Who would really be the No. 1 broker?

Who would really be the No. 1 broker?

Who would really be the No. 1 broker?

Last year’s No.1 on the Top 75 Broker list removed himself from the running this time around but believes, contrary to growing speculation, he would come out on top even if the criteria were altered to focus on profitability.

“Obviously I haven’t seen the bottom line results of other brokers, but I would guess we would be at the top of that list (if CMP measured profitability instead of volume),” Dan Eisner of True North Mortgage told MortgageBrokerNews.ca. “Maybe Jim (Tourloukis) and I should take a private moment to compare bottom line numbers.”

The idea of measuring profitability instead of volume was brought up by Jim Tourloukis of Advent Mortgage Services – this year’s No. 1 broker on the Top 75.

“A more interesting comparison would be to compare profitability, both in absolute and a margin basis,” Tourloukis told CMP in July. “When you factor in his lower margin… and his overhead… I’m not sure he’d be at the top. So you have to ask, which numbers really count?”

Eisner acknowledges his company’s model differs from the traditional broker model and, as a result, recused himself from the competition this year, arguing his participation would be unfair to the others.

“The rules are set up to measure a more standard business model,” Eisner said. “What you really need is a ‘No-Dan’ rule."

As for his decision to remove himself from the running this year, Eisner has no regrets.

"It was nice to read that the winners for the most part were supportive of our rights to choose our own business model and actually did want us to participate,” Eisner said. “They wanted to be inclusive and that is an admiral trait.”

Looking forward, will Eisner participate next year?

"Likely not. In 2012 we did $697 million, which is clearly above the top winner this year and next year it will be more,” Eisner said. “I think the way you guys have the rules, it seems fair in general, but when applied to us specifically it’s not fair to other competitors; we meet the rules of the competition but not the spirit of the competition."
 

20 Comments
  • Filomena 2013-08-14 10:26:51 AM
    Profitability? On $700M you probably took home 20 basis points due to your heavy buydowns. You have 9 locations where rent is probably at least $10K per month. You have say 18-20 staff at an average of $5K per month. Not to mention advertising etc.,

    Doing rough math at $700M you took home $1.4M in commission less: $1.08M in rent less $900,000 in employee salary, so already you're not profitable.

    So let's say maybe you squeezed out specials from lenders to get a nice VB from them due to volume promised. So even if you made 30, or 40, you're still not doing all that well.

    This is why your model of the store-front may be working for you from an exposure and build-the-DB level, but 10 years from now I just don't see you having the storefronts when commissions get further squeezed.

    Good luck.
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  • Richter 2013-08-14 10:44:53 AM
    @Filomena

    Or vice versa, where the average consumer is a guy/girl who has lived their whole lives with the internet and uses it to their advantage.

    Can anyone really deny the fact that the same mortgage from the same lender at a lower rate isn't better for the consumer?
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  • Ron Butler 2013-08-14 10:59:14 AM
    I will say emphatically that two character traits Jim and Dan share are honesty and business acumen.

    If they say they are profitable I believe them.

    The whole concept of the list is fine but it is not a full reflection of all the mortgage brokers in Canada. I know many massively successful brokers who do choose to participate in the list: that's their choice. As for profitability, who knows? I know a $250 million broker who produces 100% of their own business and does not discount a rate by a penny. I think they are likely very profitable.
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