Getting new blood into the mortgage industry was never going to be easy. Let’s face it – it’s not exactly glamorous and while salespeople in general do not enjoy the best reputations, those selling financial services are often slated the most. For graduates it is a less obvious route than traditional careers such as banking, accountancy and law, and financial services is probably not commonly associated with high salaries and great perks.
So getting new blood into the industry has been a hot topic of conversation lately and although most critics agree that something needs to be done, opinion has been split on what exactly should be done and who – firms themselves or an industry body – should lead such an initiative.
A defined decision
Going back a few years, it was not unusual for independent financial advisers (IFAs) and mortgage advisers to land in a financial services career almost by chance, attracted by the prospect of challenging and rewarding work. But things have changed over the years and gradually more people make a defining decision to work in financial services. These new recruits need to be properly trained and developed in order to be retained.
Association of Mortgage Intermediaries (AMI) director, Rob Griffiths, says we need to work together as an industry to ensure the benefits of becoming a mortgage adviser are transmitted to graduates and anyone interested in working in financial services. He adds that AMI is keen to work with the industry and the professional bodies to facilitate better understanding of the jobs on offer and the career path available.
“Firms are telling us that there is an opportunity for an industry push for new advisers to enter the industry and we are happy to support such a move,” he says.
The issue of recruitment is indeed a problem recognised by the entire mortgage industry. Adviser Linear Mortgage Network, together with its network principal Openwork, is running a campaign to encourage new blood to enter the industry.
Openwork mortgage development director, Steve Baker, says: “As an industry we need to build our profile and re-establish our reputation if we are to attract the right people. We need to establish a pedigree in terms of training and development to ensure recruits fulfil their potential and ultimately stay within the industry as productive advisers.
“An industry wide induction and training programme would be one way to improve the profile and image of the role of advisers, so that they can be seen in the same light as other professionals.”
At the moment there are two main options for someone wanting to work in the mortgage industry as a broker. They can either approach an existing firm with no qualifications and receive on-the-job training, or they can take the basic Certificate in Mortgage Advice and Practice (CeMAP) qualification and approach a firm.
“Some firms only take those who already have their mortgage or general insurance (GI) qualifications, and they will obviously pay more for a qualified adviser. Others will take individuals who do not have the qualifications and work with them to gain the necessary standards,” says Griffiths. “A number of intermediary firms, for example, run academy-style operations taking new employees through their exams while also offering them on-the-job training.”
Broker academy
Openwork is one firm that offers a structured academy-style scheme. It has an extensive recruitment and training programme which is tailored to suit the needs of individual recruits, whether they be inexperienced new entrants to the industry or old hands. Openwork recruits advisers directly but it also supports its franchises and advisers in recruiting and growing their individual business.
Once someone joins Openwork, they start a tailored training and development process. The Openwork training model called ‘Flying Start’ combines a centralised approach to learning, with the resource of a large and experienced field force to provide mentoring and support for new recruits. This leads on to a programme of continuous professional development (CPD) that helps advisers keep abreast of industry and regulatory requirements, as well as offering support, advice and training on growing their businesses.
The primary qualification for mortgage brokers is CeMAP which is in three parts and normally takes about eight weeks to complete.
“We often see new entrants take the initial CeMAP qualification before applying for jobs as it demonstrates a level of commitment and it means they have already passed the first hurdle,” says Baker.
Once an adviser has passed all their exams (CeMAP one, two and three) and has gained substantial product and sales process knowledge, there are a number of options open to them. Baker says: “Many decide to set up their own business, others further build their knowledge by branching out into full financial advice and wealth management. Ultimately as an adviser, mortgage or otherwise, you should be looking to initially build a client bank and if you want to branch out on your own you need to learn the skills to build a business.”
Graduates
London & Country is one of the largest employers in Bath and takes on new recruits by targeting graduates. “We have a good relationship with local universities and make graduates aware of what we do, what the job involves and what opportunities are available,” says mortgage specialist, James Cotton. “For us, the CeMAP qualification is not a pre-requisite – new recruits receive training before taking the exam. There is then an on-going program of professional development to improve skills and knowledge.”
Once an adviser is fully trained and has some experience behind them, there is a fair amount of moving around going on. Word on the street is that with the numbers of intermediaries currently at something of a plateau, there is a large degree of
competition between firms who are looking for qualified advisers. Being headhunted can be a common experience if you are a broker with a good track record.
Melanie Bien, associate director at broker Savills Private Finance, says: “Finding new brokers of a good enough calibre continues to be a problem for intermediary firms. Companies which continue to expand at a pace, such as Savills Private Finance, can find it difficult to unearth enough quality brokers to grow the business.
“As it becomes harder to find experienced, fully fledged brokers, an increasing number of brokerages are recruiting graduates instead. Although they require more training and hand-holding than someone who has years of experience behind them, they won’t be set in their ways and have bad habits that need breaking.”
Something that has helped many new entrants to the industry to gain a clearer picture of their preferred career path is the fact that degree-level courses in financial services are provided at various colleges and universities. The courses turn out academically qualified individuals with broad financial services knowledge. But whether these graduates are ready to deal with clients face-to-face is a different matter.
Career path options
Once someone is qualified and has gained some experience, their career path can take any number of directions and is different for each and every broker. Some decide that the best option is to be self-employed and strike out on their own as soon as possible, while others opt for the security of a medium or larger firm. “We find that mortgage intermediaries tend to be entrepreneurial in nature which often means they have an urge to set up on their own. This can be seen by the sheer number of one or two-man bands in the industry at present,” says Griffiths.
If you join a firm, your career path can vary depending on the size and set-up of the firm you work for. “A large company has more opportunities for moving up the ladder than a smaller one, with opportunities not only to enhance personal wealth but also to educate others, through becoming a supervisor,” says Bien. “Bigger firms are also more likely to expand and open other offices, and heading up a new office is another good way of gaining experience and responsibility.”
CPD is a worthwhile programme for brokers. This provides evidence that the broker is still competent and encourages the development of new skills. This requires a minimum of 50 hours of knowledge up-dating a year.
Mark Roberts, head of financial regulation at the ifs School of Finance, reckons a mortgage adviser’s career can be very good. Mortgage brokers are typically well paid and there are many opportunities to increase earning potential and widen their knowledge. “For example, through the Advanced CeMAP, a qualification available to those who have already passed CEMAP and wish to expand their technical knowledge and skills,” he says. “This includes becoming a broker specialising in commercial mortgages, lifetime mortgages, or in Alternative Residential Lending. The opportunities are varied and for those wanting to differentiate themselves from the crowd taking the Advanced certificate is a good way of doing so.”
John Charcol has a clear career path laid out for its salespeople. It often recruits salespeople from other industries and trains them to take their CeMAP exams. From there, most brokers start off on John Charcol’s telephone-based service Charcol Direct where they have a mentor or buddy to help them, as well as a script they can use as much or as little as they like. Next, intermediaries move into face-to-face sales and once they have built up a good reputation and client base can move to John Charcol Associates and potentially earn more money by effectively becoming self-employed.
Financial education
Whether there is enough financial education in schools and whether school-leavers and graduates are told enough about careers in financial services is another issue regularly up for discussion.
Larger individual firms have always been good at targeting graduates through the university milk rounds but it is unlikely that the intermediary sector as a whole has the resource or funding to do something similar, at least not on a similar scale.
Griffiths says it is important that the industry does target both school and university leavers and offer them full information on the sector and the possible career options. There is now a greater stress on financial education in schools and this should hopefully work its way through into more people seeing the benefits of a career in financial services.
“At the moment there is probably not enough financial education in schools. But there are plans in place at a governmental and Financial Services Authority (FSA) level to ramp up the level of financial education the UK’s children receive,” he says. “Part of the FSA’s financial capability work is aimed at improving the financial knowledge of our school children. The reasoning being that the next generation’s improved financial knowledge will be mean better informed consumers, which should see less chance of mis-selling, complaints, etc. A better informed consumer means a better informed purchase of financial products.”
The ifs School of Finance remains the only organisation offering a formal financial capability qualification in schools and colleges in England and Wales and has been offering qualification such as MAQ and CeMAP for four years. There are now over 100 schools and further education colleges offering the Foundation and Intermediate Certificates in Personal Finance (GCSE equivalent) certificate (AS-level equivalent) or diploma (A-level equivalent) in financial studies and the numbers are increasing significantly year on year.
“Independent research being conducted by the University of Manchester has shown that qualifications such as these have a real impact on financial behaviour – positively altering the way in which individuals spend and save money. So we would naturally support more schools and colleges making these qualifications available to their students,” says Phil Hall, a spokesman for the ifs School of Finance.
There has been talk of foundation degrees for financial services, which, if done properly, could raise the profile and respectability of the profession. The advantage of such degrees would be employer input, working with the colleges and government, which would ensure that employers’ needs are recognised. At the moment, many people stumble into financial services and mortgage broking in a haphazard way. What the industry needs is a more structured career path in place if it wants to attract and retain top quality people.
