As a mortgage broker, signing up with a franchise or broker network has advantages. But for those who were previously licenced under a large brokerage, switching to a franchise/network model has one notable disadvantage: payroll.
If you’re a broker-owner who’s considering moving to a new firm, don’t listen to anyone who brushes off payroll like it’s a minor factor. It’s not. It’s a significant time sucker and distraction to your business if you don’t have a foolproof system. This author learned that firsthand.
Whereas large brokerage firms (e.g., Invis-MI, Mortgage Architects and TMG) have staff handling payroll for agents, the DLC’s and VERICOs of the world generally do not. That means you either have to create your own payroll system or buy/learn an existing system. Depending on the solution you pick, it can be a small hassle or a large one.
Brokers use various software platforms to simplify the payroll process. Examples include:
Firm-specific software (e.g. from DLC, Verico, Mortgage Architects, Centum and Mortgage Alliance [Mortgage Alliance’s BOSS system is also available for licencing to outside firms])
Last week a new solution launched from technology provider Otto. It’s called the “Financial Management” component and forms part of OTTO’s comprehensive operating system for mortgage brokers. The system also includes an online application that integrates with Expert and Morweb, a process dashboard, document storage, conditions tracking and a client communication system.
(If you don’t want the whole enchilada, there is a “light” version that has everything needed to process commissions.)
In either incarnation, OTTO’s Financial Management asks you to enter Lender Compensation details and individual broker splits only once. It then does all the math and provides you with an up-to-date commission pipeline by month and by lender. OTTO also has an automated way of generating commission statements for each person in the brokerage, without the intervention of staff.
For each pay period, the system automatically creates and sends to each agent a detailed statement inclusive of any deal related expenses, and notifies all parties of any files that are not paid because they’re not compliant.
Like all standalone payroll/compensation solutions, however, OTTO cannot remove all of the manual tasks from the process. You still have to verify three items when a commitment is signed by the client:
lender name (from a drop down menu)
the mortgage product/term
the mortgage amount.
You must also confirm receipt of pay from the lender (as it arrives in your account) in order to generate a payroll report. That said, OTTO goes a long way to eliminate the tedious payroll steps many of us have to undertake each and every week. (Again, this is one area where full service brokerages add underrated value)
OTTO is unique in one other regard. If you don’t want to do your own payroll, the company will do it for you. Users can elect to outsource commission processing to OTTO for a variable cost ranging between .75% and 1.25% of the total commissions distributed. (This is in addition to having an Enterprise subscription at $999/yr. www.ottomortgage.ca/pricing has more info on costs.)
No matter which solution you use, every payroll program has its benefits and quirks. And every single one requires a learning curve.