRY to the public. Therefore, it is imperative that experienced brokers teach how to sell to new agents.

  • BC Broker on 2012-06-13 2:19:35 AM

    Ummm... In the provinces of BC and Ontario a new agent is required to be licensed under a DI (designated individual, or broker of record) for a period of two years before they can get a full brokers license... That means that the DI is legally responsible for every single transaction that new agent processes. Full review of all files is supposed to occur... Are we really publicly stating that this is not happening? If it is not... Then those that are not following the terms of the licensing should not be allowed to have DI status... Period.

    No "broker" should be taking on agents if they do not have the capacity to properly monitor their business and coach/mentor them. The sad truth is that most bring on agents simply for the added volume to their business, not because they want to create a strong viable and professional group of people. Many will deny that until their last breath, but this article only proves that this is true of too many brokerages. Yes there are always exceptions to the rule.

    Brokers need to step up and start doing better, especially if we want consumers to take us seriously. As it stands right now... All we are doing is ruining our own industry. N

  • Paul Therien, CENTUM on 2012-06-13 2:29:20 AM

    It has to be said... How many brokers or record or franchise owners actually know HOW to properly coach and mentor their agents? Too many people assume that the second your are a manager or owner that you know how to do this. The reality however is that nothing could be further from the truth.

    We as an industry expect brokers and business owners to step up to the plate, but where do they get the tools that show them the how?

    CENTUM launched our PEP program in January of this year, and it is a coaching and mentorship program for agents AND brokers/managers. We teach managers the how when it comes to being a good coach. We did it because of the lack of training that is available to business owners in our industry. The results so far have exceeded our expectations for the positive impact. Brokers now have the ability to spot agents that have a true interest I this profession as a career, and are not afraid to have the tough conversation with those that are not.

    If a manager is not provided the tools and training to be effective at this very important part of their jobs, then how can we assume that they should be experts? Human Resources is the toughest part of being a business owner or manager, it is not typically a born trait people have.

  • Edwin on 2012-06-13 2:46:31 AM

    I have to agree with Paul from Centum... I am not a part of centum, but when he says that brokers are not educated for HR he is correct. I started my business a decade ago, and I have yet to see a brand offer this to their franchises. I belong to a big brand now, and it simply is not taught - although I was told it would be. I would be interested to see if Centum actually does teach this, or is it just more hot air from a brand trying to sell franchises.

  • Paul Therien, CENTUM on 2012-06-13 2:56:15 AM

    Edwin, I would happily speak to you about what our PEP program teaches our franchise owners/managers so that you can see for yourself that it is not just hot air. If you di want to discuss you are welcome to email me at paul_therien@centum.ca and we can go from there.

    We spent a year in development of the program, and consulted with industry professionals and with HR experts to ensure that this coaching and accountability program was the best available.

    CENTUM is committed to growing our business through the continued advancement of the professionalism of our network and the industry, because I the end the only thing that matters is the experience the consumer has once they are face to face with a broker or agent. That experience is the best marketing our industry will ever have.

  • Greg Williamson on 2012-06-16 2:21:06 AM

    In my experience as a broker owner and as a long time industry trainer there is a real irony in this discussion, and it is not just new agents suffering from this.

    A healthy dose of perspective I think is what is needed. As others have indicated the problem and therefore the fingers should not be pointed at the brokerage house or owners I think.

    Many mortgage agents are singularly focussed on trying to get the best possible split from the house and then demand high level training. This simply is not an economic model that does not work well in my experience.

    Consider that ANY business must have a marketing budget and part of that budget is spent I think on understanding what I should be doing in marketing etc. I have seen many newer agents enter the business with little or no money set aside for training, or marketing. If I demand the highest split from my brokerage then I think I should pay for my own training, and there are many economical options available in our industry. If I am prepared to take a lower split then why don't I ask my broker to pay for my training with an outside training organization? Either way, everything I do in my business is my choice, and It simply does not work to blame others when I am not getting everything that I say I want.

  • Nolan Matthias on 2012-06-16 2:22:29 AM

    I don't think creating a mandatory supervisory period would be all that helpful given the horrid track record "mentors" have with respect to creating great talent.

    Any attempt to create a mandatory supervisory period would have the potential to be exploited by "mentors" as an added revenue source, when in fact those mentors should be making an investment in new industry members, not an income off of them.

  • Agent in ON on 2012-06-16 2:50:14 AM

    I echo the same message of other new Agents. Training and mentoring is lacking. I actually had my previous broker say that he doesn't train new agents because of the high turnover - seriously, what do you think is causing the high turnover? How do you expect anyone to succeed without any training and coaching.

    This appears to be systemic issue within he industry, where brokers still spend 99% of their time as agents and the rest of the time trying to manage the brokerage. It's a model that is doomed to fail and actually pushes out great agents.

    I shudder when I meet other Agents who don't understand amortization, or their obligations under Privacy legislation, or that they don't understand that they are selling money.

    Brokers complain about split ratios, but I have to ask. Regardless of the split, what exactly are you offering that Agent in return for the split? What is your value proposition?

  • Liz on 2012-06-16 2:59:01 AM

    I agree completely with Greg. Many do start off in the industry, ill-prepared, no savings set aside, and absolutely no idea what they are doing. The education piece does not prepare someone for "real life" brokering. I have taught before, and when I asked what has brought them to this industry, they generally say money. Let's be real here, this can be a lucrative industry however, you have to work for it. If this is the career you want, have money set aside, read books, use the internet and understand you have to work your way up the ladder as in any business. I am tired of the whining already.

  • Paul Mangion on 2012-06-16 3:23:40 AM

    I agree with David. I am sick and tired of agents complaining about the lack of training. I have great training programs and recomend others and very few want to spend the money in their business. A business plan is now mandatory and it must include a budget which they have to spend. You can offer the best training in the world and only a handfull of agents will actually get it. The rest should be encouraged to leave the business before they can do any real damage.Why cant new agents understand that without loyalty and incentive people with the real knowledge will not be willing to share it with them!

  • Paul Mangion on 2012-06-16 3:29:49 AM

    This question is for Agent in On. What research did you do that ultimately allowed you to join the brokerage that doesn't train? Was it the split, false promisses, did you do any research on them and talk to other agents in the firm? Short of false promisses which I would give you 50% blame and anything else would be 100% blame to yourself. This is your future so spend the time be selective. If I talk to an agent first I won't even consider hiring them until they have interviewed with others so they really know what is out there. Within 60 days I know which agents I want to spend time with and which ones I don't want to waste my time with.
    Cheers!

  • Paul Therien, CENTUM on 2012-06-19 3:40:45 AM

    I think it is important to know that there are a great many business owners in this industry that do spend significant time and resources on training. Everyone offers training to some degree, be it internal programs or external. We have several companies in our industry that make a significant income providing only training, but let’s not kid ourselves, there is more to it than just offering a training program and then saying “you have been trained, now go out and sell”.

    Most highly successful business owners and managers, regardless of the industry, will tell you that the ongoing coaching and mentoring of sales teams are key to those sales teams being successful. It mitigates high turnover, and fosters a commitment to the success of the business as a whole. A standard coaching program allows for regular sales meetings with the team as a whole, and regular “one on one” coaching sessions between managers and their team members. This is not new stuff, it has been practiced for decades in almost all highly successful organizations. In fact, all we have to do is look to the most successful brokerages in Canada who have very low turnover and a high per agent production level. They all do coaching in some form on a regular basis. The very minute you hire anyone to work for you, be it as an employee or a contractor, you become a people manager and that means that the people should become a top priority.

    It is true that many agents enter into the industry unprepared, but it also is true that too many brokerages entice new agents with grand promises of training and coaching who fail to deliver. The reality is that both parties need to make a commitment to the business, and to each other. To do anything less, for either, is setting the relationship up for failure. If any broker is not prepared to take on the added responsibility of being a true people manager, then they have to understand the consequences… high turnover, high dissatisfaction, and agents demanding higher splits. It also means that you have to invest more time in your teams, and less time doing deals yourself. It is the difference between being a mortgage broker, and being a business owner/manager.

  • Julia Krause on 2012-06-26 3:58:13 AM

    Paul Therien of CENTUM, I like the cut of your jib! What you say and the way you say it makes so much sense. You have partially restored my faith that there is hope for the mortgage broker industry :)

  • Derek on 2012-06-29 12:06:17 AM

    I haven't had a chance to read all of this post - but it must be frustrating going thru all this training - yet a bank teller can sell mortgage products with no training at all.

  • Brian Matthey on 2012-06-30 12:50:36 AM

    Great comments by everyone.In our company we have made it a practice to put people with no experience into an underwriting role for up to two years under an experienced broker.
    During the training time,the underwriting is allowed to solicit deals to be brought into the supervising agent.The supervising agent receives a 50% split on the commission and the trainee the other 50% based on company splits in effect.We pay the trainee a basic salary so they have money to live on and we bank their commission received for up to two years.On graduation to an agents role they already have a bank of commission to draw upon until they start building a book of business of their own.In this fashion,they don't have to worry about about cash flow when starting out on their own.
    As far as the supervising agent goes,we have had these trainees work under the broker owner and also work under an agent.In an agent scenario,we sometimes participate in the cost with the agent.The agent has the advantage of an assistant at a cost that is subsidized in turn for the training they provide and participation in whatever commission the trainee can create.In the trainee,they have hands on experience in a wide range of deals from a ground up perspective and build on their experience and confidence.It is equally important that the agent obtain the experience on the client side and on the lender side.

    We have graduated 4 new agents under this program over the last 6 years and they are still with us today building a book of business that is built on ethics,responsibility and experience and a dedication to their client.The ethics of training have to have an equal balance to the mechanics.We make an investment in that agents future in time,money and experience to help them succeed.


    It is too bad the industry doesn't recognize that professionalism is they key to our growth,expansion and success in the eyes of the public .Too many are focused on the growth of numbers for the sake of volume and use the "throw them against the wall and see who sticks" scenario with little or no supervision.The growth of "fiefdoms"does nothing for the reputation of this industry.

    There is more to this industry than the "sale of mortgages"This should be an industry based on a dedication to a client's financial future and a mortgage plays a continual part in the lifecycle of that client.It takes continual training, development and investment to be the professional you need to be now and in the future as this industry changes and to recognize the opportunities you have with your client to guide them in their mortgage choice not only now,but in the future.Rate means little in the hand's of a true professional.Commission means little in the mortgage choice for a client in the hands of a true professional.

    Those that take the time to invest time and money in the development of their agents will find it pays big dividends down the road.Those agents that enter this industry and expect to make big money with little investment in themselves in time and money in continual training both inside and outside of that provided by their brokerage will find themselves out of the industry in the future.

    It is encouraging to see that I am not alone in my sentiment.

  • Gale Tracey AMP, Lead Planner, Mortgage Architects on 2012-06-09 4:58:00 AM

    That is a great idea Brian has. In BC our assistants have to be licensed to work on our files and view confidential client information.The broker decides they can broker a deal depending on experience level as we are fully responsible for them. Most of us veterans are former bankers with years of experience whereas todays agents more often than not do not come from a banking background. Just like a trade, an apprenticeship program is definitely worth considering.

  • Ron Price / DLC Fergus on 2012-06-09 4:59:07 AM

    Finally the lack of training 'of the business' has been sighted as a short coming at the brokerage level. I'm all for 'apprenticeship' and would like to see more practicle education especially of the marketing side. Changes along theses lines will further improve our 'quality' as a whole.

  • Suz - Team Leader on 2012-06-09 5:02:55 AM

    I agree that it would be great for all new brokers to join a team for the first couple of years, to get proper training... I have a team of my own that has experienced and new brokers BUT I do not agree that they should not be "licensed" . Licensing is required to do 99% of this job aside from some of the administration. The Team Leaders would not benefit from all new Team Members being un-licensed, How do you train a broker who is not allowed to talk to a client - How do the new brokers get new clients if they are un-licensed. Licencing is a requirement of FICOM to do this job...
    I suggest what we do in our team, which is work with the new brokers on every deal that comes in, start to finish, and assist them in going out and getting those new clients...meeting the clients with them, weekly training on different topics, and work deals together... Follow a proper plan, and move them into the industry with real hands on deal training. Don't just let them sit at home in a corner on a computer, losing their self esteem and getting frustrated. Get them in the office every day learning and watching and listening and interacting with other team members and other brokers.

  • David O'Gorman CPMB on 2012-06-09 5:21:14 AM

    ....but all the new agents want a 85 to 100% split!!
    How is a brokerage going to provide mentoring, handholding &/or education if they are only going to earn 0%-15% gross revenue from someone producing a low revenue? If you charge a fee for the education/mentoring the agents won't pay for it or will work elsewhere.
    Why would an agent/broker sign up with a brokerage with one office & dozens of agents/brokers spread across the province/country and expect to get personalized mentoring/education? Defys logic.

    There is little difference between mortgage brokering sales & any other sales/marketing position, its a plan that is worked to produce numbers. Those that don't plan to work, by default plan to fail.
    I would love to know the true drop out rate in the industry in the first two or three years after licensing. In Ontario those numbers are obsured because of the two year licensing cycle.

  • Julia Krause on 2012-06-09 5:34:25 AM

    Hello...? Hello...?? Is anyone out there?? I have been talking about the need for practical, real-life training for new mortgage professionals for YEARS and no one wants to hear it!! I trained mortgage professionals across Canada between 2005 and 2008. Most newer mortgage professionals weren't willing to spend, or didn't have, the money to take the course. They are told they can learn the business as they go from someone established & experienced. But guess what? They also learn BAD habits and UNETHICAL behaviour along the way. They learn shortcuts, and they don't learn all the details. It's all just 'Get the deal done'. They also expect that whatever company hires them will provide training. But guess what? It doesn't happen! So I started pestering companies and the associations to offer practical, real life training. No response. I also proposed that companies have a 'deal coach' on staff, someone whose sole purpose is to assist new agents with their deals, explaining everything so they learn how deals are structured and presented to lenders, and also why a deal does NOT work. Again, no response whatsoever to that idea. I've now come to believe that companies don't want a deal coach to teach ethical behaviour in this industry because it means some deals won't get done. And when you get right down to it, it's all about MONEY, isn't it? It's not about helping clients or getting them the best mortgage for their needs... it's about VOLUME and QUANTITY of deals getting done and MONEY coming in to support the big salaries of all the puffed-up bad-suit-wearing wind-bags who call themselves 'managers' and 'senior VP' or whatever other title they need to feel more important. Yes, I'm a woman so feel free to make your idiot comments like "It must be your time of month" or anything else you can come up with, but I've been in the biz for 20 years and I've seen it from coast to coast. You know I'm right about training and ethics. And I'm using my real name, too. Have a great day, everyone! :)

  • Joseph White, President, REMIC on 2012-06-09 5:56:41 AM

    In speaking with our students we've found that most are looking for a real, meaningful career. To paint them all with the same brush is, of course, unrealistic, but for the majority they expect this industry to be like others: you go through a rigid hiring process and then you're plugged into a development program that can, and in many cases should, include a mentorship program.

    While I agree with David O'Gorman's point about new agents wanting a high split, I've also spoken to students, as recently as last week at the CMP Summit, who would be willing to intern for free for a few months to learn what's needed to become successful.

    I think we may need to reconsider our hiring practices and go after those who see the value in the mentorship process, not those who want it all before they've even brokered a mortgage.

    While new entrants into our industry must learn by taking a licensing course, and must pass a regulatory licensing process to ensure that the public is protected, the real "heavy lifting", in my opinion, must be done by the brokerages who are hiring them, and it all begins with an in-depth interview process. As was said by Gord Dahlen of DLC last week in our panel discussion on the stewardship of new agents at the CMP Summit, what would we do differently in the hiring process if we were paying these new folks a large salary? You can be sure there would be serious vetting involved.

    Time for us to do the same. And increase this market share!

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