In part 3 of our The Diversifiers series, we talk to Adam and Luke Bazuk of Canadian First Financial Centres & Dominion Lending Centres YBM Group.
ADAM AND LUKE BAZUKCanadian First Financial Centres - Thornton, ON
Dominion Lending Centres YBM Group
Location: Thornton, Ont.
Mortgage brokering may be their focus, but these players are winning with a host of sidelines. CMP is shedding light on those alternative revenue streams
When eating a fancy dinner would you be satisfied with just a big piece of steak, regardless of how delicious, seasoned and filling it is? Of course not. Because it should be complemented by sides; mashed potatoes, green beans, a salad, gravy.
Well, these industry leaders view their business in the same light.
Most may have started in the mortgage broker industry, but they have each branched out into other areas of financial services to complement their business. Whether it’s insurance, bank products, syndicate mortgages, lending or financial planning; each one has found a unique way to diversify and include alternative revenue streams to help boost their bottom line. Of course, there is no such thing as a one-size-fits-all diversification strategy. That’s why we’ve rounded up a number of unique perspectives to see how and why they chose a specific diversification approach. And we have even caught up with two of the diversifiers featured last year to see what sort of progress they have made.
So sink your teeth into the insights of your fellow brokers. Who knows, you may find some inspiration for the next stage of your own business.
Which areas have you diversified into?
My brother Luke and I have been mortgage agents and, subsequently, brokers since 2005. We have always worked together and have enjoyed building this business and creating strong relationships with our clients, together. It was in 2009 that we started to become sensitive to the fact that the long-term sustainability of our business required us to have the ability to offer more to our clients. Thanks to a referral and recommendation from our DLC principal broker, Darick Battaglia, Luke and I had the opportunity to purchase a Canadian First Financial Centre in August of that year and incorporate that business into our existing branch office. Luke became our CFFC adviser, along the way obtaining his licences to be able to offer financial advice and investments (mutual funds, RRSPs, TFSAs, RESPs, GICs and so forth) and life insurance to our clients, while I continued to lead the mortgage business through our Dominion Lending Centres branch. As time has gone on, Canadian First has developed into a very exciting diversification opportunity, having obtained a Schedule 1 bank licence in June of 2013 and purchasing MonCana Bank in August of that same year.
We are shareholders of Canadian First Financial Group and, as a result, we are now owners of our own bank. We plan on launching our own GICs, RSPs, TFSAs, bank accounts and unsecured lines of credit.
Is being a one-stop shop the key to diversification?
Absolutely. We passionately believe in doing more for our clients, keeping more relationships to ourself and owning more of the value created from being a trusted adviser in your local community.
What advice would you offer brokers wanting to diversify?
Stop thinking about it and just do it. What your gut is telling you (that you should diversify) is indeed the case. For me, it was never about “how much money will I make if my brother Luke sells someone an RRSP?” I have often told my peers that having the ability to walk my clients across the hall to speak with Luke, to have him design a financial plan, set up an RRSP or whatever it happens to be, has made me look more professional in the eyes of my client.
How do you deal with compliance?
Canadian First Financial controls compliance from its head office. Our adviser is fully licensed and gets the support required to make sure we are always OSFI compliant.
Do you have a specialist devoted to that non-brokering area?
As mentioned previously, up until now we have had a dedicated financial adviser and life insurance agent, which was required to be able to offer the nonbrokering products to our clients. However, CFFBank will soon offer solutions where some of the investment products can now be done directly (by me, the mortgage broker) with my bank (GIC, RRSP, TFSA).
What are the potential pitfalls in diversifying? What have you learned?
I don’t feel there are any pitfalls in diversifying if you do it right. That means you need support. Otherwise, you can be spread too thin and lose sight of your core business -- mortgage brokering.
What are the benefits to servicing more of your clients’ needs in-house in terms of building relationships and ownership of the client?
My strongest client relationships are ones in which my client has elected to do more with us; mortgage, TFSA, RRSP, RESP, life insurance. It is these clients that send me the most referrals because they are so happy and believe in us. It is these clients that I feel most confident that they will return to me for all their future financial needs including the all-important mortgage. I just can’t wait to be able to offer checking accounts and unsecured lines of credit. On an individual client basis, I firmly believe that together with a high level of customer service, if I have them arrange a mortgage with me, a payroll chequing account and their child’s RESP, there is a much higher chance they will be my client for life.
