Over the last few years, changes that have increased the number of hoops customers have to jump through to obtain a bank mortgage have given rise to an unintended consequence. It seems the banks might at last be realizing that they have competition in their own backyards in the form of expert mortgage brokers, who bring to the table a higher level of service and expertise, not to mention to the ability to offer clients competitive rates.
As brokers’ market share continues to grow, the banks have not been slow to respond. Many are streamlining the mortgage origination process and fine-tuning call centres to aggressively contact clients with offers of quick and easy ‘pre-approvals.’
I’ve always said that our greatest competition is the banks, not fellow mortgage brokers. They have deep pockets and massive marketing budgets – and they are not about to let go of this profitable market without a fight. While we do have partnerships with the banks in the broker channel, don’t think that their goal is to keep us around forever. They would much rather acquire the mortgage business themselves.
Now is not the time to rest or be complacent. A powerful force is breathing down your neck that wants your clients and your business. Many people still have a strong level of trust that their bank is the place to go for their mortgage, partly because awareness of our industry is still too low. These beliefs are deeply ingrained and won’t change overnight. We still have a lot of work to do to change that paradigm.
In 2019, I believe the housing market will continue to be soft, and we will see lower sales overall. What to do? Brace yourself for a different year, plan and prepare. It’s incumbent on each broker to demonstrate their worth. How will you set yourself apart? What value do you bring? Are there courses or licences you can obtain to represent yourself the best way possible to your clients and partners? What are your areas of weakness, and how can you strengthen them?
A market like this will weed out the brokers who are part-time, who aren’t serious or who have no idea what they’re doing. Our clients deserve to partner with someone who has the knowledge, skills and experience to provide them with the best possible options.
As mortgage brokers, we are fortunate to be in a position to truly offer clients the best possible care, attention and experience. We can research and present options that are best suited to them, offering completely unbiased advice. We can take the time to understand their unique situation and then find them a solution; this gives us a huge advantage over the banks. How fortunate that we aren’t limited to the same small number of mortgage product options for every single client. Our industry needs to leverage this point of difference to the max.
One important factor I think is missing is for brokers to counsel clients on their finances, their spending habits and how to manage their cash flow so that when we refinance their mortgage, they walk away with information that can really improve their lives. This means we must be comfortable having the tough talks and offering advice that our clients didn't necessarily come in for, but is undeniably in their best interest.
We live in a world of easy credit where consumers can buy whatever they want, whenever they want it. We have to stop relying on refinancing our homes and consolidating on secured lines of credit. What happens when a client can’t do this? Let’s offer this service and help our clients become more informed on overall financial planning. As Tony Robbins says, “Every day, work harder on yourself than anything else. If you can become more intelligent, more skilled and more valuable, you can add more value to other people.”