“Clearly this is a very positive sign for our industry. We all know that many of our Lenders rely on strong relationships with financial institutions as investors and funders,” John Kelly, chief operating officer for VERICO told MortgageBrokerNews.ca. “ The investment B2B Bank is making in VERICO Canada is in this context and provides us with more depth and resources to pursue our expansion plans in the coming years.”
Specific details of the deal have not yet been released but MortgageBrokerNews.ca spoke with Kelly for more on the investment.
CMP: What are the plans for the future, now that an influential backer has come on board?
Kelly: VERICO Canada is committed to developing new and innovative opportunities for our Members. This means collaborating with our all of our lenders to construct and deliver new banking, insurance, and investment cross offers that differentiate and enhance our brokers’ value proposition to their customers. It’s a progressive evolution that will ultimately enable our brokers to broaden their business scope and profitability. The B2B Bank relationship is intended as a key and initial proof of concept on this strategy.
VERICO has just launched BRINCO Insurance to the network. This is also an important step in ensuring our brokers can expand their business to include life and property insurance in the future. The common objective is more points of profitable connection and relevancy with their customers.
CMP: What does it mean for the broker industry as a whole that a lender has chosen to put money back into this side of the business?
Kelly: It’s no secret that the vast majority of the mortgages in Canada are manufactured by Canadian banks, trust and credit unions. Consequently the Broker channel, and most monoline lenders serving our channel, rely on these Banks to supply us with loan products. So I think almost all industry stakeholders would view any financial institution investment in the mortgage broker channel as a very positive outcome.
CMP: Are these sorts of partnerships going to be more common as the broker networks fights for market share with the big banks?
Kelly: I would think so. To compete and win in the future will require investment to drive the innovations that will deliver lasting advantages. It is very likely that there will be continued cross investments among and between banks, monolines, brokers, and national brands.
CMP: What role will B2B play in determining the future of Verico?
Kelly: We intend to collaborate on certain niche product innovations with B2B Bank, but generally the future of VERICO will remain determined by our management team, namely Colin Dreyer, myself, and our National Advisory Council.
CMP: Will Verico brokers be given certain privileges when working with B2B?
Kelly: Of course. But I want to be very clear that the structure and nature of the relationship between VERICO and B2B Bank is merely financial. There is no locked in bias here, and B2B Bank will provide the same competitive mortgage products to all brokers in our industry. Similarly VERICO will continue to represent and promote the competitive mortgage and banking products of all of our other lenders. That being said, we do intend to develop niche products that deliver specific and exclusive advantages to our members.
One of Canada’s largest lenders has made an equity investment in one of the industry’s major broker networks which, according to the players involved, is a positive sign for the industry as a whole.