Brokers are increasingly frustrated by these big bank referral programs.
It’s not just real estate agents sending referrals to the big banks, according to one industry player who is noticing a growing trend among other financial services professionals.
“Banks are now not only paying commissions to Realtors for bringing mortgage deals to them, but to financial planners and insurance agents as well,” Walid Hammami, a Quebec-based broker with Dominion Lending Centres
, told MortgageBrokerNews.ca.
It is unclear how exactly these referrals are structured. While it may be happening, it is not nearly as prevalent – or perhaps as formalized -- as Realtor referral programs, which have been in place for years. These programs have long frustrated brokers who believe they are self-serving and ignore a client’s best interest.
“They are doing their clients a disservice,” George Macris of CHDLA Mortgage told MortgageBrokerNews.ca, noting the agents send clients to lenders who offer fewer products than brokers. “It also often results in more credit checks for the client -- since the agents refer them to more than one bank -- which means more hits to their (rating).”
And while Realtor referrals are nothing new, it appears those agent players may be feeling a growing sense of entitlement when it comes to fees.
“When Realtors call me the first thing they ask is how much commission I will give them,” Macris said. “The agents expect and think they deserve the .5% commission from the banks; it’s not all agents, though.”
Most recently, many brokers felt snubbed when one of its own big bank partners sent an email blast
to British Columbia real estate agents soliciting referrals.
However, others note these agreements are perfectly legal and the prerogative of the big banks.