CMP: Where do you see the industry at when it comes to broker/lender relationships?
Certainly with the scarcity of funds in the marketplace, the lenders have the ability to be a lot more choosey. And frankly, I think lenders have been beat up a little bit over the last five years. Now the tables have turned and they're in the driver's seat, which is why it's that much more important for us as brokers to understand what their business needs are so we can become a more profitable distribution channel for them.
CMP: How do you build lender relationships?
On a national level, we're working one-onone with our lender partners to talk to them about what they're looking for from brokers so it can get away from the 'us versus them' kind of relationship. I also challenge our lender partners not to paint us all with the same brush. Often I hear that "brokers do this badly" or "brokers churn their books." I would suggest that the good brokers in this industry don't practice this kind of negative behaviour, and I'd like to work more closely with our lender partners to help them weed out the bad apples instead of throwing out the whole barrel.
CMP: What tools does Axiom provide brokers to help them work more efficiently with lenders?
Our claim to fame has always been our technology, so we've worked hard to build a simple system for our brokers. If we have brokers who build deep relationships with customers, we'll deliver profitable volumes to lenders. For example, if you're a broker who cares only about the transaction, part of the problem is that as soon as someone's got a rate that's a nickel lower, a customer is going to ditch you. That means you have a commitment from a lender that doesn't fund, and the customer walks away thinking "my broker didn't do the best job for me." We work on helping brokers build one-to-one relationships with customers so that they don't have business that turns over very much. And our technology is focused on maintaining that relationship by doing things like sending out information-based, value added marketing pieces.
CMP: What qualities do you look for in brokers?
Ethics and integrity are the primary drivers, along with some business acumen. We want the right people, and that's pretty easy to tell from a sit-down interview and some reference checks. Quality is foremost to us, especially where statistics say that brokers, on average, submit any given deal to three lenders. Most of the good brokers would rarely submit to more than one lender, so if our average is three it means the bad are really bad and we have some cleaning up to do.
CMP: Looking to the future of the industry, where do you see broker/lender relationships heading?
A lot of lenders have already changed their compensation models and what they're telling us is that, as aggregators, we haven't been an efficient distribution channel for them. So I think the relationship has to get much deeper, maybe to a point where there's some profit sharing and, again, moving away from the transaction-based model and going to a relationship-based one. We also need to work together as a broker community to find the right answers and be proactive, not reactive - that's an important piece of the puzzle.
