Becoming a mortgage broker

They will certainly supply it and actively do. Last time I was reviewing this it was in every pack provided.

Instead of asking questions on the forum, ask their BDM’s where you will actually get answers.

All top tier volume aggregators will receive the same base commissions, though some may receive volume bonuses, whereas others might not hit the required numbers.

Terryw wrote:

<div class=”d4p-bbt-quote-title”>CharlieX wrote:</div>
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?

No double edge sword. This is commercially sensitive information and aggregators would be prohibited in making it available to the public. There is no legislative requirement to notify the public either. It would be made available in the contract you would potentially enter with an aggregator though.

A lot actually do have it easily available to see, Connective for example: http://master.connective.com.au/flex/commSchedReport.asp

broker’s commissions have to be transparent to the clients?
the clients are the public?

• This reply was modified 10 years, 9 months ago by  CharlieX.

I’ve seen some mentoring arrangements where mortgage brokers pay around 20% of their commission, which can add up quickly depending on loan volume. For example, if a student writes 4 loans a month at $3,000 each in commission, that’s $2,400 going to the mentor. If the mentor has multiple students, the numbers get significant. It’d be helpful to understand how much time mentors typically spend reviewing files and supporting new brokers, so entrants can assess whether the fees are proportionate to the support they’re getting.

Good questions — I think it’s worth unpacking a few things around mentoring in mortgage broking so you can better assess what’s fair.

First up: mentoring is required for new brokers. The Mortgage & Finance Association of Australia (MFAA) states that brokers with less than two years’ experience must have a mentor. The mentor’s role includes real-world coaching, compliance support and deal submission review — not just ticking boxes.

Given that, the compensation for a mentor should reflect more than just “checking paperwork”. It should account for:

Business development & client strategy support
Compliance & lodgement oversight
Deal structuring & loan packaging guidance
Time spent answering questions, reviewing files, mentoring conversations
In the example you calculated (20% of upfront commission = $600 per loan, 4 loans/month = $2,400 to mentor, 5 students = $12,000/month), that could be reasonable — if all those conditions are met: the student is writing 4 loans monthly, the mentor is actively engaged beyond paperwork, and the arrangement is clearly defined.
However, if the student is writing far fewer loans (for example, as one industry speaker says: “4 per year” might be more realistic starting out), then the mentor’s cut may seem disproportionate.

A few quick checks you should ask:

What exactly is the mentor doing? (Just paper-check or full coaching?)
How many mentees does the mentor take on? (Quality vs quantity is important)
How long does the mentoring period run? (e.g., first 12-24 months)
What happens after the mentoring period? Does the split change?
The split or fee should reflect realistic production levels (are 4 loans/month realistic for you right now?)

In short: 20%+ of commission can be fair if the mentor is delivering substantial value and the mentee is producing enough volume. But if the workload, support or volumes are low, then you might question whether the split aligns with the value you receive.

It’d be great if there were more transparency in the industry about what that mentorship actually includes, because the difference between a quick phone check-in and full file support is huge.

That is a private matter between the mentor and mentee – a contractual matter that would vary between the parties. All that the ‘industry’ requires is someone to be named as a ‘mentor’