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Challenges for self-employed brokers

Journalist: Jake Carter, Mortgage Introducer

ended 15. August 2023

Mortgage advisory firm CMME is introducing a new scheme designed for self-employed mortgage advisers and aimed at expanding its broker network to 50 self-employed advisers within the next 12 months.

What challenges do self-employed brokers face that employed brokers do not? How can these challenges be addressed?

How can self-employed brokers boost their business? 

What are the pros and cons of self-employed brokers and employed brokers?

 

6 responses from the Newspage community

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Stephen Perkins
Managing Director at Yellow Brick Mortgages
As a brokerage with over 60 self-employed advisers, we are well-placed to comment on the pros and cons of self-employment.

The benefits are the higher income potential, usually earning much more per case and therefore being able to do quality more than having to push quantity to earn at appropriate levels. Another key benefit is the work/life balance flexibility that usually comes with being self-employed.

The challenges are the timeline between writing the business and the money coming in when starting, also the lack of guaranteed income every month with peaks and dips. But the largest challenge and concern most will have is lead supply or generation.

The best way to overcome this is to choose a firm that will give you all the benefits of self-employment, but also provide you with leads and a fair commission split.

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Anil Mistry
Director and Mortgage Broker at RNR Mortgage Solutions
The primary challenge faced by self-employed advisors pertains to the inconsistent nature of their income. Consequently, for individuals embarking on a new journey in self-employment, it is advisable to establish a financial cushion equivalent to six months' worth of expenses prior to commencing a self-employed venture.

Over the course of time, self-employment can prove to be highly financially rewarding and offers the distinct advantage of complete flexibility in work scheduling, along with the absence of micro-management.

A pivotal strategy involves active engagement on social media platforms, thereby fostering the development of a personal brand. This brand establishment contributes to the cultivation of the "know, like, and trust" factor, thereby enhancing the likelihood of attracting and retaining clients. Moreover, this approach liberates individuals from the dependence on leads supplied by the self-employed arrangement's affiliated firm.

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Austyn Johnson
Founder at Mortgages For Actors
If you dont work, you dont get paid. Simple. Work hard, work well and be self-employed. Dont rely on anyone to give you leads. Be the person (not the company), that your clients remember and you will get referrals and return business regularly.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
The biggest challenge is having a steady stream of business and cashflow given that you will probably face 3-6 months minimum of building a pipeline and waiting for bankings to hit. Once you have established yourself though the flexibility and rewards are there for good self employed brokers to have a great career and strike a healthy work life balance.
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James Miles
Director - Mortgage Adviser at The Mortgage Quarter
Self employed is perfect for an adviser that wants their life back and gain flexibility day to day stresses. On the other hand a mortgage broker needs to be ready to be availalble majority times of the day so do not expect 9-5 hours if you want to be successful. You'll need drive and passion to expand your business as ultimately you're the face and you can grow your network whilst reaping a lo tof the long term benefits even if you work under another brand for support. I would recommend joining an estabilished firm to help with onboarding and being able to trade quicker which means you can focus on attracting new clients and start advising as quikcily as possible. The biggest risk is not having clients and things can become tough if you do not have a suitable business plan, this is where an employed role could be safer.
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James Bull
Mortgage Broker at JB Mortgages
I have been a business owner for over 6 years, the biggest challenge is undoubtedly cashflow, especially in the first 12 months of trading. Even if you have a flying start off the blocks, with procuration fees being paid after completion this may mean no income from this source for 6 months plus. This is offset by charging a broker fee on offer which provides income much quicker. As a pipeline is built up by doing regular business, this becomes much less of an issue and income will flow consistently. Ultimately though, once this initial period has been overcome, the benefits of being self employed and the flexibility and work life balance it gives far outweigh the guaranteed salary that an employed role would offer.