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.”