Mortagge Broker - Career Advice Needed

scoops82

Hi All


I have asked a couple of questions on this before but I could do with some kind of clarity before making any decision.


I am currently in a job that pays £27-28k max. I am in my first year of CIMA ( accountancy ) but I really do not enjoy my job or the course and therefore I am thinking of becoming a Mortgage Advisor/Broker.


I could do with an indication of my salary expectations once I have got the Cemap qualification. I see adverts for jobs between £15-25k plus commission. I'm not asking what you guys earn - just what a realistic level of expectation would be - I'm based in the Warwickshire in case that make s a difference.


I wont base my decision solely on as I think I need to be happier in my work and I have a interest in mortgages and the property market this but I can't afford a big drop in salary.


Thanks

betmunch

It depends on who you work for I guess.


Corporate EA - I estimate £18K plus commission


Bank - probably a bit higher than an EA


Self employed - whatever you make it, but very low in the early months. Also, difficult to go Self Employed as your first position


Personally if I was starting a fresh with the knowledge I had now I would take an EA role and leave as soon as I was outside of any tie-in with them and had Competent Advisor Status. I would think this would be a year after completing any guaranteed commission period.

dunstonh

I could do with an indication of my salary expectations once I have got the Cemap qualification. I see adverts for jobs between £15-25k plus commission. I'm not asking what you guys earn - just what a realistic level of expectation would be - I'm based in the Warwickshire in case that make s a difference.

£0k to over £100k+ would be a fair range of what is possible.

The established advisers, particularly those working with IFAs, will tend to earn more because of time, history and reputation and the availability of clients. New advisers will typically earn less and take years to build on it.

Availability of clients is the single most important thing. Over half of new advisers to the industry leave within 2 years. Often in debt. If you have no clients, then you have no income. If you only have 10 clients then that is a couple of months income. What after that?

I concur with betmuch on the different types. The EA and bank roles will be sales roles. However, they are the starting point that many of the successful advisers started out from.

scoops82

Thanks for your replies - a couple more questions.


-how much commission is someone likely to earn in a year - I'm a bit scared of changing career at 33 and on a salary of £27-8k which is only likely to go up with inflation or further CIMA studies. I know its not the best but its enough for me and my partner.
- how do you go about building up a client base?
-I'm assuming this is not something I can do on the side while doing my full-time job as well (or go part time in both until more clients have been sourced?)
-How do people become in debt from its or do you mean not earning enough to cover bills at home?


Thanks
S

dunstonh

-how much commission is someone likely to earn in a year - I'm a bit scared of changing career at 33 and on a salary of £27-8k which is only likely to go up with inflation or further CIMA studies. I know its not the best but its enough for me and my partner.

If self employed or self employed but attached to a firm then its 100% commission. Most firms will not pay you if you do not earn.

Some will pay a salary but will typically base it on commission earnings (i.e. smoothed but potential to go up and down). Those on salary only will earn a pittance. Most of those will be in the £15k range. To get more than that you would need to be on the IFA side.

- how do you go about building up a client base?

Not easily when you are new. You cant cold call or door knock. So, you either need a shop front or be attached to an IFA realistically nowadays.

-I'm assuming this is not something I can do on the side while doing my full-time job as well (or go part time in both until more clients have been sourced?)

no chance. Those days are long gone.

-How do people become in debt from its or do you mean not earning enough to cover bills at home?

Not having enough to cover expenditure is one way. However, it is possible to end up with a financial debt if you do not arrange enough mortgages to cover the business costs. Some firms will take £X pm from you to cover their regulatory and admin costs of you being attached to them.

betmunch

When I left Countrywide I believe the commission was stepped, starting at 5% of exchanged income (proc fees, broker fees, and life commission) then after a while it goes to 10%, then 12%, 14%, 18% etc as you earnt the company more money. I would expect it to be a few grand extra, maybe 5ish depending on how you do.


building a client base is a very difficult, and important, part of the business. In a bank or EA they will walk into your office no problem. If you are self employed they will be stolen by the darker EA's I am advocating you joining! You need to make links with people that can provide you with referrals, IFAs that don't want to bother with mortgages ideally.


You could do it part time if you want, but you should expect to need to answer your mortgage advisor phone at any time, I cant see an employer being happy with you taking a 30 minute call in the middle of "their" working time with you, then again, is that going to happen if your only doing 2 days as a mortgage advisor?


When I went self employed my debt increased massively as I didnt prepare properly. It was so worth it though and things are much better now

scoops82

What was the debt for? I am already in debt (only to my parents who helped with me house deposit) but im not sure how much more I could cope with while also taking a pay cut - in the short term at least.


It seems fair to assume that if I can get qualified and work in a bank ill be able to earn £22k inc commission while I try and build a client base? Is that a fair assumption?

dunstonh

What was the debt for? I am already in debt (only to my parents who helped with me house deposit) but im not sure how much more I could cope with while also taking a pay cut - in the short term at least.

Debts can be for all sort of things. Levies, PI insurance. Employer contribution.

Many costs continue to come whether you earn or not. Changing status as adviser is a big change. I changed my status from partnership to limited company and network to directly authorised at the same time and apart from the £1500 FCA fees and having to put another £15k aside for solvency requirements, the cashflow fluctuations because of the change saw a £30k difference in one month. Im about £50k down at the moment (although that will be recovered by year end).

It seems fair to assume that if I can get qualified and work in a bank ill be able to earn £22k inc commission while I try and build a client base? Is that a fair assumption?

Most bank staff are not on commission. They are salaried with bonus. So, salary will likely be around £10k-15k with bonuses paid on top based on performance. Most banks are not brokers but sell their own products. you dont really build up a client base from a bank on the mortgage side as you are just another bank clerk they have to deal with. They are buying the brand, not the clerk. Financial advice is different as you build up a much more person relationship over time and the client associates with you and not the bank. You would have a period of no bonuses which could be as much as 6 months.

betmunch

My debt was from having an expensive wife, then divorcing an expensive wife!


I wouldn't be surprised if you could earn £22k in a bank, probably more, but don't think you will be able to build a client base. All your clients would belong to the bank. It will build experience and get you CAS

scoops82

Many costs continue to come whether you earn or not. Changing status as adviser is a big change. I changed my status from partnership to limited company and network to directly authorised at the same time and apart from the £1500 FCA fees and having to put another £15k aside for solvency requirements, the cashflow fluctuations because of the change saw a £30k difference in one month. Im about £50k down at the moment (although that will be recovered by year end).

I hadn't thought about any costs such as these - if I am likely to need £15k upfront in the first few years then its probably a non starter!


I might just do Cemap in my spare time and see what happens!


Thanks for all your replies though!

Most bank staff are not on commission. They are salaried with bonus. So, salary will likely be around £10k-15k with bonuses paid on top based on performance. Most banks are not brokers but sell their own products. you dont really build up a client base from a bank on the mortgage side as you are just another bank clerk they have to deal with. They are buying the brand, not the clerk. Financial advice is different as you build up a much more person relationship over time and the client associates with you and not the bank. You would have a period of no bonuses which could be as much as 6 months.[/QUOTE]

amnblog

Commission or sales targets for mortgage advisers in employed rules is a tricky area from March due to new Mortgage Credit Directive Rules


Look for : MCOB 2A.1 Remuneration: MCD regulated mortgage contracts


Don't expect packages to have commission targets and payments - level salary with some group bonus may become the norm.