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The Big Story: Is it time for monolines to take their message to consumers?

It happens more often than you think.  A broker names a non-bank lender and the client asks “what if they go out of business?” While brokers say a direct appeal by mono-lines to consumers would only strengthen industry credibility and counter negative perceptions about its lenders, the monolines say the idea has merit, but only if everyone in the channel gets on board with the plan. On today’s Big Story, we spoke to Gino Tieri, VP, Sales for MCAP, Blair Anderson, broker/owner of Anderson Associates Mortgage Brokers, Kelvin Seepersad, mortgage agent with Mortgage Intelligence and Paul Therien, director of business development for Centum Financial Group. Find out on today’s The Big Story, on TV, your home for industry news, opinion and analysis.

Video transcript below:

John Tenpenny, Mortgage Brokers News TV
John Tenpenny:  Hi, I’m John Tenpenny, Editor of CMP Magazine and welcome to the Big Story on Mortgage Broker News TV.

It happens more often than you think, a broker names a non-bank lender and the client asks what if they go out of business.  Some brokers say direct consumer advertising by the MONOLINES would only strengthen the industry and counter negative perceptions. Some lenders say the idea has merit, but only if everyone in the channel gets on board.

Gino Tieri, Vice-President Sales, MCAP 
Gino Tieri:
 I think it that when it comes to advertising from the MONOLINES directly to the consumers start to profile the broker channel.  I think from one lender’s perspective it’s extremely difficult and challenging.  If we could come together as a group entirely in the entire broker channel itself of all the MONOLINES supporting, taking maybe some of that compensation that’s paid out there, we could come up with an effective campaign to get out to the Canadian consumer and drive the awareness and build that up even further to drive further revenues.  I think one thing that we have to keep in mind is that as a lender the resources are not readily available from just one MONOLINE, again that it has to be a group effort in order to be successful and the onus on us as a lender is to provide the tools and the resources in order to promote credibility of MONOLINES.

John Tenpenny:  Brokers however feel something should be done otherwise it falls to the individuals to sell the unique value of MONOLINES to the consumer.

Kelvin Seepersad, Agent, Mortgage Intelligence
Kelvin Seepersad:
 I think it’s time that the Monoline lenders advertised directly to the consumer to uplift the broker channel.  Every day you see on TV or hear on the radio the big chartered banks advertising about their road reps.  This is certainly bringing awareness to the consumer.  When it comes to Monline lenders, there is little or no advertising.  So it’s left up to the individual broker to sell the unique values that these lenders bring to the consumer.  We are all fighting for market share but it’s not a level playing field, MONOLINE advertising can help level the field.

John Tenpenny:  While the theory may seem sound, others contend that mixed messages and the broker being left out of the equation make the proposition risky at best.

Paul Therien, Business Development, Centum Financial Group
Paul Therein:
 I don’t think that it’s effective for a MONOLINE to market their own products or services to promote the broker channel.  If somebody’s going to go out there and market a product for service, let’s use [Emcamp] as  an example.  So [Emcamp] markets Emcamp mortgages directly to the consumer, the consumer is going to be more likely to want to approach Encamp directly for their services.  The broker channel needs to take accountability and the brokers need to do a better job of informing and educating the consumer.  CAAMP needs to do a better job of that so that consumers are aware of the broker channel and if the consumer is more comfortable with the mortgage broker, they are going to be more comfortable with the product or the services regardless of the branding behind it that that broker offers them.

Blair Anderson, Broker & Owner, Anderson Associates Mortgage Brokers
Blair Anderson:
 No I don’t think the MONOLINES need to be responsible for upping our profile and doing advertising.  There’s far too many them and they will just end up probably diluting the central message that needs to be made.  The fact that we have that many great lenders to work with is but one benefit of using the broker channel.  They could better serve us by just providing good literature and handouts to give clients, something intangible.  Where the real, who needs to take ownership of this advertising is the broker community themselves.  There is enough of us, it’s been suggested we could only have to give up like one basis point of our commission and that would raise the necessary capital to do all sorts of effective advertising.  So that’s the direction I think we should go.