Banks better than brokers, suggests report

Banks better than brokers, suggests report

Banks better than brokers, suggests report
This may not be the best way to start your day, but a new report suggests bank reps remain better at clinching deals than their broker counterparts. 
 
“Banks are more successful at converting consultations into sales than other channels,” reads CAAMP’s Consumer Mindset report, part of its 2013 Spring Survey. The polling of 1,140 current homeowners suggests mortgage specialists enjoy a 77 per cent conversion rate compared to 51 per cent for brokers and 42 per cent for credit union reps.
 
Those success rates reflect both new mortgages, renewals, refis and switches. They also speak to overall broker market share in terms of new mortgages. That came in at 24 per cent for the spring survey  – actually up from the 18 per cent registered in the fall .
 
Still the relative success of banks in converting all leads is something brokers will increasingly have to deal with. The same Maritz report suggests that banks have become more aggressive in reaching out to existing clients as well as potential ones.
 
In fact, that may have played a significant role in why those respondents who count themselves as “former broker customers” did not again consult a broker for their last renewal. A whopping 42 per cent said “the lender reached out to me directly,” explaining their choice not to go with a broker again. That’s up from even last fall when 36 per cent answered the same.
 
For brokers, the trend suggests they have some work to do.
 
“Here’s the problem,” says Essential Mortgages Agent Ron Alphonso. “Banks have a distinct advantage with A clients in terms of pricing power and, perhaps, a strong history with a client. Banks will always have a higher conversion rate than brokers with those clients. 
 
“What we need to do is focus on the B or alternative clients where we have an advantage over the banks.”
 
12 Comments
  • Broker 2013-05-29 10:25:30 AM
    IT would help if they played fair.

    When the branches offer products and terms not available to the broker Chanel for the same lender it sends a clear message. We need to support the mono line lenders as much as we can and any lender that plays fair.

    Why do we support TD and Scotia so much when thumb their noses at us on a consistent basis?
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  • Dr. Grammar 2013-05-29 10:32:27 AM
    "I explaining their chose not to go with a broker again" You would think that a publication would have some one proof read their copy.
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  • Ann T 2013-05-29 10:40:31 AM
    Given that most people have their investments through the banks and require deposit funds in the form of a draft, any decent bank teller will ask the client if they're buying a home & refer to a mortgage specialist right away. This gives them a natural advantage when it comes to conversion. Many clients have already been pre-approved through brokers giving the banks the leg up to better our rates.

    As brokers, we can't let mortgages become commodities. We need to add real value to convert our leads into clients.
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