As any successful business knows, staff are the lifeblood of a company, and nowhere is this more important than in customer facing industries such as financial services. In this market, 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.

More than ever before, brokers are struggling to retain good, loyal, hardworking staff. There is little doubt that, since the advent of the FSA regulations, the industry is witnessing a reduction in the overall number of mortgage advisors. Regulation of the industry has had the effect of discouraging new advisors from taking their first step into the mortgage advice arena, and has caused some existing staff to reassess 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. And, given the cost of training and so on, it’s not surprising that brokers are anxious to retain the good quality staff that they have already recruited.

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% 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 advisor is, the more he or she will be paid. Of course, there are limit to this, and one of the usual ways in which this is imposed is by the natural ‘brick wall’ effect. The advisor gets to the level where he or she simply cannot write any more business, because of the time it takes to process each case.

Having said that, it remains good practice for brokers to offer reward schemes and incentives to advisors, by tiering these towards higher performing employees. The idea here is that the broker will offer progressively higher rates or bands of commission to advisors that achieve higher sales or case numbers.

At Mortgage Talk, we offer such a scheme, so less able advisors are penalised if they drop below a certain base level, while those that do succeed in selling more often progress into a higher commission band, frequently increasing their earnings significantly for only a modest increase in case numbers. It’s a bit like operating an income tax scheme, except in reverse. Higher levels attract a higher band, and hence earn proportionately more than lower rates.

Mortgage Talk also operates a bonus scheme whereby certain thresholds of commission, income and case numbers attract lump sum bonuses. This method serves well in incentivising staff to reach a little further to achieve higher earnings.

Another way in which the industry is changing is by the introduction of administration fees. The new FSA regulations have been instrumental in brokers ushering in this new regime of charging for at least some of the work they do and, while there are obvious downsides where some clients object to paying for a service that they previously enjoyed for free, there are other advantages.

One positive aspect is that we can now arrange to share this fee income with successful advisors, as well as agreeing to offer commission to those members of staff that sell additional products or services to clients. These cross selling opportunities include related products such as life assurance, legal recommendations or services, current accounts and other added value financial services such as credit cards. All these non-regulated items are discussed with the client at the point of sale, as part of the mortgage fact finder and, as such, the advisor can legitimately use the opportunity to offer these added value services to his or her customers, earning extra commission into the bargain.

Brokers should always be at pains to help their staff by featuring the latest equipment and technology, including an up to date sourcing system, plus 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 which, in turn, enables the advisor to write more business.

Therefore it is 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.