Brokerages often consult me on remuneration packages, specifically around the industry standard for a salaried broker. They’ll ask about the different commission splits company’s implement and whether or not their brokers are asking for too much. Ultimately, they want to know what’s the best approach to adopt.
There is no one size fits all. There are numerous different commission splits and structures on offer to brokers, just as there are several groups that elect to pay a salary. Brokerages I meet often say they don't want to pay a salary. They are of the opinion a salaried broker isn't a proper broker. They want to find a broker that’s hungry for business, and they want a hunter that is going to rattle cages and bang on doors in order to put food on the table. They don't want a complacent broker that sits behind his desk waiting to collect a pay check.
Personally, I find it comes down to what the business is trying to achieve and the type of person they want to attract. In my experience, offering a salary is a great idea. With so many barriers for new entrants, offering a salary can encourage a gun to leave the bank and approach something new. Or, it can encourage someone that might have left the industry to come back.
I’m working on roles at the moment for a senior mortgage broker which include a high salary, strong commission structure with a higher split on self-generated leads, car allowance, phone, laptop and even a referral arrangement that sees the company pay referral fees you’ve generated.
This kind of role is attractive to a range of different people: brokers that want to be part of a bigger team, brokers that are lonely working from home and brokers that want the business, administration and marketing support that only being part of a bigger group can offer.
It’s attractive to mobile lenders that are within a bank, looking for something with a little more flexibility, and that are concerned with jumping into a self-employed role after working for something corporate and structured.
But, the question remains: does this mean the broker will become complacent? In my experience it can mean brokers actually work harder. A role like this can offer progression, which is another key motivator. It also offers the opportunity to help, coach and train less experienced brokers.
The best motivator’s are intrinsic – doing something because you want to, something you’re interested in and something that has a positive impact. To assume a good broker is only motivated by money is cynical. It’s essentially like motivating with a carrot or a stick: work harder to earn more, or don't and you'll have nothing.
By providing a salary, your offering is going to appeal to a wider audience. It will increase the talent pool and encourage a greater range of people to consider the opportunity.
If you’re interested in the above role and you're in Melbourne, Sydney or Adelaide, please don't hesitate to contact me for a confidential discussion.