The lack of quality advisers to service borrowers when mortgage sales pick up will be a major concern for the industry, according to an exclusive Mortgage Solutions report.
Its research, revealed by Ian Giles marketing at the British Mortgage Senate last week, estimated mortgage adviser numbers have fallen 56% from 33,000 in mid 2007 to 14,500 in May 2010.
The market would have to rise from its current £143bn level to £215bn before the shortfall is felt, according to the research. Many firms may also be looking to quality new entrants as a better option than returnees.
Roughly 60% of those who left the industry have moved into other industries, with 25% thought to have stayed in financial services, including banking and debt management.
The notable sector exceptions include the public sector, taxi driving, teaching and even pizza delivery.
When the upturn comes, intermediary firms are confident they can ‘scale up as quickly as lenders' but high-quality recruitment will be seen as the key, longer-term issue, according to the broker and lender survey.
Broker firms recruit as business volumes grow, which left many firms unsure of how to tackle the variable market this year, the survey showed.
Alison Beech, business development director at Spicerhaart, which is interviewing mortgage brokers agrees recruiting to 'fit and proper' standards is a challenge.
"We compete against the banking sector. Estate agency-based advisers need to work weekends, unlike banks, which doesn't help, along with the fact that banking also pays very well," she says.
Training and development was listed by 36% as the biggest cash and time drain during the recruitment process, followed by the recruitment fee, the time cost while 18% cited the cost of making a bad hire.
Katie Tucker, chief operating officer of high-net worth broker firm Private Finance, says the cost in time and money partly explained the firm's mix of employed and self-employed personnel.
She believes it is a retention issue adding ten years ago, John Charcol's rigorous training process created half the industry.
"Companies have stopped doing that because brokers walk away after two or three years, instead of five.
"Of the new companies that sprang up in 2006/7, those putting in the training were losing out, and those that didn't thought that it hardly mattered anyway, because business was booming."
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