The challenge of recruiting Mortgage Brokers

The difficulty in recruiting Mortgage Brokers – a Recruitment Consultant’s perspective:

Recruiting a Mortgage Broker has never been an easy task; in recent years, recession and regulation has made this even more difficult. These factors have ultimately resulted in a shortage of experienced Mortgage Brokers in the industry.

Downturn in the mortgage industry:

In recent years the mortgage industry has gone through some testing times. The crash of the global economy in 2008 resulted in the UK housing market stagnating with lending availability heavily reduced and only available for a small proportion of customers. With it becoming increasingly difficult to place a mortgage case and a reduction of procuration fees, the majority of mortgage brokers had a decision to make; diversify their business or leave the industry. For those that diversified, focusing on protection sales was an area to minimise impact on business levels.

Changes to regulation:

As the industry recovered, regulations were under scrutiny to ensure a similar crash would not be experienced again. The Mortgage Market Review (MMR) was set up to analyse the industry and how advice was provided to clients, this had impact on both lenders and brokers. As a result of the review a large number of brokers did not meet the new regulation requirements and unfortunately had to leave the industry. The increased compliance and administration also frustrated a number of brokers, which again led to a further reduction in their numbers.

The recovery of the market:

With the economy strengthening, the mortgage market has returned to near pre 2008 levels. An increase in mortgage enquiries has led to the majority of brokerages and lenders needing to recruit mortgage and protection advisers. However with the large number of brokers having left the industry, this has resulted in a major shortfall in candidate availability.

Trainees:

Training companies have been providing new entrants with the tools to qualify as a Mortgage Adviser; this of course has its benefits, however, this can also cause problems. New entrants quite often have misconceptions of how the mortgage industry works and the stigma attached to certain lead sources i.e. Estate Agency.

Some clients are able to facilitate recruiting a Trainee Mortgage Broker without holding a relevant mortgage qualification. This tends to be a lot more costly and time consuming but can have advantages of developing an adviser without any preconceived ideas.

Quite often new entrants will be expecting a salary, commission, leads provided and most of all flexibility! Although not impossible, this kind of offering is rarely available. Flexibility tends to come after the hard work has been put in and they have proven themselves to be a good broker. We regularly find ourselves having to educate candidates on how the industry works and the opportunities that are available for a trainee.

Deal voucher websites also add to the problem, advertising heavily discounted CeMAP courses, giving the impression that anyone can become a successful mortgage broker overnight.

Current Mortgage Brokers:

Recruiting experienced advisers also poses its own problems:

  • You will likely to be competing against a number of other companies for the same candidate. Salary, commission structure, working environment and working hours are all key points to consider. In the current climate, if you identify a candidate you would like to recruit it’s just as important for a client to sell themselves to the candidate as it is the other way round.
  • With business levels increasing, experienced candidates are less likely to walk away from sizeable pipelines.
  • Also, unless a candidate is 100% set on leaving their existing employer, it is far easier and cheaper for an employer to make a flattering counter offer rather than having to go through the recruitment process themselves to find a replacement.

Returning industry professionals:

Some clients have mixed views on returning industry professionals. As long as compliance departments can be satisfied, recruiting a former adviser can be a far easier solution than developing a trainee or breaking the bank for an experienced broker.

In summary:

In what is a challenging market, clients need act quickly once they identify a suitable candidate, make them feel wanted, and most importantly be open minded when thinking about their recruitment strategy.

Please note this article is a personal viewpoint

Best regards,

Graham

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