New lenders db Mortgage and edeus have been accused of distorting the mortgage labour market by offering "inflated salaries" to key account managers and business development managers.
John Malone, managing director at Premiere Mortgage Service, says he knows of several lenders which are currently reviewing the salaries they offer to senior sales staff, because they cannot attract suitable employees as a result of the salaries being offered by db mortgages and edeus.
He says Platform, Portman Building Society and Northern Rock are among a number of lenders all currently having to look at the packages they offer as edeus and db mortgages are both said to offer nearly double the normal salary and benefits for such positions.
edeus has also guaranteed commission payments to the end of the year even though staff may not be meeting their full sales targets, it has been claimed.
The move by both edeus and db mortgages is seen as creating unwarranted pressure in an already-difficult financial and employment environment and one of several destabilising influences both lenders have already had on a finely-balanced industry, suggests Malone.
But Alan Cleary, managing director at edeus, has defended his company's salary range for business development managers saying: "The bottom line is if you are going to work for a venture capitalist-backed business, there is a risk premium whereas if you go and work for a large corporate there is probably more [job] security.
"We expect to pay a premium for the risk the staff are taking but there is nothing that we are offering I would be embarrassed about and we did also research the industry in terms of what we ought to be paying."
Cleary admits salaries may be "in the upper quatile" but says he believes such wages are justifiable.
And Bill Dudgeon, managing director at db mortgages, has also defended the salaries paid by his firm, saying: "We pay the right salaries for the right people we are paying market rate salaries and we are not going out to skew the market place by paying a lot more [in terms of salaries] than it demands."
Meanwhile, Mark Robson, sales director at Northern Rock, has denied the lender is experiencing recruitment problems by stating: “Northern Rock is not experiencing any general increase in its sales management turnover. Our salary and bonus structures are regularly reviewed. They are maintained at levels that enable us to recruit and retain staff of the required quality and in the numbers needed to maintain our position as a high growth lender."
However, Robson has also admitted Northern Rock "recently improved" its remuneration package for BDMs. This, he says, was implemented alongside salary enhancements for customer service personnel.
Platform's spokesman Paul Hunt also says he is unable to comment on market speculation about the lender's hiring practices, while the Portman has so far been unavailable for comment.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonline
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