Bankers beating brokers at their own game?

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Brokers are quick to point to their knowledge and expertise as the reason the industry is winning back market share, but one industry player believes the banks are catching up in that area.

“It’s a misnomer – and I know we like to believe that the financial institutions can never provide the same kind of service that a mortgage broker can but I’m not really sure about the validity and accuracy of that way of thinking,” Boris Bozic, president and CEO of Merix told “Financial institutions spend a lot of money on training; look at all the (big banks) and how they’ve grown their proprietary sales forces.”

That’s not to say that brokers aren’t upping their own game and the public is taking notice, however.

Bozic believes the industry, as a whole, is helping draw attention to the value that a broker provides – through advertising, industry events, and industry organizations.

“There is no doubt the brokers out there today, the really good ones, are hustling, they’re providing exceptions service,” Bozic said. “There are a number of brokers who are really running their business like a business – they’re saying we’re not a bank; we’re experts in a certain niche, in a certain market sector and saying ‘that’s where we want to go out and really dominate.’”

And the public is taking note.

“It terms of mortgage originations, 52 per cent of mortgages were from banks, with 34 per cent from mortgage brokers  (and  the  remainder  from  credit  unions, life  insurance  or  trust  companies,  and  other lenders),” CAAMP’s annual spring report states.
Moreover, brokers are the current leader in winning first-time homebuyer business, with 39 per cent choosing to work with them.
  • Dustan Woodhouse on 2015-06-19 9:53:33 AM

    In the world of the independent mortgage Broker there is no uniform all-encompassing training. There is no MBA in Brokering.

    The majority of Brokers at the top of their field learned by 'doing' and have a wide variation of formal education levels.

    Most Government licensing programs are designed only to filter out the truly inept or criminals, the licensing programs are not designed to build Brokers capable of offering high quality advice based on a deep knowledge of product offerings, market stats and other relevant data. While the Banks could make an attempt to dominate through the development of a comprehensive training program they may find in doing so that attendees of such training might realize that a truly educated mortgage professional without access to Monolines, Credit Unions, and Private Lenders simply cannot help a significant number of clients. Thus many going through such training would come to see the limitations of working for a single lender.

    This said of course there are riches in niches and there is much to be said for focus. Being all things to all people is not the goal either.

    For the time being the industry as a whole is still in its infancy when it comes to building an educational model that creates top notch Brokers or bank reps. DLC has created an excellent pre-licensing and post licensing program that addresses a wide variety of challenges for new Brokers. However there is little that can prepare a mortgage Broker for the next file, as even 1000+ files later I can attest to still learning something new with nearly every file.

    Always be learning. :)

  • Frank on 2015-06-19 10:19:40 AM

    Sure there are mortgage specialists that know a lot about what 'their bank' can and will do. There are also specialists that know '0' about mortgages as well as those in branches...then again no one in a branch I've been involved with has much knowledge on mortgages to speak of.
    There are also mortgage agents and even some brokers that know very little.
    Over all, the broker side is more knowledgeable about mortgages plus our knowledge encompasses a much wider spectrum over numerous lenders from A to B to Private and everything in between.
    I've sat in with BNS and TD branches signing my clients...the staff could not answer questions that to me were second nature. Really quite sad.
    If we want to stay ahead of the banks which would be easy, as brokerages, agents need to be trained and not left to their own devices and the experienced ones need to ensure we're always training, etc. to stay in the top of our game.

  • Ron Butler on 2015-06-19 11:06:16 AM

    I think the theme of Boris's message is that we need to understand the banks are formidable adversaries and mortgage brokers tend to be much too dismissive of the power of these companies. The banks are vastly rich and the people at the top are often brilliant business people. We are very foolish to think of ourselves as relentlessly smarter and more able than bankers.

    The banks are huge organizations and tend to move more slowly than we do, so as much smaller entities mortgage brokers can gain an advantage in nimbleness and we can afford to be much faster adaptors to current trends.

    Dustin makes a good point that organizationally our industry does a bad job of enforcing higher education standards.

    It is true that some staff at the branch level seem less than stellar but I could also introduce you to many mortgage brokers that would give you the impression they are the offspring of the mating of brother and sister.

    Bottom line is heed the message of not getting too comfortable and complacent about our position in mortgage origination food chain, we need to innovate and become utterly focused on providing superior consumer value as opposed to just thinking we are smarter.

  • Gord Appel on 2015-06-19 12:53:22 PM

    Service, Choice and Advice. That's the value proposition of the Mortgage Broker. While the banks can (and do - increasingly) compete on service they cannot provide choice and therefor cannot provide advice.
    Advice is only truly advice when it's accompanied by choice... otherwise it's simply sales. The Banks sell their product lineup and while those products may well be the best option for an individual client how can the client rest assured??
    Mortgage Brokers are the only people in the country that are independently educated and licensed to provide advice on mortgages.
    Yes we need to up our game but let's all remember what the game is.

  • Victor Simone on 2015-06-19 6:00:53 PM

    Ask any banker BDM if their bank wants wants the independent brokerage channel to disappear the the answer is "Yes." If not, your dinner guest needs another drink to break the ice.

    Banks will always be strong, but the independents have a proven position in the mortgage marketplace and are a valued stakeholder.

    Banks are huge, but the mortgage share of deals done through the independent channel is HUGE too. We can learn alot from each other.

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