With a slowing housing market and lenders slashing compensation, the channel will likely see more brokers opting to go independent rather than work under large broker networks as a way of cutting expenses, according to one mortgage professional.
“I find that some agents who go with large networks often end up saddled with huge expenses,” said Paolo Di Petta, an independent broker for EQRON Mortgage in Toronto. “I think some agents are better off tackling things by themselves or working with a smaller broker who can give one-on-one training,”.
As the market continue to slow down and tighter mortgage rules dampen consumer appetite, many new agents, in particular, wil reduce their expenses by moving away from the large broker network model, Di Petta said.
Those costs include monthly fees for the of proprietary customer relations management systems and advertising and training can easily run up above $1,000 a month, he said, yet provide very little in terms of business benefit because they are “cookie cutter” products and services.
“It all depends on your business model,” said Di Petta. “Not every broker’s business is the same and all too often the stuff big networks offer does not have the flexibility agents require,”
For instance, many advertising fees charged by large networks are at a fixed cost, he said. There is no flexibility to reduce the amount in case the agent has encountered a rough patch and is short on cash.
De Petta also said some network sale training programs are heavily brand focused.
“The programs concentrate on selling the network’s products rather than developing useful sales skills,” according to the independent broker. “I think some agents would better off working with a broker who can offer one-one-one training.”
That said, De Petta admits going independent is not for everyone.
“It depends on your business model and character,” he said. “So brokers feel they need the support of a large company others excel when given full rein over their own business.”