Bankers’ bonuses are back in the headlines with rumours of record payouts and various bank CEOs in line for multi-million-pound payments.
It is certainly the talk of the football/ rugby/golf club and the topic of heated debate at dinner parties. Celebrity bankers are now household names. The general public is familiar with Stephen Hester, Eric Daniels and Bob Diamond. I challenge any of you to name the CEOs of Royal Bank of Scotland, Lloyds Banking Group and Barclays 20 years ago.
The coalition Government has warned the state-owned banks that they must show “sensitivity” to public opinion when awarding bonuses this year but David Cameron has decided not to slap another tax on City pay or to introduce further restrictions on bonuses.
Negotiations are still going on about disclosure of income for top-earners who do not see their remuneration in the public domain but the power seems to have been handed back to the banks, much to the dismay of Vince Cable. Will they listen to public and political opinion?
Recent moves by Credit Suisse to defer more of its staff bonuses and cut cash payouts is a welcome sign and is surely the way to provide a long-term solution to the banker remuneration dilemma. It will be interesting to see how the UK banks remunerate their key staff in the forthcoming bonus rounds. They need to remain competitive and ensure they can attract and retain the top talent and I suspect a balance of cash and stock will be the answer.
For the majority of mortgage brokers, the concept of bonuses and commission is largely a dim and distant memory but rest assured the worst is over and better times lie ahead.
Aligning yourselves with those who can actually obtain a mortgage is critical and, like it or not, the millionaire banking brigade are very bankable clients.
The top end of the mortgage market is certainly well supplied, indicating a strong appetite from a number of lenders prepared to sanction credit applications for bankers reliant on bonuses, regardless of who they work for or how they are structured.
Learn how they are remunerated, understand how their deferred stock is awarded and how it vests. Establish who manages their employee benefit trust and keep close to them as they are the clients who will help you return to the heady days of mortgage broker bonuses.
If you do not have access to the banks at this end of the market it is worth referring to a broker that does. Most will cut a deal on the fees and half of something is a lot more than all of nothing.
Mark Harris is managing director of Savills Private Finance