Brokers are feeling uneasy with the number of mergers taking place in the industry recently, voicing concerns that a shrinking pool of lenders may nullify their competitive advantage.
“All these lenders amalgamating and buying each other out is the biggest concern I have about the industry right now,” Mackenzie Gartside of Verico Select Mackenzie Gartside & Associates told MortgageBrokerNews.ca. “The number we have access to is shrinking and, as a broker, flexibility is one of my selling points."
However, mergers may have a positive effect on product offerings, say other industry leaders.
“Mergers may be a good thing in terms of the power the lender has in the market and their ability to offer better products through the channels,” Dalia Barsoum of Centum Streetwise Mortgages told MortgageBrokerNews.ca. “As much as people freak out and think it will decrease competition, I always look at it as a way to bring better products and services to the brokerage channel. It’s too early to say what will happen to product offerings (but) I’m not concerned about that kind of movement.”
For other brokers, it’s a different kind of merger that is causing concern, with one particularly concerned about the amalgamation of mortgage brokers.
“(With so many brokerage firms merging), the Re/Max of mortgage brokers will come out of this,” Keith Waters of CYR Funding told MortgageBrokerNews.ca.
Waters believes the best way for smaller firms to set themselves apart from the larger consolidated brokerages is to specialize – a tactic that has worked well for him.
“Smaller shops have to find their niche,” Waters said. “60 to 70 per cent of my business comes from brokers who aren’t specialized (in the areas the clients need).”