In 1975, after only months on the job, Ord did 111 deals. That’s 111 deals in one month when not even his mother was quite sure what a mortgage broker did. He wasn’t about to slow down for the heady days of the 1980s, often creating new products on the back of cocktail napkins 30,000 feet in the air. There have been many innovations in the intervening decades, among them creation of POINTS and basisPOINTS systems during his tenure at FirstLine, helping propel the broker channel to record levels of market share.
After 37 years in the industry, Ord is now an industry veteran and, having played an integral role in FirstLine, LSS, Mortgage Centre Canada, Mortgage Intelligence, Mortgage Architects, Radius (formerly myNext) and Filogix, he’s widely known as the industry’s innovator. Ord sat down with CMP to talk about the future of the industry he has no immediate plans to leave. In fact, he’s once again sketching out its future as chief executive officer for Invis-Mortgage Intelligence.
CMP: Why did you accept this new challenge with Invis/MI?
Ord: MI has been the apple of my eye and I’m delighted to be back at the helm. It’s an awesome opportunity to work with a group of really great people at both Invis and MI.
CMP: Looking at the banks and the new tighter lending guidelines, where is the broker channel headed, back to alternative lending?
Ord: The A space is getting smaller and there will be a new form of financing coming into the market in the next 12 months. We will see large growth in that space and some brokers will have to re-learn the business; they’re not just in this business to do Triple A. You hear a lot of angst and concern with how much these new lending guidelines are going to stop the market, but I’m not on that page. I believe what Flaherty and Carney have done is prudent. I look at it as an opportunity, not as a problem.
CMP: Some have suggested all of the big banks now in the broker channel intend to get out within the next five years. Do you agree?
Ord: This is a bigger issue than just the big banks leaving the channel. It’s about the historical creation of volume bonus, which was meant to reward efficiency and make the lenders more productive, but now the waters have been muddied. Volume aggregators jumped on the band wagon and recruited brokers at big splits while not providing core services such as compliance and with minimal control over their brokers. These aggregators are not managing broker efficiency, which has caused higher costs for the lenders. You have inexperienced brokers qualifying for volume bonus only because they have joined an aggregator, not for their own quality business and pull through ratios. The banks are the first to react to this because their primary distribution is their branches; they’re finding that their secondary channel has become too expensive so they are exiting. And there could be more backlash with the monolines as they too examine the whole volume bonus concept.
CMP: Broker network consolidation is on the minds of many, is this really the direction the industry is headed in. Why?
Ord: I don’t believe consolidation is necessarily the way it’s going to go. I believe there will be more brands rather than less and more brokers will be branding themselves down the road. Remember this is a relationship business; it’s not an advertising business. Its referral based and it will continue to grow because of that.
CMP: What are your thoughts on commission splits? Are they sustainable?
Ord: You get what you pay for. The really high commission split companies don’t provide services. When volume aggregation is finally eliminated, which I think you’ll see coming down the road, we’ll begin to move back into a good space.
CMP: Recently some high-level brokers packed up and moved to different broker networks. Will we see more migration and why?
Ord: I think it’s really short sighted. One of my friends got one of these offers and she said “I got this offer and I had to turn around to the other party and say ‘let me get this straight, I’m in a 50 per cent tax bracket which means I get to take home $100,000 of the $200,000 offered. I have 14 people who helped me get here so I would want to share it with them. The $100,000 works out to be about $14,000 a year on a seven year deal. That’s about three and a half deals in the Toronto market. You want me to lock myself in on a seven-year deal for three deals a year? Not to mention you charge my people an advertising fee every month: $213,000 over the next seven years and we can’t move!”
You’re getting this mobility today because it’s a tighter market and some people want the cash. There’s two great motivators in life, one is fear the other is greed.
It might be good for the broker in the short term but it’s not good for their people; I hope we don’t see much more of it.
CMP: You were pivotal in the development of Filogix. How is technology changing the broker business? For example, do you see it allowing the client to bypass the broker and go straight to the lender?
Ord: I don’t know how long Filogix will have the field to themselves. I think the movements in tech in the industry are going to be huge and I think there will be other solutions coming. But Filogix have certainly added value.
It has always been the rage to try and take out the intermediary, there will always be that element that wants to do business solely over the net and never meet anybody. But we’re at a point where we have that degree of complexity in the market that people want advice and they want choices.
CMP: This industry tends to skew to a fairly young demographic in terms of the age of agents and brokers. Does it still afford professionals the kind of lifetime opportunities you seem to have won or is brokering increasingly a stepping-stone?
Ord: We’ve gone from backroom, to storefront and now we’re moving to the second floor. The industry is moving more toward white collar every day. There will always be the ambulance chasers and the guys that say ‘can’t get a loan? Come see me.’ But I think there is more value to this so down the road this industry will attract more B Comms and MBAs because it’s an interesting and rewarding profession and it will get more interesting as we go forward.
CMP: You’ve kept your hand in the business. Is retirement something you’ve considered?
Ord:I have no desire to retire at this point in time, I’ve got too much energy, too much to give, and I just love this business.
CMP: Where do you see Invis MI going in the future?
Ord: We’re innovators and customer focused; MI was first brokerage firm in the industry with a CRM program. We’re going to put emphasis on having sophisticated CRM so we can reach out to our customers with both traditional and unique ways and with timely and sharp messages so we can bring more value and choice to our borrowers. In the last few years the banks have expanded their sales forces and we need to counter that through CRM. Our business is built on CRM and our brokers’ databases and referral sources, not through advertising. Our immediate focus through our marketing and CRM will be to extricate our clients that we faithfully placed with FirstLine, which at one point was the ultimate broker advocate. Strong CRM with relevant and persuasive messaging will keep our brokers’ businesses growing regardless of market conditions.
Where in the world is Bob Ord:
A 37 chronology
1975 Progressive Funding Group
1976 KCR Investments Western
1977 KCR investments (Alberta)
1978 Title Mortgage Corporation
1984 First Western Trust Company
1987 First Western Trust purchased by Counsel Corporation
1987 First Western name changed to FirstLine Trust
1989 FirstLine starts Mortgage Centre FirstLine
1991 Mortgage Centre FirstLine buys Equity Centre and becomes The Mortgage Centre Can.
1992 FirstLine sold to Manulife
1993 Ord gathers the founders of CIMBL
1995 FirstLine sold to CIBC
2000 Ord becomes EVP Filogix and starts Mortgage Intelligence
2002 Mortgage Intelligence sold to GMAC
2006 Ord appointed CEO of myNext Mortgage and Mortgage Architects
2012 CEO Invis/Mortgage Intelligence