Mortgage brokers operate in a world of high competition and, as with sales staff, pay varies by the type of employer, location and amount of business they bring in. Starting salaries tend to be around £19,000 - though some employers offer closer to £25,000 so there’s quite a difference but, of course, pay will be influenced by regional differences in addition to the adviser’s background and experience.
A straw poll would suggest that an adviser based outside of London, with a few years experience, may expect to be paid a basic salary of £25k-£30k.
On top of that, commission structures also vary depending on the size and nature of products sold: insurance policies sold alongside mortgages, for example, may carry greater commission rates. The result is that job postings typically list two definitions of income: basic salary and a second bracketed salary, ‘on target earnings’ (OTE), which may be much higher and is only an estimation based on production volumes.
Headline OTE figures can be attractive, but they should also be realistic. If you’re recruiting and setting high OTE expectations, the business needs to ensure these are achievable by providing support, in whatever form that may take. Not doing so risks a high attrition rate and implications for the ongoing cost of recruitment.
In relation to targeted revenue, it would seem that generating about £80k in income is an expected minimum benchmark figure, although the usuals caveats, including location, will apply. A broker may then expect to earn a percentage of this as a bonus, although some models will only pay bonus after a minimum threshold has been achieved.
Remuneration structures can be complex and wide-ranging: here are some tips on striking the right balance with pay and remuneration.
Align earnings with business goals
The pay structure has to align with the business’s goals for it to be successful. A business should analyse its past, current and forecasted growth to inform what level of sales volume needs to be achieved. By studying those figures you’ll get a better understanding of the level of compensation you can pay your brokers, without the risk of exceeding your budgets.
Be upfront and consistent when paying commission
If you’re paying based on performance, you’ll need to decide at which point the commission is actually paid. Is it as soon as the mortgage is agreed or after an agreed period? Also, consider whether there should be any clawback terms in order to manage risk.
Reward with perks
Clarity on other benefits on offer will add to your employees’ satisfaction, and relieve some of the pressure of working towards commission targets to meet their income needs. These might be higher pension contributions, a steadily rising number of holidays, or the offer of private health insurance.
Flexible working hours are often worth their weight in gold, especially to employees with young families who might be balancing childcare with full-time work, or those who care for an elderly relative.
Perks also go a long way in helping you distinguish your brokerage from others, and when done right are seen as a valuable reward for employees. For instance, you could offer an appealing working environment with quirky office features that make the experience of working for you that bit more enjoyable.
If your remuneration package is not suitable or is missing a trick in providing a decent compensation package, employees will become disenchanted and start looking for jobs elsewhere. However, involving them in helping you shape a package that works for all parties can pay dividends by enabling them to control the factors that lead to their success and greater earning potential, while also helping you retain your best talent.
For more tips on managing your business, check out our Growth Library.