“People are now more knowledgeable about mortgages and are looking for someone who can help them select a mortgage that fits their specific needs,” Janet MacIver of the Mortgage Centre told CMP in its latest issue. “They are looking for more personalized service and someone who is knowledgeable about mortgage products; it’s not always about a 5-year fixed rate mortgage. They’re concerned about the pre-payment options and what penalties may be associated with the possibility of breaking a mortgage.”
CMP recently asked brokers if they can compete on bank “relationship pricing” and the results were optimistic.
However, brokers realize they can’t always beat banks on rate and that the key to winning back market share is in advice and expertise. And these promotions get the conversation started with clients.
“Knowing the profitability of the entire customer relationship means banks will continue to match or beat rates for top clients, so competing on price alone is not a sustainable competitive advantage in the broker channel. In order to overcome relationship-priced selling, brokers must differentiate themselves; without a unique value proposition, individual mortgage professionals are a mere commodity,” Andrew MacDonald of Verico Calum Ross
Mortgage told CMP. “Start by asking ‘how can I use my combination of skills and knowledge to create value for the client and enable me to compete in an area where I can earn a good living?’
“Too many mortgage professionals try to be all things to all people so consider what value you can offer that the average bank representative cannot.”
The discussion is as important now as ever, with The Royal Bank
of Canada currently offering employee pricing to its customers until July 3, including a five-year fixed at 2.69 per cent, making it the lowest advertised rate by one of the Big Five.
Many brokers scoff at bank “relationship pricing” but at least one professional believes they are creating a more informed public: Which will benefit the broker channel.