‘Naysayers’ have claimed that salaries breed laziness amongst new brokers. Here's a simple way to make it work.
‘Naysayers’ have claimed that salaries breed laziness and lethargy amongst new brokers, but one business owner says there’s a simple way to make it work.
Ed Nixon, owner of Trilogy Mortgages in Sydney, pays all of his brokers on a fortnightly salary, and has done so successfully for the past five years.
The idea that brokers who earn salaries lose their drive and motivation is “rubbish”, says Nixon.
“All the naysayers jump online and complain and good luck to them, but we all work in the same office together and not one person in my team is lazy. That’s just a business owner’s cop-out; they don’t want to train people. People just don’t want to invest in other people.”
In fact, Nixon says a salary model actually encourages new brokers to build better relationships with clients and prioritise client needs.
“If you put someone on commission they’re quite needy to make the transaction work so that they can get paid. I think that’s one of the reasons why the real estate industry is the way it is, because they have to sell: You eat what you kill and if you don’t kill, you don’t eat. I’m not a big fan of that mantra.”
All of Nixon’s brokers started at Trilogy with no mortgage or banking experience, and the key to making it work involves a serious investment in training and development, says Nixon.
“Put targets in place for them to reach, help them, coach them and mentor them to reach those targets and help them through their challenges. You need to back your staff a bit and believe in them, learn to let go and delegate," he says.
"That’s a challenge a lot of brokers have, letting go. There will be mistakes and you’ll need to fix them but that’s all part of the learning process.”
Nixon trains his brokers “backwards”, starting at settlement and working back to client interviews, all while shadowing an experienced broker.
“I find that’s the best way to teach them, you seem to get a solid holding that way. First thing, learn how to close a file, then work your way back.”
Too many business owners expect new brokers to be able to get in front of clients and write loans from the outset, says Nixon.
“You’ve got to learnt to crawl before you can walk. It takes two years before you can understand how it all works and operates and then another three years for them to get a following, so that’s five years; I’ve been in lending for 22 years and I haven’t been able to find a system to speed it up yet.”
Brokers who have been with Trilogy for a number of years and are earning significant revenue are offered a salary and bonus scheme. Not once has a broker asked to be put on commission, says Nixon.
“My door’s open to have that conversation, but the problem with commission is that it ebbs and flows. With respect to their families I give them the option of a regular income and we only work regular hours: Nine to five, Monday to Friday.”
One of the key challenges of this kind of salary and training structure, says Nixon, is there is a long return on your investment as a business owner, but Nixon says the quality of brokers that result from this sort of system is well worth the effort.
“It is a big financial commitment but I’m happy with that because I know the returns are there in the future; if I look after my team they will look after me."
