Mortgage brokers have yet to clear the “biggest hurdle” standing in their way, according to the latest CAAMP-Maritz consumer survey, pointing to less than 10 per cent of respondents who really understand exactly what it is they do.
“It is very difficult to sell anything if consumers don’t understand the offering and this may be the biggest hurdle standing in the way of future success for Canada’s mortgage broker channel,” reads the report, based on consumer and broker surveys and released this week.
That may be an understatement.
In fact, the poll results indicate just 5 per cent have a full appreciation of the function of mortgage professionals, with only about a third of respondents indicating they have a good understanding.
“The importance of seeing these numbers increase cannot be overstated,” concludes Maritz, pointing to greater broker penetration among consumers who understand the services they bring to the table.
Broker market share is 50 per cent higher among the 40 per cent of consumers who have a full or good understanding of broker services. That translates into a market share of 32 per cent, compared with 21 per cent among those with a lesser understanding.
“When we asked non-broker customers why they did not consult with a broker, the top reason was loyalty to my bank, followed by four reasons relating to lack of awareness of broker services.”
The broker channel is expected to formally address its public awareness challenges in 2012, with growing support for a 1 bps fund.
“If every broker was to contribute one basis point that would equate to $5.5 million to $6 million a year,” Merix head Boris Boziche told brokers this fall, as part of “Winning the Rate Wars,” a webinar hosted by industry trainer Greg Williamson.
That “every broker” is the more than 15,000 mortgage professionals plying their trade across both regulated and unregulated Canadian jurisdictions. That “1 bp” would come off of each and every deal a broker submits and closes.
Those collective funds would get funnelled into a marketing campaign both paid by and focused on promoting mortgage brokers. That idea continues to gain traction as the industry grapples with increased competition from the banks and a slowing real estate market.
“I agree with Boris that mortgage brokers need to pay for this initiative,” said Williamson, head of 180 Degrees Coaching. “The great people at Dominion Lending pay to promote their brand nationally and I suspect they are happy with the results they are getting. We all pay to have the AMP designation promoted nationally why should we not promote the concept of using a mortgage broker and more importantly what we do.”