A New Broker Payroll Solution: OTTO

pen,calculator and payslipAs 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:

  • Microsoft Excel (a basic do-it-yourself option)
  • InContact
  • D+H Expert
  • Lone Wolf
  • 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.

Payroll-CalculationFor 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.

Rob McLister, CMT

  1. A vibrant suite of technology tools and offerings in our industry is healthy and necessary to keep us competitive against the banks. It gives brokers and brokerages choice when choosing the technology platform that best suit their business needs. Productivity and efficiency improvements in day to day mortgage brokering activities, deal underwriting, document management, communication, CRM, collaboration, reporting, audit and compliance should be factors in your decision making on which system to use. For example, ever struggled with ‘passing’ your deals and info over to a colleague when going on vacation. A completely unnecessary stress and time waster. A good system should let you simply assign your deal(s) to anyone you choose. That person(s) will have access to all your deal data and notes and you can follow in real time where ever you have an internet connection. You’ll be surprised to learn what banks have for their mobile mortgage specialists…read on.
    First of all, the writer of this post offers a competing product to OTTO. In the spirit of discussion and respecting CMT’s platform of open discussion, no ‘plug’ or feature comparisons will be made. Readers could get that from their respective websites.
    What is important to share is the research I have done in speaking with brokers from independents brokerages, networks and franchise superbrokers, and bank mortgage specialists. The research is by no means scientific but an honest discussion in their daily mortgage brokering activities and technology challenges they face. Time and again the technology challenges I hear are: ‘I wish our system does this or that’, or ‘this is how we been doing things and its hard to change’. The latter is the most dangerous of all; to be complacent and not envisioning technology as an enabler in one’s business. This even from members of superbrokers with decent systems. The important thing for brokers is know what your business challenges are and find the technology platform that best address those challenges. See my article Mortgage Workflow Productivity and Efficiency on our facebook page: http://on.fb.me/1j3nc94
    I will leave with this:
    -Document storage is not document management. Document storage has no functionality other than to store a dumb document. Document management should enable you to interact with the doc in your deal workflow.
    -Drop box is not document management.
    -Email is not the most secure way to transmit clients’ private and confidential documents. Our industry needs to move away from emailing client docs around the internet and use secured medium such as web portals with https. Clients should be given this choice to protect their documents.

  2. You think payroll is tough, just wait till you need to complete FSCO’s AIR.
    I was on page 6 for 30 minutes and then it timed me out.
    I just hate, hate, hate the amount of questions they need on the AIR.

  3. FSCO’s AIR is pure government overreach. There is no justification for the amount of data they demand at the frequency they demand it. They could just as easily sample the data and spare brokerages from this complete waste of time.

  4. I don’t know why payroll seems so tough, quick books and telpay were taught to us by a fellow broker who’s business is over 300M a year and that’s how he takes care of it as well. Every week every agent that’s getting paid gets a complete break down on what they are getting paid on, their split and what their ytd income. Simple may be better.

  5. We better hush up now, as we could get slapped by the FSCO police. At least you were smart enough not to include your brokerage information. hehehe
    Page 6 of the AIR can certainly be reduced and simplified. Perhaps FSCO needs the information to get a true picture of brokerage risk, but it’s hard to compile the information they request. Takes me 2 days out of my life every year.

  6. You are right that report could be a right pain in the ass to do correctly, but did you know that MorWEBs CRM takes care of that AIR report automatically. I don’t understand why more Brokerages choose to be beholden to D+H? The AIR reporting solution is only one of a number of initiatives that has been available for at least two years.

  7. Payroll is easy if you don’t have to do it yourself. I’ve done it myself and it’s a chore. You’d be better off taking that time and prospecting for new clients. I would never work for a company that didn’t handle it for me.

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