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Jessica Darnbrough
The lack of lenders paying first year trail is putting off potential new recruits from joining the industry.
According to a recent straw poll conducted by The Adviser, 78.1 per cent of brokers believe potential new recruits will not want to join the industry because of the lack of income they would receive in their first year of operation.
Of the 297 respondents, just 21.9 per cent said the lack of first year trail would not “put off” new recruits.
At present, only a handful of lenders pay their broker partners trail in the first year.
In December last year, Suncorp Bank announced it would start paying brokers 0.15 per cent trailing commission in the first year.
Speaking at the time about Suncorp Bank’s decision to re-introduce first year trail, the lender’s general manager intermediaries Steven Heavey said the bank was committed to simplifying its commission structure and enhancing its broker proposition.
“Brokers are a core part of our lending strategy and we want to make it easier for them to do business with us by removing some of the barriers and complexities they may have experienced in the past. We also understand that under NCCP brokers are paying more money upfront, this helps them with that burden,” he said.
Speaking to The Adviser about the results of the straw poll, Ballast chief executive officer Frank Paratore said while he could understand how the lack of first year trail may deter potential new recruits from joining the industry, he argued those that are passionate about making mortgage broking their career would not be “put off”.
“Mortgage broking is a career and anyone who is serious about making a go of their profession would not be worried about making money in their first year of operation,” he said.
“While I understand it is often tough for new recruits coming into the industry to make ends meet, people entering the profession should come with a substantial amount of cash flow behind them.
“Mortgage broking is a long term career choice, it is not a job to earn a quick buck. Those entering the industry have to be prepared to not earn any money for the first three to four months.”
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