A poll asking brokers whether they’re more inclined to send a deal to a new “broker-owned bank” than an existing lender partner had a quarter of respondents answering “yes” even before receiving any details.
“Brokers traditionally work with monolines who don’t have the products a bank can offer,” Brian Matthey of Verico The Mortgage Professionals told MortgageBrokerNews.ca “If, all of a sudden, you have a mortgage lender who can offer deposit products, loan products, unsecured products, financial planning – the services provided by a bank – brokers may be more inclined to give them business.”
“Having a broker-owned or directed bank will hopefully offer niche products,” Matthey continued. “Every lender has a myriad of products – you can dress it up but it’s about the service the lender provides.”
Still, some industry players are leery.
“I wouldn’t necessarily favour a broker-owned bank over one of my existing lenders,” Mark Cashin of Dominion Lending Centres Central told MBN. “The reason: Our number one job is to get the best product for the customer and that is the pinnacle of our focus; we have to find a product that fits their life goals.”
For brokers, finding the right deal for their clients often means working with lenders they are comfortable and familiar with.
“I work with partners that I can work with; that allow me to get the deal done and most banks have all these little idiosyncrasies that you have to get used to or figure out,” Cashin said. “It’s always better to work with a partner who will work with you to get a deal done.”
However, as mortgage professionals become better acquainted with how broker-owned banks operate; they may be more inclined to do more and more business with them. It’s all a matter of developing new habits.
“Once people get familiar with the product and they understand it better, they will develop a habit to work with the lender,” Cashin said. “The toughest thing with humans is breaking habits. Trying to move any agent or broker or something as simple as losing weight, a lot of it has to be developed.”
Perhaps a similar poll will return even more favourable results for broker-owned banks as brokers become more accustomed to these lenders and what they can offer – especially if they can effectively marry the bank and monoline models.
“What’s relevant is if the broker-owned bank has competitive products and niche products that aren’t available out there and if you can potentially own a part of it, that may be the impetus for brokers to give them a look,” Matthey said. “No one is going to give all their business to one entity, but there is an impetus for brokers to give them some of the business and see where it goes.”