Is this a bad time to think about becoming a Mortgage Broker?

LittleYoda

Hi there

I am thinking about changing career and considering becoming a whole of market mortgage broker.

With the economic turbulence in the american economy at the moment, specifically the large number of defaulting US mortgages, and the panicked money markets that have reportedly seized up in panic over exposure to credit derivatives, is this a bad time to be moving into the UK mortgage sector?

Appreciate that this is all happening in America, but there is potentially a knock on effect globally, and with interest rates set for likely increases here, as has happened in the US, will there be less credit made available by the financial instutions?

With less money going round, and possibly less mortgages being transacted, is this a wise career move?

Or on the other hand is this an excellent time to be getting into the industry as people will have an even bigger need to be getting the very best deal on their mortgage, and the necessity for a mortgage broker will be even greater?

Any advice or comments gratefully received.

Thanks

LittleYoda

dunstonh

With less money going round, and possibly less mortgages being transacted, is this a wise career move?

Over half of new advisers leave within two years having failed and that is in a period when mortgage business has been good.

In the scheme of things, an individual can only do so much business and good advisers with a good business model will see business come in regardless of the economic situation. Those with poor business models will suffer.

Or on the other hand is this an excellent time to be getting into the industry as people will have an even bigger need to be getting the very best deal on their mortgage, and the necessity for a mortgage broker will be even greater?

I think the biggest risk to new advisers is the FSA's RDR which will see probably see a mass exodus of IFAs giving up full authorisation to become mortgage advisers.

LittleYoda

Thanks - Dunstonh and Joe

A good business model is the key then - together with quality leads, hard work, skill, and tenacity.

Has anybody any more comments - surely with all the professional financial experience on here, there must be some more opinion.

Particulary with reference to the FSA's plans for IFAs. This could be a real killer for mortgage broker wannabe's such as myself...........

Anbody????????

Cheers
LittleYoda

toonfish

LittleYoda wrote: »

Thanks - Dunstonh and Joe

A good business model is the key then - together with quality leads, hard work, skill, and tenacity.

Has anybody any more comments - surely with all the professional financial experience on here, there must be some more opinion.

Particulary with reference to the FSA's plans for IFAs. This could be a real killer for mortgage broker wannabe's such as myself...........

Anbody????????

Cheers
LittleYoda

that's the key to it all, a muppet can write enough business to make a living with decent leads. That and just being honest with people.

You need to decide how you want to work, we much prefer face to face rather than the somewhat soulless internet/telephone although we still obviously use those routes.

homer_j_3

I feel like a broken record on this subject, maybe we should ask Martin to create a sticky on the subject and get Joek to sponsor it with his training company and all the other bits he can do to help new brokers.

1 - If you enjoy hard work, people and have a can do attitude then becoming a mortgage adviser could be a good career choice.

2 - Passing your exams are the very first small steps in what can be a very steep hill climb of building knowlegde, competence and understanding

3 - Without any industry experience or previous advising experience, the safest and most productive way into the industry is to learn and make your mistakes in a bank/building society or estate agency as you often have a captive audience and will have someone to help you learn and ensure you do the job to the right standards. You build up to whole of market from here.

4 - You will need to have good organisation and admin skills as this forms a big part to your role.

5- Earnings in the industry vary from adviser to adviser, good ones often earn very well, poor ones often find that the "sales" environment is just too much and that because so much can be expected from you in a very short period of time, it is not easy.

Anyway, I would really consider what you are doing and if you feel that the job is something for you then come and join the party and see for yourself - just watch out for unscrupolous jobs offering you riches beyond your wildest dreams....

MortgageMamma

I am one of the lucky ones who did a hop skip and a jump over the banks, estate agencies and normal feeding grounds of trainee advisers and I immediately went whole of market and self employed. I was skint for a year until I built up a decent client base and started getting referrals in. I was fortunate enough to have the help of some other advisers, and a background in financial services before I concentrated in on mortgages. The one thing you need in this job is bull-like persistence. There will be times when things dont go your way but as long as you dont give up and you keep pushing your way to success you will eventually get there.

Don't push your clients though, be fair, ALWAYS do whats best for THEM not you, be honest, even if the truth is not what the client wants to hear, if you are unsure - ask someone - mortgages are a lot more complex than you could imagine and all advisers with all levels of experience learn new things all the time. Never think you know it all. Everyone hates a know it all.

I'm waffling now but good luck, if you think its the right job for you and you think you can cut it, then go for it, but no half measures or you'll will be queing for your jobseekers allowance within six months. This is no 9-5 job, you will work every hour god sends until you are established.

MM x

terese

I have absolutely no faith in brokers so I tend to do my business by myself.

MortgageMamma

terese wrote: »

I have absolutely no faith in brokers so I tend to do my business by myself.

Thats not quite what this thread is about. There are always people who don't like using brokers, but the majority of people have very positive experiences of using a broker, hence the fact there are so many of us and our expertise is widely sought after

luckyfool

terese wrote: »

I have absolutely no faith in brokers so I tend to do my business by myself.

What's your point?

RabbitMad

I've often thought about this myself - but then remember I'm not a people person. How can I be expected to put up with numpties all day and not go postal?

One piece of advice is be organised. There are lots of people who are happy to do it themselves but will let a broker / adviser do it if it is easier for them. I am one of these people.

As an example: When I bought my last home I saw an estate agent's adviser. I turned up she was completely un prepared even though I had given her all the info she needed over the phone when I agreed to see her. Therefore it took her ages to produce all the quotes etc. She said she would call to discuss the mortgage once I'd had time to look over the quotes. She never did and then Nationwide pulled the rate I was looking for. At this point here I went down the DIY route, only for her to call a couple of days later. If she had phone to let me know Nationwide were pulling their deal (advisors get a couple of days notice usually) she'd have had a guaranteed sale.

if you do go for it - good luck.

dunstonh

Has anybody any more comments - surely with all the professional financial experience on here, there must be some more opinion.

Particulary with reference to the FSA's plans for IFAs. This could be a real killer for mortgage broker wannabe's such as myself...........

In short, the RDR (retail distribution review) affects all investment class advisers. The FSA has proposed getting rid of IFAs, tied agents and multi-tie and replacing it initially with 3 levels of classification then reducing to two.

The basic level will be at the current standard and will only operate a simple advice process with limited product range, no real advice (flow chart style) and limited FOS protection. This will suit the tied agent salesforces that exist now as it will reduce costs, improve profits and reduce complaints (as the consumer wont be able to complain).

The general/middle level of advice is temporary to allow a timescale for advisers to choose their direction. It will require AFPC or certified advisers (although some places indicate this will not be required to begin with). You will not be able to use the term IFA even if you are whole of market. Around 90% of current IFAs fall under the classification.

The top level with be professional and will require chartered status. Thats a lot of exams. Its about 10 more then the CF1-5 or FPC1-3.

So, current advisers are going to have to decide whether they go professional and sit the 10 more exams to degree level and become fee only or decide to move to basic adviser status and work salesforce style with only around 5-10 products.

Many close to retirement are expected to sit on general advice until it is removed then retire. However, it has been estimated that around 70% of current IFAs do mostly mortgage advice and would already be better off dropping investment authorisation (investment authorisation is damned more expensive than mortgage) let alone when the new rules come in. So, it is expected that very many IFAs will move into the mortgage market by joining other firms so they still continue to be paid their legacy renewals but become mortgage advisers for ongoing business.

The problem for new mortgage advisers is going to be recruitment. Is a firm going to want to take on a newbie or someone with a client bank, renewals (which they take a cut from) and a proven record?

The RDR is in early consultation and has a number of flaws at present. It isn't expected to come into force until 2009 and will look different to current proposals. At this stage, it is considered a shot across the bows to give advance warning of upheaval. i.e. you have 2 years to get at least certified status if you are an IFA.