The market conditions at the moment are sensational for a mortgage broker, and aligned businesses are looking to take advantage.
Real estate groups, financial planners and accounting practices are among those looking at jumping on the “one-stop-shop” band wagon and hiring a broker; and why wouldn't you?
The hiring process for a broker does come with complications, and is certainly different from hiring a receptionist or an assistant.
After working alongside a wealth creation group recently, guiding them through the process of hiring their first broker, I decided to write this for other groups looking to do the same.
Questions you should be asking include:
#1 -Should I hire or refer? And, how do I pick an aggregator?
#2 - How should I structure renumeration? Salary vs Commission.
#3- Where do I find them? Hiring established brokers vs new to the industry.
#4 -The on-boarding process and managing expectations.
Through a four-part series, I will address each of the above, sharing my knowledge and personal experiences on hiring a broker.
First up: does it make business sense to hire a broker?
Or, while it is clear that the industry is proving lucrative would a referral arrangement with a commission split make more sense?
When hiring a broker, it’s important to get the commission split right and with building groups and real estate groups it can often be challenging to divide up. The aggregator takes their cut, the man at the top wants a slice, then there’s the broker and, in some cases, the sales agent needs to be incentivised in order to refer the deal. This complex divide is enough to put some groups off.
There is no doubt that bringing a broker into your business has the potential to create a lucrative and ongoing revenue stream. It can increase your network and boost lead generation for other areas in the business.
However, the benefit of hiring a broker also lies in the customers experience, making it easier for the customer to do business. When everything is aligned with the brand and the process between the sales agent and the broker is seamless, the positive customer experience is more likely to produce more sales, better customer retention, better relationships and more referrals.
The next hurdle: which aggregator?
This question in itself poses more questions: is that something that you want to choose?
The broker that you hire will have preferences, but it is going to have an impact on your business, the commission split, the support you'll get, the software system, the panel of lenders etc.
Consider also, your expected volumes. This could determine the commission split the aggregator will give you with some having volume hurdles.
And, how much support are you going to need and with which software do you feel most comfortable?
You can always shop your aggregators. In my experience, aggregators can often get competitive and, depending on your volume, counter offers can take place.
My advice is to pick a BDM over an aggregator. The BDM is your point of contact - your go to person if you have problems, need advice on building your business or help navigating challenging deal scenarios. In an industry where relationships are key, your BDM can be the key to you breaking into the mortgage industry and, in some cases, he might even play a role in finding you a broker.