Brokers taking on the mantle of money managers

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More and more industry professionals are becoming informal investment advisers in addition to brokering, helping clients better balance their lifestyles and finances.

“I always discuss giving up little things to help pay off clients mortgages faster,” says Scott Dawson, with Verico Paragon Pacific Mortgages. “It puts things into perspective when you can compare it to something they spend money on almost every day – like your morning coffee.”
One such family, the Sharanewychs of Toronto, unilaterally decided to cut back on their entertainment expenses to help pay off their mortgage debt in 14 years instead of 25. The two teenage boys – featured in the Toronto Star last week – agreed to give up hockey and save $10,000 a year.
Not going on luxury vacations, shopping trips and deciding to watch Netflix movies at home instead of first-run shows at the theatre were all part of an overall strategy by the Sharanewych family to shave 11 years and $55,000 in interest off of their mortgage.
The family had appeared on the now defunct W Network reality show “Burn My Mortgage” in 2010, when they took on an accelerated mortgage and released the details of their finances, so as to better cut costs and live more economically.
“I created a blog post about how skipping the morning Starbucks can pay down your mortgage faster,” says Dawson. “I send that link to most of my clients. I find that once you break down the numbers for them into something simple it really hits home.”
In his blog, Dawson cites an ING Direct survey that shows only half of Canadians were able to put away an extra $25 a week – not realizing that some people making their daily trip to Starbucks are easily spending $5 or more on the luxury of a cup of coffee.
“By forgoing the morning coffee each weekday and saving $5 instead, you would save an extra $25 a week and put an extra $1,300 into your mortgage,” Dawson points out.
On a $250,000 mortgage with a 4.5 per cent interest rate amortized over 25 years, that savings can allow a homeowner to pay off their loan 11 years and nine months earlier, and save $72,496.91.
  • Christopher on 2013-05-21 9:28:37 AM

    I'm just as uncomfortable with mortgage agents in general being money managers as I am with the kids in the banks providing mortgage advice.

    It takes years of experience and a good deal of study; informal or otherwise to properly advise a client of how they should manage their money.

  • Ron Butler on 2013-05-21 10:29:01 AM

    I am also very dubious of mortgage agents and brokers giving investment advise or predicting the future of rates.

    What Scott is suggesting is neither of those things. He is wisely illustrating the lost concepts of budgeting and thrift. Paying down your mortgage faster makes a lot more sense than $7.00 dollar latte purchases twice a day.

  • Paolo Di Petta | on 2013-05-21 11:14:17 AM

    @Christopher - Mortgages are just part of the bigger picture - all of the components of money management overlap and it's important to give them good financial advice if we expect them to be able to pay their mortgages.

    Scott's Starbucks example hits the nail on the head - be aware of your expenses and prioritize. I'd say paying down your home is substantially important than a daily latte.

  • Eric Putnam on 2013-05-22 4:41:49 PM

    In Australia many professionals are doing both the roles of traditional mortgage brokerage and financial planning. At Debt Coach Canada our team believes mortgage professionals can truly differentiate from their competition and generate more referrals by assisting their clients beyond just arranging a mortgage. For that reason we have scheduled an upcoming workshop in Toronto. You can learn more at

  • Christopher on 2013-05-22 6:27:51 PM

    I've been in financial services for 37 years and have held both a securities and insurance license. I've also been in tax planning for the past seven years in addition to having been a mortgage agent for over 15 years.

    It's the ones with little or no training that can unwittingly steer their clients in the wrong direction.

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