Brokers diversify by providing consumer credit

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It may seem ironic to some, but many brokers believe offering consumer credit card products is one of the most effective alternative revenue streams a player can add to his business.

“You can take the high road and say that people have too many credit cards and too much consumer debt or you can take the ‘if you can’t beat them join them’ approach,” James Robinson of the Mortgage Centre told “We’re not here to be the moral police of people; if people are going to have credit cards and use them it certainly can’t hurt for us to provide the same kind of advice for our customers as we do on mortgages in terms of selecting what the best one is.

“We find ourselves constantly counselling clients on how to manage their credit so I think it’s a natural extension.”

Brokers often criticize the government’s focus on reining in mortgage debt as opposed to credit debt. This past December, the Bank of Canada stated that consumer debt is one of the greatest burdens on the Canadian economy and announced that Canadians currently carry a total of $1.5 trillion in debt.

And yet 22 per cent of respondents in a recent survey said they have already diversified by offering consumer loans are credit, and 43 per cent admitted they are the best fit for mortgage brokers looking to diversify.

Other options included syndicated mortgages, insurance, and financial advice.

Robinson, himself, has not yet diversified his business to include alternative revenue streams, though he has admitted to researching possible areas to expand into.

Others have shied away from diversifying in fear of becoming a “jack of all trades and master of none”.

“My problem with diversification is that you’re not a specialist anymore,” Mike Maguire of Mortgage Wise Financial told “Diversifying into other areas doesn’t make sense; I used to sell mutual funds as well as mortgages but it’s hard to stay up-to-date on more than one industry.”

Maguire does, however, see the benefit of offering consumer credit products.

“Consumer credit products relate to mortgages -- debt is debt and I think it’s just an easy sell,” Maguire said.
  • Gord Appel on 2015-01-30 1:48:10 PM

    There's the specialist vs generalist argument but what about the "Broker vs Rep" argument? It's important for you to offer choice to your clients on mortgages but when it comes to other products like credit cards, one size fits all? Just curious but how do we justify, or is revenue diversification more important than our value proposition?

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