It’s the same old problem throughout the professional service sector; supply and demand. We might as well face up to it, since the industry became more respectable, more professional, it’s become something of a bugbear.
I’m talking, of course, about recruitment. Not the usual day-to-day fluidity of job mobility between providers, where there’s a natural ebb and flow of staff on the look out for better pay and fewer hours. What I’m alluding to is actually getting the right sort of people to recognise that financial services – and in particular mortgage advice – is the sort of career that they want to pursue.
They might be college leavers or university graduates, looking to enter a rewarding career. Or they might be people who already have a current job or career, but who identify that ours is the industry where they see their future – a future of excellent prospects which can be theirs for the taking, provided that they are willing to put in the effort.
We all know that staff are the lifeblood of a company. Good staff are worth their weight in gold, while less committed team members can create problems for even the most professional managers. On the one hand, a dedicated team of staff members can lift an organisation beyond its position in the marketplace, but on the other could hold back a company from gaining a successful niche.
Nowhere is this more important than in customer-facing service industries such as financial services. In this market, good members of staff can provide excellent client advice, as well as that vital link between an enquiry and a sale. In other words, they have an essential role to play in converting potential leads into actual clients. And, let’s be honest, this is the reason for our being in business.
Struggling to retain
More than ever before, brokers are struggling to retain good, hardworking staff. There is little doubt that, since the advent of the Financial Services Authority (FSA) regulations, the industry is witnessing a reduction in the overall number of advisers. Regulation has had the effect of discouraging new advisers from taking their first step into the mortgage advice arena, and has caused some existing staff to re-assess their qualifications, and even move elsewhere.
With a smaller pool of qualified staff from which to draw, combined with a high ongoing demand for qualified staff, the result is that existing members of staff can reasonably move from broker to broker more or less on demand. Added to this is the fact that there are now significantly bigger numbers of agencies that specialise in financial services recruitment than before. The effect of this is that agencies are now more eager to ‘poach’ staff than they previously were, with a result that it becomes harder than ever to keep good staff.
Moreover, because there is no accepted direct educational route to becoming a mortgage adviser, there are many other career distractions that can trip up an adviser on the path from deciding to become an broker and achieving their goal.
Bottom line
So, is it all about money, or are there some other criteria that brokers can tempt their advisor employees with? Obviously, remuneration is important, otherwise we would all be on the same wage, and there would be no differentiation between different job functions and their respective worth.
The bottom line is that, for any broker firm, there is inevitably a limit to the amount of commission that is received on each case. Overall, this has been reducing over time and, since regulation, total net income from cases is down by around 20 per cent compared to the status quo prior to FSA rule. The main reason for this is that the costs of compliance on a case-by-case basis have increased significantly, hitting the margins that broker firms are making on each sale.
Because so much of our business is commission-based, it makes sense to work on the basis that the more successful an adviser is, the more he or she will be paid. Of course, there are limits to this, and one of the usual ways in which this is imposed is by the ‘brick wall’ effect. The adviser gets to the level where he simply cannot write any more business, because of the time it takes to process each case.
Getting back to the issue of training; there simply isn’t anywhere that offers a dedicated training programme for new brokers – a scandalous situation, bearing in mind that 70 per cent of mortgages now go through brokers. In the absence of any other mechanism to provide formal training, it is these organisations which should be investing in new blood.
The banks used to offer training regimes to their new employees, as an integral part of their employment. Not any more – as their share of the direct mortgage market has dwindled over time.
Addressing the imbalance
So, what’s to be done to redress this imbalance? And by whom?
At Mortgage Talk, we took the decision some time ago that there’s no-one better placed to understand our training requirements than us ourselves. So we launched our own academy, aimed at encouraging new blood into the industry. And, although it was only unveiled in October 2006, the new broker training academy has already generated a 100 per cent success rate, with our initial trainees all achieving success in their CF1 exams through the Chartered Insurance Institute.
Although it was a calculated risk, the academy’s results have exceeded our expectations, reflecting well on the trainees themselves, the scope and depth of the training programme which involves a significant volume of one-to-one tuition, and the quality of our specially selected trainers.
Following their initial ‘classroom’ training, the trainees went on to shadow existing mortgage advisers in offices across the UK. We found that this is the optimum route to enable them to gain experience in compliance, admin, customer services and sales, while simultaneously meeting with clients at scheduled appointments and undertaking admin duties.
Primary aim
Our primary aim is to attract graduate calibre people into the industry and, with six places available each year, we are already vastly over-subscribed for our October 2007 intake, with over 40 applicants vying for placement on the scheme. This time, following feedback and experience gained last year, we have shortened the course to four months, with the intention that the graduates will take up a variety of positions at our estate agency franchises.
Because of the nature of our franchise business we have an ever expanding need for high calibre advisers in our network. So, in effect, the academy forms part of our overall business model, fuelling a long-term aim to enable students to become fully conversant with all technical aspects of mortgage-related services.
Our recruits are also having a positive effect on the remainder of the business. Their presence has galvanised the overall levels of enthusiasm within the firm, encouraging other staff to work smarter, with a heightened awareness of customer service and enhanced levels of advice.
Get the daily news delivered to your inbox
Quite apart from the various in-house training regimes, we also need to make sure that we can incentivise our staff by featuring the latest technology, including up-to-date sourcing systems and platforms that enable them to write life business and to compete with other providers. Ideally, these should enable them to submit applications online, helping to save time and improve accuracy.
One of the most important ways to attract good staff is to understand their needs in the context of a fast-paced industry. Too many management teams are divorced from their employees and this can cause friction between staff and employers.
Therefore it’s essential for managers to take time to understand the latest trends within the industry, by keeping up-to-date with the industry press, latest developments, and hot topics. Ideally, they should even set time aside to visit clients alongside their staff. And that’s something that can’t be said for every service industry.
