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Viewing 20 posts - 101 through 120 (of 126 total)
  • CharlieX
    Participant
    @charliex
    Join Date: 2015
    Post Count: 98

    well, I don’t know the fair compensation figure, that’s why I am asking what is the fair figure.

    say the 3% per gross commission would add up because the higher the value of the loans and the larger the number of loans written by the student. so it costs more than $90 for the mentor to check through the student’s paperwork? how many hours or days does it take to check the works of the student?

    if it’s 20% or more, isn’t that more than the aggregator already?

    let’s see,
    20% x $3000 = $600 per loan

    student writes 4 loans per month = 4 x $600 = $2,400 per month to the mentor

    if the mentor has 5 students, that would be $12,000 per month to check the paperwork of the students?
    this task obviously pays way more than my teaching at the university.

    I would definitely be a mentor if that is the going rate :)

    anyways, please shine some light on this mentoring requirement so new entrants can assess their situations.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    I have no idea either, just guessing.

    I think it would be extremely rare for a student to write 4 loans per month, and there would be more involved then just checking the paperwork.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    CharlieX
    Participant
    @charliex
    Join Date: 2015
    Post Count: 98

    what is the average number of loans a new broker in his/her first year is expected to write per month?

    also which aggregators charge per transaction rather than a percentage of the loan value?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    an average would probably be 4 per year.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Kinnon BellKinnon Bell
    Participant
    @kinnon
    Join Date: 2014
    Post Count: 151

    Charlie, there is a lot more to being a mentor than just checking loans. It’s offering all sorts of guidance too that is involved with running a successful mortgage broking business. It may take them an hr to check through your loan but what about all the coaching up until that point – making sure you pick the right loan for the client, especially if it’s a tricky one.

    IIRC correctly you have no previous lending experience so it will take a lot of time to build up that knowledge base and learn all the intricacies and idiosyncrasies of lending in general but how each financial institution works.

    You can either hold your own agreement direct with the aggregator and hold a separate agreement with your mentor or you can go under their agreement as a loan consultant assuming they hold an ACL. For mentoring if it’s a % or comms then I would think that anything from 20-40% would be fair depending on their experience and how good they are. Keep in mind if you go as a loan consultant under your mentor’s ACL it will also depend on their agreement with their agg. They may have a 90/10 or 95/5 split so you would be receiving a % or that and not a % or 100%. There are also the mentors who charge a fee for their mentoring which may be anywhere from $500p/m upwards.

    I wouldn’t want a mentor with too many mentees as well. They get busy and overwhelmed so it’s one thing to look out for.

    It’s not just the mentoring or agg fees you need to consider either. There’s PI insurance, membership fees with the MFAA or FBAA, potentially software licencing fees and other incidentals that add up.

    Be prepared to be poor for a long time and have at least 6 – 12 months of living expenses set aside if you’re giving up your job to do this. The pipeline for a mortgage broker is a long one. From first meeting, to when the clients are ready to buy, submitting the loan app, settlement, payment to the agg then the agg passing payment to you. This process can be anywhere from 3 to 6 months and even longer sometimes.

    I think writing 4 loans a month to begin with is extremely optimistic. Do you have any networks set up already? How do you plan on getting clients?

    Kinnon Bell | Kinetic Funding
    http://www.kineticfunding.com.au
    Email Me | Phone Me

    Mortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.

    Profile photo of KaviKavi
    Participant
    @kavi
    Join Date: 2014
    Post Count: 18

    Is there a specific membership requirement to run your own MB business (FBAA or MFAA )
    Cheers,
    Kavi

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    None. Banks want membership of one or the other.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of RedwoodRedwood
    Participant
    @redwood
    Join Date: 2013
    Post Count: 340

    As Terry said, generally you need to be FBAA or MFAA qualified to practice and also join an aggregator. The numbers are swayed to FBAA who have less stringent joining requirements than MFAA. Also, you need experience up front plus be a ACL or authorised representative of an ACL.

    In summary, its not as simple as it sounds. If not done already enrol in Kaplans Cert IV which will be the starting point then start the process of what else you need i.e AML, prof indemnity, aggregator, staff etc

    Cheers

    Redwood | REDWOOD | SMSF | PROPERTY | FINANCE
    http://redwoodadvisory.com.au
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    SMSF - PROPERTY INVESTMENT - WEALTH CREATION AND FINANCE SOLUTIONS

    Profile photo of KaviKavi
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    @kavi
    Join Date: 2014
    Post Count: 18
    Profile photo of TaylorChangTaylorChang
    Participant
    @scha9799
    Join Date: 2009
    Post Count: 234

    Thank you for the above,

    Just out of my curiosity, currently, I am working in the financial service industry (fund management) and with finance degree. Do you guys think I can get an exemption from doing the certificate or diploma course to get the MFAA or FBAA ?

    TaylorChang | Finance Broker
    Email Me | Phone Me

    Home loan | Commercial loan | 0414 691 517

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Thank you for the above,

    Just out of my curiosity, currently, I am working in the financial service industry (fund management) and with finance degree. Do you guys think I can get an exemption from doing the certificate or diploma course to get the MFAA or FBAA ?

    No. I was in the mortgage broking industry for around 8 years, masters of law, lawyer etc but still have to do a useless cert IV

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Yup not a chance of getting out of the Cert IV requirements unfortunately.

    There’s plenty of intensive courses however to get it pushed through ASAP.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of TaylorChangTaylorChang
    Participant
    @scha9799
    Join Date: 2009
    Post Count: 234

    thank you guys

    Sound like I need to focus on getting it, rather than finding the way to get around it.

    TaylorChang | Finance Broker
    Email Me | Phone Me

    Home loan | Commercial loan | 0414 691 517

    CharlieX
    Participant
    @charliex
    Join Date: 2015
    Post Count: 98

    the figure of 4 loans per month has been what the franchises and broking groups shown to me in the last few weeks that I have been gathering information. they said this is the minimum that a broker should be doing in the industry.

    let’s say, in the Melbourne outer suburbans the average property is about $400k, the average upfront commission is 0.60% and the average trail commission is 0.20%, then the splits on the upfront commission would be:
    upfront commission = 400k x 0.60/100 = 2,400 x 4 loans = $9,600
    aggregator’s split = 9,600 x 20% = $1,920
    mentor’s split = 9,600 x 40% = $3,840
    broker’s split = 9,600 x 40% = $3,840

    wow, that’s a lot of pocket changes to the mentor and aggregator while the broker slaves to get the deal?

    does anyone here has a mentor-mentee contract that I can review to get what the relationship consisted of?
    appreciate your help

    • This reply was modified 5 years, 3 months ago by  CharlieX.
    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Charlie, there is a lot more to being a mentor than just checking loans. It’s offering all sorts of guidance too that is involved with running a successful mortgage broking business. It may take them an hr to check through your loan but what about all the coaching up until that point – making sure you pick the right loan for the client, especially if it’s a tricky one.

    Good post.

    I mentor – and it’s certainly not for the money!

    There’s a lot of time/effort involved – especially early on.

    It’s not a “file checking” role – it’s about mentoring in all facets of the industry and helping them develop their businesses.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hate to say been broking for 26 years and still had to under the same exam / qualifications as someone who had been around for 2.6 weeks

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    CharlieX
    Participant
    @charliex
    Join Date: 2015
    Post Count: 98

    The Cert IV and Diploma courses are basically the same, only that the Diploma course has a few extra stuffs on consumer finance. these two courses needs to be just one course, and get rid of the useless case studies and role plays. they need to be very focus on the laws, regulations, guidelines, code of conduct, and so on. There are so many useless things in these courses, no wonder someone coming out from the courses don’t know where to start, and need a mentor to hold hand. there needs to be more practical concepts, taking a broker from the information gathering stage right to approval or rejection of the finance, and even to the settlement stage will let a broker understand the whole process from beginning to end. just feel bad for the training system for this industry. MFAA and FBAA need to wakeup if they truly want to improve this industry.

    CharlieX
    Participant
    @charliex
    Join Date: 2015
    Post Count: 98

    anyone know the variations or differences that the lenders pay the aggregators?
    that is, what is the upfront and trail commissions that say ANZ pays to Choice, Plan, Vision, Fast, AFG, Connective, etc?
    most aggregators have between 20 to 40 lenders on their panels. are these secret information or are they supposed to be transparent as brokers are transparent to the retail client/customers?

    being new and researching I always come across brokers that said they are best pay by this aggregator or that aggregator. I have no base to measure what is that term “best”

    please share what you know to us newbees, or where can I find these information :)

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    its hard to say as that information is not given out readily. Generally commissions are probably similar, but there are volume bonuses given to aggregators by some banks. Best to email a few and ask for their commission schedules.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    CharlieX
    Participant
    @charliex
    Join Date: 2015
    Post Count: 98

    I thought aggregators would hand that out just as us brokers are required to handout our credit guides to the retail clients. I’ve met or discussed with all the above aggregators and none has given me that commission sheet. is there a double edge sword here?

    • This reply was modified 5 years, 2 months ago by  CharlieX.
Viewing 20 posts - 101 through 120 (of 126 total)

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