The Managing Broker Gap in British Columbia
Why is there a gap and, more importantly, what can be done to close it?
Current numbers from the British Columbia Real Estate Association (BCREA) show a sobering reality: 47% of managing brokers who responded to an April/May 2024 REALTOR® survey said they intend to leave their role in the next six years.
The objective of the survey, according to Jennifer Lynch, Senior Vice-President of Professional Services at BCREA, was to gain deeper insights into demographic trends and behavioural patterns among REALTORS® in the province.
That 47% managing broker stat, she says, was “surprising and alarming.”
“Of all who responded, 80% stated the main purpose was retirement, followed by a much smaller percentage citing burnout and stress, regulatory and bureaucratic challenges, and economic factors,” Lynch says. “We have shared the findings of the results around how many managing brokers intend to retire in the next six years, as this is a significant area of concern.”
That raises two interesting questions:
- How will this gap be filled in the coming years, as new provincial industry regulations take effect?
- And, what are the potential barriers for young people who may be thinking about becoming a broker?
Who are managing brokers?
A managing broker, who’s different than a broker-owner, oversees agent recruitment, retention, training and brokerage finances, and resolves disputes. That person ensures compliance with new rules and regulations, and managing agent needs, which is a huge responsibility.
Managing brokers can also still trade in real estate to supplement their income, or perhaps to stay sharp in the sales game, depending on the brokerage.
Smaller brokerages with three or four people might face greater challenges balancing budgets. There’s often less money coming in, difficulties with recruitment, and complex regulatory issues that the managing broker has to oversee. For those reasons some managing brokers might look at either retiring or joining a larger brokerage.
The managing broker job can be a tough sell for young REALTORS®.
“You have to have a passion for [being a managing broker],” says Caroline Baile, Vice-President of Network Success and Support for Royal LePage, and a former broker. “Compliance is a big challenge for them. You’ve got new tenancy laws coming in [in British Columbia]. You’ve got the vacant home tax, the flipping home tax.”
"As a managing broker, you have to make sure you are not only aware of all these changes and rules and regulations, but you are articulating them and ensuring not only are your agents aware of them, they are abiding by them," she says.
As a managing broker, you have to make sure you are not only aware of all these changes and rules and regulations, but you are articulating them and ensuring not only are your agents aware of them, they are abiding by them."
Caroline Baile, Network Success and Support for Royal LePage
Matt Tinsley, with RE/MAX Truepeak Realty in Abbotsford, British Columbia, has been a licensed REALTOR® since 2011 and a broker since 2023, backs up the BCREA data, adding he has been observing it in day-to-day operations.
Compensation will need to be increased to help fill that broker gap, he says. Usually, a talented sales agent is going to make more than a managing broker.
“There is much responsibility and liability in being a managing broker and, in many cases, the compensation offered by brokerages does not match what is expected of them,” he says. “The risk/reward ratio just isn’t there. Even a moderately successful REALTOR® would have little motivation to go the route of a managing broker as it would be a substantial pay cut. I’m not saying money and compensation is everything, it certainly isn’t, but there is the practical side of life that needs to be considered.”
“The difficult part in this is that many small brokerages just can’t afford large salaries for managing brokers so you end up in a difficult spot, where they would likely agree that compensation needs to be higher, but the small brokerage can’t afford it. I’m in a unique situation where I’m also a partner in the brokerage, but not all managing brokers are in that spot. For many, they have to continue to sell real estate to subsidize their income.”
In terms of education, there needs to be more teaching on the practical components of the job built in, such as reviewing deals and answering REALTOR® questions, for example, says Tinsley.
Encouraging the next generation of managing brokers
Baile says BCREA launched a portal for REALTORS® that in part addresses the education challenges around being a managing broker, including new provincial regulations in the industry, with a support line and advisory council, all the most updated information, with links and supporting tools, that real estate professionals in British Columbia will need.
BCREA has developed several initiatives to support current and future managing brokers, Lynch says, including:
- Brokerage Policies and Procedures Template
- Managing Broker Support Line
- Managing Broker Community of Practice
- Managing Broker Support Group
“To further strengthen the pipeline of future managing brokers, we are also developing mentorship and succession planning resources to help facilitate a smooth transition for the next generation of industry leaders,” she adds.
Resources for Brokers
There are many ways that CREA can support managing brokers and their agents. Whether you’re an established managing broker, or thinking about next steps in your career, there is something for you.
Your membership gives you exclusive access to professional development resources, including private training programs and education electives, as well as a variety of tech tools to help your brokerage reduce costs, increase revenues, and serve clients better.
Such initiatives are “a fabulous roadmap for what other boards should do across the country,” Baile says.
More support is certainly required. “The industry is much more regulated and complex, which means the workload of a managing broker is much higher than it was … and that has also led to much higher [responsibility] for the managing broker,” Tinsley says. “I have to believe that has deterred many in recent years, and that likely wasn’t a huge barrier 30 years ago.”
Richard Laurendeau, with RE/MAX Westcoast in Richmond, British Columbia, became a REALTOR® in 1983 and became a managing broker in 1995. He says he has no doubt that a large portion of managing brokers are over 60 years old now. He credits the brokerage he was with for having the resources and training available for managers and those aspiring to be.
“As for the next generation? I see no substitute for being aligned with a brokerage and in some cases a brand that can provide good mentorship and insights as one transitions out of a sales career,” he says. “I believe that a solid foundation in the day-to-day practice of a licensee is an important part of transitioning into the managing broker role. Those who do so are typically not drawn by financial rewards, but rather a commitment to helping others.”
Chris McNeill, with RE/MAX Colonial Pacific Realty in White Rock, British Columbia, says he has four agents in his office near or over 70 years of age that hold broker licences. They had obtained their licences more than 25 years ago as a way of enriching their qualifications and knowledge level to add value to their business, he says.
“I think that the younger generation of licensees don't see the value anymore,” McNeill says. “That being said I was able to motivate one of my younger licensees to take on the managing broker course and she is now mentoring with me to develop skills in this area as well as still trading services.”
And there are still plenty of reasons to become a managing broker, such as providing opportunity for those who are ambitious and aspire to lead.
“You learn the business, if that person wants to open their own brokerage down the road,” Baile says. “It gives stability in terms of more predictable income streams. It might not be as much, but if they know what they have to work with, then it allows them to plan accordingly.”
“Usually managing brokers are on call, 24/7, in case an agent needs any help. But there's also more predictability in office hours as well. So, there are definitely benefits to a younger agent who's looking to get into it.”
Tell us what you think!
