The channel needs to actively reach out to colleges and universities to find better brokers – but also to convince those bright minds of the industry’s career potential – according to the head of one of the biggest monolines.
“I tried to convince my nephew to become a broker, but he wanted to go work in the bank instead – it is a matter of changing the perception,” Paul Grewal, president of Street Capital, said as part of the online forum Canadian Mortgage Hangout. “When we look at the future of our industry, we need to hire and recruit from the colleges and universities.
The comments may amplify the call to incorporate post-secondary education requirements for brokering, with some industry players viewing that as a way to amp up professional standards.
Grewal isn’t specifically endorsing any such requirement, but he is keen to bring more university grads into the market.
“We need to find out how to attract these bright people into the business,” he said. “And more than that, to make those who want to become brokers meet a higher standard.
“The bar has to be set high to obtain a mortgage license, and better ongoing education. It needs to be standardized across Canada.”
The current problem, said Grewal, isn’t centred around too many brokers in the channel, but not enough properly trained and competent ones.
“There’s a lot of discussion about too many brokers,”he says, “but how many times are you competing against other mortgage brokers? Brokers are usually competing against a bank.”
Urging brokerages and their networks not to contract but expand is something that can only be done through enhanced training and more investment within the industry.
“We need to expand,” he said. “But the right training is needed to expand the number of sub brokers and agents. It requires investment on the part of the brokerage – a mentorship program. We need more qualified training. Perhaps that requires a mandatory period under someone with the right experience.”
Street Capital has been expanding its presence in the Western provinces, opening a branch in Calgary just recently. It is this expansion and higher public profile that brokers need to incorporate too, he says.
“We are growing and are very proud of that. We needed to be local, and the real growth is in the Prairies,” says Grewal. “Our existing Vancouver location was too far away, so we made the decision to open the Calgary centre.
“We are seeing more and more brokers opening up storefront operations, and that is great,” he says. “Banks are always on the ground floor, not the 25th floor. I see brokers taking on that storefront operation, becoming a part of the community – the fabric of the community. I’m a big fan of storefronts, putting brokers on an equal footing with the banks. I’d like to see more retail brokerages.”
Street’s expansion includes the recent approval by the Canada Mortgage and Housing Corporation to be an approved issuer of NHA mortgage-backed securities and a seller under the CMB – a dual designation that “is of benefit to mortgage brokers, broadening Street Capital’s funding capabilities,” Grewal told MortgageBrokerNews.ca.
That approval is the next step for Street eventually gaining bank status.
“We made a strategic decision to become a bank,” says Grewal. “If we can offer more products to cross-sell, we can become more successful as a bank. And those products are not designed to compete against brokers, as they will be made available online, so they are cost-effective for us too.”