Industry Advocate
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21/07/2010 10:01:00 PM
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Garth Ellis says the biggest risk he ever took was becoming a mortgage broker 15 years ago. He was 25 at the time, fresh out of university and enrolled in a securities course when he bumped into an old school friend who had started a mortgage business six months earlier.
Knowing someone in the industry made him change his mind about becoming a stockbroker, but what he didn’t realize then was how foreign the concept of using a mortgage broker was.
“It was a totally new word in the vocabulary of Canadian finance,” says Ellis, who lives and works in Vancouver. “So becoming a mortgage broker in the first place was a very blind decision. A lot of people thought I was crazy.”
It turns out his risk-taking wasn’t so crazy. Despite the many challenges Ellis faced as a mortgage broker in the mid-90s, he remained patient and confident in his career choice and now he’s one of the most respected brokers in the industry, often sought after for advice and speaking engagements.
He has also served as MBABC’s director twice (in 2005 and 2007) and won the Mortgage Broker of the Year award at CMP’s first Canadian Mortgage Awards in 2007. And even though he is far from the end of his career, his industry contributions led him to receive the lifetime achievement award at the 2010 Canadian Mortgage Awards.
“Just because it’s a lifetime achievement award doesn’t mean the person has to be retired or out of the industry – it’s for someone who sets the bar high for the brokerage community and who keeps promoting it,” says Sebastien Kuperhause, national sales manager at National Bank, who presented Ellis with his award. “In terms of integrity and how to conduct yourself as a broker, Garth is a great example.”
Learning by doing
Ellis spent the first several months of his career working with the friend who introduced him to the mortgage industry before branching out on his own. But the clients didn’t come rolling in – not even close – so the first order of business was finding anyone who could refer leads and help him learn the ropes.
“There really wasn’t any structure in the form of education back then, so you just learned by doing,” says Ellis “It was like being a 19-year-old pitcher in the World Series – they’re out there and they’re so young and naive and they don’t know any differently than to just go out and perform.”
To learn about the business of mortgages, Ellis spent most of his early days contacting Realtors in the area and attending open houses, especially during slower times and on weekends. While he lost money during his first two years in business, he started to see a foundation of clients and referrals forming at the end of the second year. He also wore a suit to work every day even when he wasn’t making money.
Throughout those early days, Ellis says the biggest challenge was changing the mindset of a bank-focused public.
“When I started, statistics showed only four per cent of people used a mortgage broker and a lot of that was subprime or B business,” he says. “People thought brokers were a scam, and since you didn’t have the good word-of-mouth from the public, brokers themselves had to spread the word and build a good reputation.”
As he progressed, Ellis began to see the value of client referrals over referrals from outside sources. He also concluded the role of a mortgage broker is three jobs rolled into one – an outside salesperson who gets business in the door, an inside salesperson who focuses on customer service and selling the product, and an underwriter knows bank policies and how to package an application. It was this division of labour – or “specialists rather than generalists” approach – that Ellis has built his business on and he now has employees working in three different departments, each with one of those three responsibilities.
In the 15 years he has been in business – on his own, with Invis, and then with Verico starting in 2005 – Ellis says his company has serviced more than 12,000 mortgages and he still counts efficiency as his top priority in working with both borrowers and lenders.
“Garth really has mastered the art of client retention and referrals,” says Jessi Johnson, a Verico broker who counts Ellis as one of his mentors. “He has set up an advanced structure of business that really focuses on getting the customer the best service.”
Mentoring and giving back
Because he didn’t have a lot of experienced brokers to turn to for advice when he was starting out, Ellis was happy to see the formation of industry groups and joined both MBABC and CAAMP at their inception. He also gradually stepped into the role of a mentor and industry expert, speaking at industry events and taking on the task of drafting and teaching MBABC’s two-day Applied Information Course (AIC) for new brokers – a job he just retired from this year (“my techniques are a bit dated,” he says with a laugh).
It was at the one of the MBABC courses that Jessi Johnson first met Ellis when he was looking for more information on becoming a mortgage broker. He said watching Ellis speak about the business and dole out advice helped him make the leap to self-employment, and he still calls him for advice on his growing business.
“What blew me away the first time I called him was the fact that he is such a busy guy and he went out of his way to sit down and walk me through some issues I was having,” says Johnson, who is now involved with MBABC’s education efforts. “Now when people in the industry call me for advice, I always call them back and that has a lot to do with Garth’s influence.”
Rob Regan-Pollock, a senior mortgage consultant at Invis, also drew on advice from Ellis when he was working on growing his business in the late ‘90s. The two met in 1995 and started their companies at around the same time.
“Garth seemed to be more in the know about systems and he was always willing to share his insights,” says Pollock. “I remember Garth once saying to me, ‘hey RRP, you look tired buddy – why don’t you stop revving out in first gear and get an assistant and switch to second gear?’ So I asked questions and soon started to acquire assistants. Since then we’ve grown steadily and we’re one of the top teams with Invis in the country.”
Ellis’ advice for new brokers has stayed constant throughout the years and he says it’s based on simple business principles.
“No. 1 would be to listen to those who have experience in the industry and capture that knowledge; two would be to develop a real passion for mortgages and understand the responsibility that comes with doing this job; and three would be to always focus on goals – if you can’t measure how you’ve done in a day, then that’s a waste of a day,” he says.
And although he is considered by many to be a mentor, Ellis says he still turns to some of his mentors today, including Colin Dreyer, president and CEO of Verico.
“The great strength of the industry right now is the intellectual capital and experience of people who have been around for awhile,” says Ellis. “It’s a constant legitimization of the industry – we have a lot of leadership and brainpower that we didn’t have when I first started and that grows every year.”
Looking forward (and back)
The biggest changes Ellis has seen during his years in the business is both growth in broker share of the market – around 34 per cent according to CAAMP – and an increase in broker compensation. The average mortgage in Vancouver has also increased from $100,000 to almost $400,000.
“In my first couple of years in the industry, I’d make more in a night’s tips working at a restaurant than I would from a return on a mortgage, because you’d only get paid 50 or so basis points,” he says. “The increase in income has helped me grow my business, hire staff and help more people – that’s been the really exciting part.”
Looking ahead, Ellis thinks the mortgage industry is going in the right direction, especially with more lenders focusing on efficiency. He also says he sees a new generation of brokers who are “very committed to their practices” continuing to build a good name for the industry.
“The future is very bright,” he says.
As far as his career goes, Ellis says he now spends most of his time managing and brainstorming ideas about his business than working directly on client files, something that has allowed him to contribute back to the industry. It also means he has more time to spend with his wife and two children, who he calls his “favourite people to spend time with.”
And although Ellis received the lifetime achievement award at the 2010 Canadian Mortgage Awards, it’s clear that his time in the industry – the industry he entered on a whim 15 years ago – is far from over.
“It’s interesting to think that this might be my first and only career,” he muses. “I have no ambition to go into anything else, so I could be here another 20 or 30 years longer.”
Quick Q&A with Garth Ellis
Toughest challenge? Having to learn by doing – there weren’t a lot of people with mortgage broker experience or education to look to, so that was difficult and that’s why it took me so long to get going.
Unfulfilled ambition? I still want to see where the industry can go and how much broker marketshare can increase.
Biggest risk you ever took? Most of the decisions in the latter part of my career have been calculated risks and I could base those decisions on my experience. That said, the biggest risk was to become a mortgage broker in the first place.
If you weren’t a broker, what would you be doing? I’d probably be a stockbroker.
Hobbies? Spending time with family and friends, watching sports, playing basketball (even though the opportunity to dunk gets harder and harder each year).
What words would you use to describe yourself? Very happy but not content – I want to continue to move forward to see what uncharted territory we can achieve within our business.