While we expected mortgage completions to be in decline and recruitment enquiries slightly on an upward trajectory for a short period, we did not expect the phones to ring off the hook from mortgage brokers wanting to join us.
It is an all too familiar story that when things get bad some firms stop supporting their talent.
Not getting paid or generally not being looked after properly by the firms that they work for are cited as the main reason for leaving.
One mortgage broker contacting us felt he had been thrown under a bus as he was dropped to the lowest commission tier for not meeting previously set targets during the pandemic.
Unfortunately, the firm that he worked for had stipulated in the original contract that he would drop down to the lowest possible commission tier if targets were not met and at the drop of a hat exercised their rights.
Like many he never saw the pandemic coming and even if he did he never thought the firm would be so callous.
He was unable to sustain a relationship where the firm took a higher percentage of earned income than him and I would recommend all advisers to look at the contract carefully before joining a firm.
Flat Fee vs Percentage Model
Other advisers have raised concerns that the monthly flat fee structure they are currently on is not working for them anymore.
Some firms are continuing to charge self-employed brokers £350 to £400 per month even though less business is being written at the moment.
As the industry rises from the ashes those on a monthly flat fee commission structure will have to work harder to break even.
It is a system designed to put advisers under pressure at the best of times never mind at the worst of times.
What can be more suitable for some is the percentage model preferably with no monthly fees payable for software. This model is working much better at the moment as it does not unfairly take money out of the advisers’ pocket during the current pandemic crisis.
Time for change
What we did correctly predict is that some brokers are going to take advantage of the recent situation by changing firms during what could be a quieter time for some.
Applications and the on-boarding process can if necessary be done at a more relaxed pace for the adviser.
Some advisers just think it is time for a change or they have simply remembered that their firm had been unfair to them in the past – people generally do not forget when they have been dealt a bad hand.
Brilliant Solutions sales director Michael Craig agrees that the crisis will put relationships under pressure as business models are questioned and the needs in the market change.
He believes some relationships will be stronger as a result of this but many brokers now find themselves restricted in many different ways that now cause them to question the relationship they currently have as a whole.
And he added that while there does need to be some give and take, if a relationship comes down to a contract at a time like this then that alone is a sign that something has broken down somewhere.
Several advisers have seen an opportunity to move from an employed mortgage adviser position to a self-employed role.
For some this is seen as a natural progression where they move from a restricted lender panel to being truly whole of market.
Being self-employed also means there is no cap on income and they can work remotely if they wish and be in charge of their own diary.
In times such as this mortgage brokers are going to look for that silver lining by reviewing their current circumstances and seeing if they can improve upon their situation.