The latest earnings and employment figures from the Office for National Statistics found that the median monthly pay jumped 6.3 per cent in January compared to the same point a year ago. This is up substantially on pre-pandemic levels too, at 10.3 per cent above median monthly pay in February 2020.
Concerns over the potential impact that such pay rises will have on inflation prompted Andrew Bailey, the governor of the Bank of England, to urge employers and employees alike to show restraint.
But how is this feeding through into the mortgage advice sector?
A bidding war for staff
James McGregor, director at Mesa Financial, suggested that the fact the broker industry is heavily commission based meant such rises may not translate directly into the intermediary industry, though he noted he was seeing a “huge grab for talent” across other areas of the market, such as bridging and development lenders.
He continued: “We have seen a huge bidding war for staff over the last six months and can see this would have definitely led to an increase in salaries. With regards to our own staff I believe they are rewarded extremely well within the market, but naturally as the business grows so does their pay.”
McGregor suggested that market costs won’t impact future recruitment plans, adding: “When you come across great talent in our industry it is key that you secure them.”
Finding a cost-effective way to expand
Lee Flavin, founder of MyMortgageRewards, said its business model was somewhat inspired by the way that pay has moved across the intermediary market.
The success of his AccelerateMyMortgage business ‒ which provides borrowers with a way to earn cashback on their online shopping, which was then used to overpay their mortgage ‒ had left him at a crossroads on how to proceed. The decision was made to offer the service to other brokers through MyMortgageRewards, as we exclusively revealed last year.
Flavin explained: “The alternative was to grow the firm in order to manage new leads coming in through AccelerateMyMortgage, and we might have to pay higher wages than we were able to in order to attract suitable candidates.”
Instead, by opting for the ‘software as service’ route, the business has been able to expand through bringing in staff who, from a mortgage advisory perspective, are non-skilled.
Paying a premium for experience
Martin Stewart, director at London Money, warned that brokers can get into the mindset of thinking they can “control commercial terms”, but overlook the fact that the costs of running a regulated business are rising exponentially.
He continued: “I think talent does attract a premium but I would suggest that it would also need to come with experience. Anyone, and I mean anyone, could have made a success out of broking in the past few years. I personally am on the lookout for ones that made it through 2008-2012, that says a lot about them as a person.”
Aaron Strutt, product and communications director at Trinity Financial, noted that it can be difficult to attract new staff, particularly in such a busy market, coupled with the fact that so many other brokerages are looking to recruit.
He added: “More firms are taking on younger advisers that need training because of recruitment issues.”
Stewart also cautioned against greed within the mortgage sector. He argued that there are lots of people, at all levels of the industry, who are being overpaid for what they deliver, and suggested the pandemic had been effective in “revealing a lot of that to the industry”.