With several brokers holding shares in the new parent company of MonCana, many are calling it Canada’s first broker-owned bank – something exciting brokers from one end of the country to the next.
A broker-owned bank is “exactly what it is,” Peter Majthenyi of Mortgage Architects told MortgageBrokerNews.ca. “We’re not re-inventing the wheel here; all you have to do is go to the Queensland Bank of Australia – they sold the bank to brokers and once the brokers take ownership of the branch, the momentum or the degree of involvement changes significantly.
“They have had huge success with mortgage brokers opening their own branches and cross-selling different kinds of products, more than just mortgages.”
And that’s the key to growth within the industry, according to Majthenyi, whose own brokerage offers Canadian First financial advisory services.
“The stats are very clear: once you get your client into 2.5 to 3 products, you own the clients; you own 80 per cent of their wealth,” he said. “The client will convert all of their financial relationships to you if you have three of their core products – such as a Visa, checking account and mortgage – the probability of that client doing banking elsewhere drops significantly.”
The merger essentially makes it possible for more brokers to offer that service.
“Brokers can do more for their clients and get compensated more as a result,” Majthenyi concluded.
For his part, James Laird of True North Financial is optimistic the two entities will create a viable option for doing business.
“The management of both institutions have shown that they appreciate the broker channel and view it as a profitable way to do mortgage business,” the Toronto broker told MortgageBrokerNews.ca.
And it’s no secret brokers will be more willing to support a business that supports them.
“Whenever there is a comparable product at two institutions, it’s best to choose the one that is more dedicated to the broker channel in the long term,” Laird said. “It’s looking like this new entity is going to be dedicated to the broker channel in the long term, so as a broker, it’s important that we support institutions such as this.”