For one broker it’s the elephant in the room that no one wants to talk about: the fact that the industry continues to fight banks on rate when it is clear it can no longer do so successfully.
“Everyone who joined the industry from 2002 to 2008, got into the business, primarily, because you had the ability to shop around and guarantee your clients the best rate possible,” says Peter Kinch, founder/owner of The Peter Kinch Mortgage Team Dominion Lending Centres in Vancouver, who will be hosting a panel at The Mortgage Summit entitled, What’s Your VAP.
The panel of top experts will include Calum Ross, Greg Williamson and Dustan Woodhouse and Kinch says he will be challenging them to share their insights as to what brokers need to do to add value moving forward. According to Kinch, the value-added proposition for a great majority of brokers was rate.
“Since the sub-prime crisis, that has been changing and offering a better rate isn’t good enough anymore. I believe that we have now reached a point where every bank will soon be offering a discounted rate that beats the best a broker can offer.
“So, if that’s what you learned and that’s how you’ve gotten to this point, how are you going survive if you can’t offer a better rate?”
The majority of mortgage brokers are still fighting the rate war, even though they say they’re not.
For Kinch, the million-dollar question is: what extra value do brokers offer that make it worthwhile for clients to pay more a month for the privilege of working with mortgage brokers.
“In my opinion, if you can’t answer that question, you will be out of business in a year,” he says.
In his case, Kinch says his value-added proposition has been niche marketing.
“I work with real investors and educate them about the big picture so they can avoid mistakes later in the process. I ask my clients, ‘Do you want to accomplish your goal or do you want to save $50 a month.’
“My clients value the education that I offer them and they can’t afford not to use my services, because they can’t afford to get bad advice. So price is no longer an issue.”
Click here for more information and to register for the Mortgage Summit.