Career as a Mortgage Advisor - a good idea???

andy777_2

I am slowly coming around the idea of retraining as a Mortgage Advisor and would really appreciate some advice from the knowledgeable people on here.

I have no worries about passing the CEMAP exams and I am also comfortable explaining things to people. I also like to think that I relate well to people, and vice-versa.

My plan would be to spend sufficient time working for an advisory firm before striking out on my own. As I have family and other financial commitments, the amount of money I can earn is of some importance to me. A number of job ads claim that earnings of £100k plus per annum is possible. Obviously earning a salary of this size would require a pretty special level of ability but what I'd like to know is whether such salaries are really possible or is it simply sales hyperbole? Can self-employed advisors really earn that much money???

Thanks!

TEDDYRUKSPIN

Nah, 100k is really taking the biscuit for just an independent mortgage advisor. Most of them are on commission from a selected number of banks and building societies. In true reality, they are not even truely fully independent as the portfolio of banks and building societies they can recommend is far fewer than you think. Most recommend which company gives them the better commission.

It will really depend on you! Do you charge or do you receive money from the banks and building society for the referral.

True figure on average is actually around 16k to max 23k. Anyone above this are actually selling alot of insurance related and pensions etc.

dunstonh

Earnings in excess of 100k is easy for an established IFA but the average IFA earnings are £58,000. I dont know what the mortgage adviser averages are but I would have to guess that they are lower than IFAs. So, adverts claiming you will earn 100k on mortgage only classification are probably as honest as most CVs.

In this area, I wouldnt put many mortgage advisers above 20k but then we have below national average house prices, which means smaller mortgages, which means less income. On that basis, I suppose it would be easy for London mortgage advisers to perhaps earn closer to 100k after all.

My plan would be to spend sufficient time working for an advisory firm before striking out on my own.

If you work with an small firm, expect to have a claus in there preventing you from contacting any of your clients you saw whilst with them if you leave. Banks etc have the same but they dont tend to enforce it and usually the replacements at banks dont get passed your own records and knowledge.

Look at house prices where you are and consider the size of the mortgages. Then factor the commission at 0.3% of the amount lent. Then see how much you would have to lend to earn the amount you require. You would also need to factor in costs into that.

True figure on average is actually around 16k to max 23k. Anyone above this are actually selling alot of insurance related and pensions etc.

Mortgage advisers cannot recommend or sell investment class business.

UK007BullDog

Passing Cemap is not the only thing you have to consider. Once you have passed those, you are ALWAYS having to keep on training. You never stop training as your firm or network would want you to be on the top of the business.

There is a very high learning curve after CeMAP. New Software, the products, lenders criterias, associated insurances. How to deal with each lender, how to be compliant, CPD.....

A friend of mine went straight after passing CeMAP self employed only to find out that he could not answer basic questions clients were asking. I did advise him to go and work for an independent brokerage for a couple of years to get trained, to get the "knowledge" and build up a client bank which will support him when he goes self employed. After nearly 1 year of struggling he is now working for an IFA and is learning the ropes.

London Brokers or those in major cities can earn quite a bit. Someone I know earns self employed on average £4k - £6K per month. Lets say £60K per year. But he is only doing sub prime cases as the commission is a lot higher and he charges high fees.

Going self employed without a client bank of at least 200 people is total madness. You need money to advertise plus run your home office where the most expensive cost would be telephone and paper/ink. You would need broadband access etc. Due to the nature of the business you only get paid once the mortgage has completed, so you could wait many months for your money.

Here in London the average pay is around £16K - £25K for a trainee, you then get paid a commission of around 10% from the lenders commission.

If you work for the big companies and have 1 to 2 years experience your basic could go up to £35K.

Those who are not good at selling to clients tend to go sideways and become BDM's (Business Development managers) for the lenders or insurance companies. They can get up to £50K plus a car and commissions. But they are on the road every day visiting brokers.

There is a shortage of Advisers and the recruitment agents are all poaching from the same pond. They place an candidate with one firm only to call back in 6 months to 1 year to place elsewhere. I am getting 2 calls a week and they are very persistent.

You would definitely have to think that you are going for a profession where you will have lifelong learning imposed on you due to regulation, otherwise you would not be fit and proper to give advice.

I was working in 2 other industries before becoming a broker and I absolutely love my job. I wish I had found this for me many years ago. I will always be a broker, no matter what (at least I hope so).

Another thing is that you have to be financially yourself (and for some companies your partner) completely lillywhite and spotless. No CCJ's, no defaults, no arrears, not in deep debt with loans and credit cards, no criminal record. You have to lay open your whole history of the last 10 years.

If you have any other questions just PM me.

HTH

homer_j_3

TEDDYRUKSPIN wrote:

Nah, 100k is really taking the biscuit for just an independent mortgage advisor. Most of them are on commission from a selected number of banks and building societies. In true reality, they are not even truely fully independent as the portfolio of banks and building societies they can recommend is far fewer than you think. Most recommend which company gives them the better commission.

It will really depend on you! Do you charge or do you receive money from the banks and building society for the referral.

True figure on average is actually around 16k to max 23k. Anyone above this are actually selling alot of insurance related and pensions etc.

I think what you are trying to say is that 100k is unrealistic if you do not charge a fee for your advice and that as you now have to give the most suitable advice, commission paid is not a consideration to you as a broker so you cannot place with a lender on the basis of this.

You have 3 levels of service that you can provide and your pay will depend on this also. If you work for a bank or building society, you will get a good grounding but you will not earn mega bucks as you are paid dismally and limited usually to one product provider. The second level is where you work from a number of banks and building societies, this can be 4 or 5 or 20 or 30 - your scope here becomes a little better and you can pick up roles that will offer you better pay than banks, however, it can be a harder game to pick up due to the different ways that different lenders work. Finally you can be whole of market and they have access to all lenders on the market that will accept business from brokers. You do not have access to some lenders so the whole of market is misleading. This however can give you full flexibility in who you work with and the products you can choose.

To earn 100k, you need to be writing a volume of business, and you have to consider that 99% of brokers do not earn this due to the fact that people can get the same advice for free. If you are to earn this kind of money then you will need to charge a fee and sell a lot of insurances along side it. As a pure mortgage broker, you cannot sell pensions.

I would expect a 50k salary after doing your quals and having a few years under your belt in the job. Not mega bucks but a helthy reward for your efforts if you work hard!

HelpWhereIcan

The pay gap between a mortgage broker and an IFA is closing. There is a shortage of decent advisers in the industry and average basic salaries for experienced mortgage advisers have gone from around £16000 to £20000-£25000 over the last 4 years.

Outside of London this puts them on a par with most IFAs as far as basic salaries/packages go. The difference is in commission earnings and this will vary from firm to firm. I can only give you examples based on firms I know of, but think it illustrates things quite well.

The first one is an IFA firm where the mortgage adviser is very much seen as a second class citizen by the IFAs and the commission package offered by the partners reflects that. The mortgage adviser is only able to do the home insurance and mortgage payment protection and has to pass all her clients over to one of the IFAs for Life & Critical illness etc. She gets a 'full share' of the mortgage and insurance business, but only gets a '25% share' of whatever life business the IFA sells (if they can be bothered to see her client); and this is even though she used to do life business at the bank she worked for and has the neccessary exams. THe partners also do not give much thought to other income streams they could provide her with and will only suggest to her that she charge a fee and they will let her have half of any fee 'she can get away with' - how much does that say for the IFA firm's commitment to mortgages as part of their business? This means that, although she does OK, she earns significantly less than the IFAs in the same firm.

The second one is also an IFA firm, but one that has more mortgage advisers than investment advisers. It is actually the last firm I worked for before going by myself. Every mortgage adviser can do whichever business they are qualified/authorised for. This means that they have a higher average case size for the mortgage adviser than the frst firm and earnings there are on a par with the IFAs. In fact the highest earner in the firm for the last few years has been a mortgage adviser.

I would reckon average overall earnings to be £35000 in most firms. £100k is possible, but mainly as a practice principal or partner with other advisers working for you.

There are firms that advertise £100k from the off, most of them are not realistic and of those that are, they will be right to buy/sub prime brokers that charge a fee of approx £3000, add payment protection as a lump sum to the mortgage (premium £5000; commission £3000). They have high pressure sales environments and there is quite a high incidence of burnout. I have known a broker who worked for one and he loved it, but he was in the minority as most of those I have met tend to leave after about a year (if they are not kicked out for underperformance first) There is also some debate about how long these firms will be around.

Do not come into the industry expecting £100k as an average. £50k for an experienced adviser 'doing well' is, as homer suggests, a bit more like it. Some earn significantly more, but I also know one who earns around £12k.

Do not forget that CeMap is only the basic qualification and you will need to take others if you plan to arrange protection business or extend into the investment side of things.

MARVIN_2

Hello guys
I am new in this chat the same as in mortgage industry.
Having passed CeMAP 2 I have been offered a job as Mortgage Manager, but several things look suspicious from my point of view.

First of all
Why they want me to apply for approval from the FSA, having two other advisors in the company which have CeMAP qualification but not registered at all (as I have already checked FSA register)?
Secondly. Is it really obligation for an advisor to be approved person or it is only related to controlling/governing functions in the business?
What is exactly mean mortgage manager? Is it the same as mortgage advisor, as I have told them several times that I am looking only for trainee mortgage advisor position?

The money, most important question, 18 K gross this amount including overtimes and Saturdays. No commission basis.

Thanks for your attention to my questions.

arkie

Marvin
unfortunatley due to FSA requirements, the FSA (or your network) have to look into your background /credit history etc
I back up 100% what Bulldog says, I know an ex mortgage adviser who got a CCJ when in the job, didnt notify the right people , you have to, came to his annual credit check and was siuspended from the firm we worked for , now selling gas !!!!!
earnings of 100k working for these companies is a load of tosh, I know Ive been sold that story before and believed it. If you work for yourself (like me) aim to complete one mortgage per week and try to earn £1500 per mortgage over 52 weeks thats 78k.. how you get that 1500 is the hard part, do you charge a fee (i do) do you sell insurance? and then you have find the clients , and finally YOU ARE RESPONSIBLE FOR THE ADVICE GIVEN for a long time and if the goalposts change you could be sued (PI Cover Required)
Good luck

arkie

Marvin
unfortunatley due to FSA requirements, the FSA (or your network) have to look into your background /credit history etc
I back up 100% what Bulldog says, I know an ex mortgage adviser who got a CCJ when in the job, didnt notify the right people , you have to, came to his annual credit check and was siuspended from the firm we worked for , now selling gas !!!!!
earnings of 100k working for these companies is a load of tosh, I know Ive been sold that story before and believed it. If you work for yourself (like me) aim to complete one mortgage per week and try to earn £1500 per mortgage over 52 weeks thats 78k.. how you get that 1500 is the hard part, do you charge a fee (i do) do you sell insurance? and then you have find the clients , and finally YOU ARE RESPONSIBLE FOR THE ADVICE GIVEN for a long time and if the goalposts change you could be sued (PI Cover Required)
Good luck

MARVIN_2

arkie wrote:

Marvin
unfortunatley due to FSA requirements, the FSA (or your network) have to look into your background /credit history etc
I back up 100% what Bulldog says, I know an ex mortgage adviser who got a CCJ when in the job, didnt notify the right people , you have to, came to his annual credit check and was siuspended from the firm we worked for , now selling gas !!!!!

Thank you for information. But I still do not understand why they want me to be approved if they have 2 or 3 advisors working without any approval? And is it really necessary to apply for such approval or it is depends of particular role (advice given) of mortgage advisor?
Cheers.

L-Jay

I worked as a Mortgage Advisor for a high street bank for 5 years, CeMap qualified etc. I gave it up because I just felt uncomfortable being forced to sell extra products to clients they didn't need/weren't suitable/could get much cheaper elsewhere. To me it was just a cut-throat business that I morally couldn't be part of. Yes, you can earn mega-bucks but the price to me was just too high.