Becoming a Mortgage Adviser

dunstonh

Why are fully qualified IFA's dropping their authorisations to concentrate on Mortgages and Protection?

minimum qualification levels are being increased from the end of 2012. This applies to new recruits and existing IFAs. The average age of IFAs is in the 50s. So, to ask some to pay many thousands of pounds to sit 6 more exams when you are only a few years aware from retirement is off-putting to many. Plus, the increased exam levels are also doing what they are designed to do in getting rid of the lower end of skills. It doesnt mean those were bad advisers. Many had years of experience and have never put a foot wrong. However, their knowledge may not be as strong as it should be. I know some advisers are part time. Including one whose main job is a builder. He will be examed and priced out. You could argue very easily that it a good thing.

I thought there was more money in pensions and investments.

Barclays pulled out of advice a few weeks back as they could no longer see it as profitable. The earnings potential is not what it used to be. A compliant adviser with good client bank or ability to get footfall should be fine. A new recruit is going to find it very hard. Going forward you will need volume and you will need to dump the small cases. There are a large number of firms getting IFAs dropping to mortgage/insurance and joining firms where there is a post RDR compliant IFA on board as the costs will reduce this way. This is good for the IFA that will stay post RDR as they will get the volume and its good for the ex IFA as they get to continue servicing the client albeit no longer giving advice in areas outside of their licence. They will become a bit like the old insurance company agent who had the relationship and did the insurance/mortgages but referred the higher level stuff on to another person.

ryan86uk

Conrad wrote: »

I just wanted to point out Ryan that above all it's a sales role. Think of that BBC TV show, 'The Apprentice'. You need to be the sort of person that can self generate business, network etc. This is the reason the failure rate is so high compared to other sectors. A lot people come into saying idealistic things like 'if I give great service and advice, that will see me through', but it isn't that simple.

A good broker is a latteral thinker. Anyone can arrange a simple mortgage, but thats not why people need a broker. Good brokers are the ones that can take a complex scenario and find a solution for the client, and to be frank this skill cannot be learned, it's something you are born with.

EXAMPLE > New potential client came to me - Dad, Mum and 2 adult sons. Dad had tried to remo his house with Abbey and been declined despite being a low loan to value, and the whole family jointly owning £4m worth of propertincluding shops and houses.
Dad was 73. Money was to buy a freehold commercial property.
Most resi lenders wont allow borroing on a resi property if funds are for business use.
Buy to let was not an option on this one. The commercial properties were HMO's meaning most lenders wont lend on them.

Anyway, it's way more complex than I can describe here but it earned me a lot of money but was a very rocky and unpredictable ride. Now other brokers had told these people it was an impossible deal to do. A case like this I will just sit and look at for days on paper to find a LEGAL way of solving. This is what you need to do if you want to make a high income.



Even through the recssion it is possible to make £150k pa personal income, but plenty make far, far less.

You need to be very hungry - not the sort of person who deals with things in a slow manner, not the sort who loves going to industry meetings. I know a broker who is not very effective because he does things like 'gets around' to a DIP 4 days after the client enquired, because he is seeing other clients and going to poxy breakfast meetings. A good broker would be onto that client in a flash no matter what, and get that DIP done within the hour.

You need to be very diplomatic too. No good telling a client 'the lender turned you down' as this will make them panic and find another way forward online. Instead you would say 'the current lender is looking a little shakey but I have lined up an alternative that looks very promosing'. It's not about lying, but just being careful with language. A bit like a school teacher maybe wanting to tell the parent thier kid is awful but instead prefacing any negative feedback with a positive first.

Make no mistake the stress is immense - forever living on your nerves as you try and mentally deal with the fact 5 cases may be about to be declined after months of stress for you and the clients.

Also the insurance side is stresful - you will do tons of work on a mortgage and life policy only for the cleint to cancel it and you suffer a commsion claw back. Aagin if you are canny there are ways of avoiding this - for example 'I can solve your lending scenario but it will cost 'x' , but this can be discounted if you take and keep a life and critical illness policy'. To ensure they maintain the policy and keep to thier promise you have them sign a 4 year tie in - not many brokers know of these though. If you are part of a network it is often imposible to use such tools.

This is not an industry I would encourage my kids to join one day. Far far better sectors to wrok in. Honestly, so many old timers in this business end up with cancer and heart problems. I'm sure it's the stress.

Apart from that it's great,,,,,,,,,:rotfl:

Oh hell, I really don't know where to start for a reply! Many thanks indeed for the long and informative reply.

I do have a few questions though, if you don't mind. How does a mortgage broker / independent mortgage adviser make a profit? Is it commission based (if so, how does that work) or is it simply charging a client for searching and finding a suitable mortgage?

Where/How would someone like myself start in terms of getting to the mortgage adviser level? Obviously CeMAP would be a good start but say I got that.... where does one start?

Thanks in advance.

rgds

Ryan

betmunch

Thanks for that Dunston.

Ryan,
With regards to starting out, I would suggest joining a Bank, or one of the big EA chains. (Countrywide or Connells) they will train you up, get your through your exams and give you industry experience. Once you have done a couple of years with them and been declared competent you will be a much more attractive prospect for a network so you can go self employed and do things your way.
It wont be pleasant (IMO) with all the targets, Sales Managers blatently trying to get you to mis-sell, suspicious clients as your work in the EA, etc. But think of it as paying your dues, and keep your long term goal of working for yourself in mind and you will do OK.

Hope this helps