Brokerage head outlines benefits of independence

by |
Robert (Bob) Gascon
Redwood Mortgage Corporation
Mississauga, Ont.

What are the advantages of being an independent brokerage?
In my case, the advantage is I am one of one rather than one of a thousand. All of my marketing and all of my efforts flow right back to me. If I am a member of a large group I can be advertising for someone down the street.

What is the secret to building a successful brokerage?
The secret is relationships, relationships, relationships. I will stack my relationships against anybody’s technology any day because people deal with people they trust, that they’re comfortable with, who are competent and who provide good service and good knowledge.
You must put out a very clear message that says who you are, what you do, what separates you from the competition and where you can be found.

Have you considered joining a large network?
No. Because large networks and franchises have not convinced me that they can drive enough business to my door to offset the cost of signing onto their network.
How do you think independent brokerages can continue to thrive in today’s market?
By building a relationship-based business model.
There are people who are in the franchise business, there are people who are in the agent business and there are people in the mortgage business. There will be successes and failures in any model. One size does not fit all; some people are comfortable being on their own and some people are comfortable in a franchise environment.

What advice would you offer to brokers who would like to set up an independent brokerage?
Make sure that you are well-capitalized, make sure that you have a business plan and marketing plan. Because the M in mortgage stands for marketing and it is very key that you know what you’re going to do when you open your doors and go to market with a relationship-based model.

What is your strategy for generating new business?
Database marketing: Direct mail to clients that I have dealt with in the past. 95 per cent of all the business I write is for a client I have had a relationship with in the past, or someone an existing client has referred to me.

What is the most important thing a broker can do to grow their business?
Build relationships and build long-lasting relationships.
You also have to become knowledgable about changes, to become an expert, to be able to offer A-business, B-business and C-business and be an expert in all those areas, to be a true professional and expert.

What trends have you noticed this year? Have you had to adapt your business strategies to the market conditions?
We had to move a year ago to the B market from the A market because we are not discounters. We don’t buy-down rate so we’ve moved to alternative lending.

What are your goals and strategies for the years ahead?
Our goals and strategies are to continue to work in the alternative A and B markets and focus less on A business. We also, in the last year, launched a mortgage administration company that provides a platform for private lenders to run their business on.

Have you diversified outside of mortgages? If so, how have you incorporated this into your business?
No, absolutely not. The reason for that is people come to me because I’m a mortgage expert. They don’t come to me looking for chequing accounts, GICs, banking products; that’s not the identity I wish to project. I am a mortgage broker and I do one thing very well.

As an independent, what extra pressures do you feel surrounding volume bonuses? Is there any loss of diversity of product as a result?
I don’t look at volume bonus as a make or break on my business. I don’t base my decisions on how much money I’m making on a file. I’ll trade that for my independence.
  • on 2014-04-23 2:34:24 PM

    Agreed and very well said Bob. We are a small boutique commercial mortgage brokerage in BC - now in our 17th year!!

    Our business model is also based on relationships as well as maintaining a high level integrity and professionalism at all times.

  • Philip Slen on 2014-04-23 5:07:53 PM

    I congratulate Bod and all those independent brokerages out there for making a success on their own. It is not easy to be a standalone in current brokering environment for new entrances: min volume requirements, VB, lender status, etc. I agree 100% it's a relationship business. Your customers and referral sources deal with you because of you. The nature of mortgage brokering starts and ends with the relationship the broker/agent establishes with his/her customers and referrer sources. If your potential customers do not trust and believe you can help them in the manner they want, it does not matter what brand stands behind you. First and foremost, you are the brand, you are that relationship.
    The assessment of whether to join a large network and what value that could bring is correct; it is very different for different individuals. Once a brokerage (independent or network) has reached a certain size/volume, the disadvantages of being independent vs large network really reduces, there is no competitive advantage or disadvantage one way or the other. It just comes down to preference of how one wants to run his/her business.
    And independents need to know they are not alone from a technology perspective. They now have access to the most advanced independent technology platform to support their business and growth. You have choices from a few service providers. Simply compare and find the one that best meet your business needs. We have developed a system unlike any other in the Canadian mortgage industry. Simply click on the purple banner at the top of this article to find out.

  • Shocked on 2014-04-23 5:47:07 PM

    Isn't DLC facing a potential lawsuit in relation to this story?

    Why didn't BrokerNews mention that?

    Read this:

    And why didn't BrokerNews allow comments on this article??

    Is it because you don't want to say anything bad about DLC and Gary Mauris? Are they a big advertiser or something?

    Be honest with your readers.

    Let people comment on this story.

  • Ron Butler on 2014-04-23 6:22:24 PM

    @ Shocked... you are a vile internet troll.

    What this is about is a horrible tragedy. Have some simple human mercy for the poor family who went through this ordeal and the business associates who are left to pick up the pieces.

    None of the allegations have been proven in court.

    It would not matter if this case was about someone associated with DLC or Verico or TMAC or Centum or any other firm. These stories (and there is a variation on the same theme every quarter somewhere in Canada) represent individuals who may make wrong decisions and bad mistakes that have NOTHING to do with their networks. So why even bring it up. I respect the fact MB News closed the comments on that story, it's a awful, sad, tragic event and while am also very sorry if investors were duped, this is a terrible price to pay if that's true.

  • Paul mangion on 2014-04-24 1:58:54 PM

    Ron is right. DLC cannot micro manage every agent. This broker could have been working with anybody. The fact that the lenders took a promissory not for a mortgage is ridiculous. Many investors do more research on a toaster purchase than they do on there investments. That makes predators job easier. Think about our business. Whether your a Realtor, mortgage broker or financial planner you will always have people that put there wallet first over the client. It is in our piggish nature and those that flock to this industry for a quick dollar always make the real mortgage brokers life difficult. If I am not willing to invest in a project then why would I expect another investor too? I would love to see bigger fines and more termination of licenses for the people that harm our industry.

  • Ron Butler on 2014-04-24 2:31:56 PM

    @ Paul, unfortunately, although no allegation has been proven; clearly there was the highest possible penalty paid in this case. Every situation is different, I do not blame the investors, likely they had good results over a long period of time and simply trusted the person that the good results would continue, just like every other Ponzi scheme.

    I have had 20 year relationships with investors and if I suddenly told some of them to bring in $200K cash and I gave them a hand written receipt for a bridge loan they would do it. Trust is trust. It is always horrible when trust is betrayed so even attaching slight blame to victim is a wrong approach.

    I have learned this over the years; you cannot legislate control over bad intentions . No set of rules or fines or even criminal prosecution will stop someone once they make they choice to go down the wrong path. It is true in our business, it is true among lawyers, realtors, stock brokers, bankers, the list goes on.

    Governments increase regulations and add restrictions in an attempt to curtail fraud and sharp dealings. I don't blame governments for that approach but in the end massive compliance mandates will never stop the person who decides to commit fraud, they will always find a way.

  • on 2014-04-24 2:42:50 PM

    Ron, you are correct. If someone wants to commit fraud, no rules or regulations will come in the way.

    Parties willing to engage in fraud will find a way or at least try and find a way.

    This then leads to added layers of paper work and due diligence for the rest of us.

  • Paul on 2014-04-25 1:29:11 PM

    I worked for a small independent in Pickering who all but went under. Told a good story to get people on board but at the end of the day he had no business plan, nor did he know what he was doing aside from the mortgages. Not capable of running a business or making a business model. One day he was A, the next B and so on. It was a joke so like everyone else I got out of there.

Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions