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Mortgage Broker News | 09 Apr 2018, 08:05 AM Agree 0
"It’s potentially a great revenue generator for mortgage brokers without having to go out and get new clients. They already have the clients."
  • Tim | 09 Apr 2018, 11:12 AM Agree 0
    Two big problems with this (as a revenue source for Mortgage Brokers): 1) there are very few institutions that even offer readvanceable mortgages through the broker channel, and 2) IRD penalties can certainly make any change prohibitively expensive (particularly if the existing mortgage is with a chartered bank).
  • Rob | 09 Apr 2018, 01:16 PM Agree 0
    Hi Tim. A broker friend out here on the Westcoast has had great success with the ManulifeOne. And while penalties can be high, as I state in the article, for home owners who have decided to proceed with implementing the strategy, they are minor hurdles.
  • Tim | 09 Apr 2018, 02:31 PM Agree 0
    Among other problems, the Manulife product is a "one and done" product: it is designed to transfer the relationship to Manulife permanently. Which may be in the customer's immediate interest, but hardly a good long-term strategy for generating revenue for the broker. Insurance Brokers love it, as it allows them to "sell" mortgages and retain their core relationship, but not so much for Mortgage Brokers.

    The Scotia STEP is a more viable option, but as I noted, there are not a lot of alternatives.
  • Rob | 09 Apr 2018, 11:48 PM Agree 0
    Hi Tim. Indeed, not a lot of lenders offering a readvanceable anymore through the broker channel - I think three - but all it takes is one that works for you. If you would like to chat offline about how you could explore this opportunity for yourself and your clients please feel free to reach out. Contact email can be found at www.smithman.net.
  • Jason | 14 Apr 2018, 11:24 AM Agree 0
    Hi Tim, just because there are limited product offerings does not mean this strategy is not a sound way of generating additional revenue. Take reverse mortgages for example, there are only two major lenders that offer solutions, and many brokers view this as an increasingly important revenue opportunity. The SmithMan strategy has three viable options, including Manulife, Scotia and MCAP.

    Also, per your previous statement, if this strategy truly was in a client’s best interest, and the reason for not offering it is because the broker prefers to keep them in products where they stand a better chance to process more transactions over time, that broker would effectively be neglecting their fiduciary responsibilities in favour of personal gain.

    I’ve personally helped many families with this strategy over the years and found that they are my most frequent and best sources of repeat and referral business, due to the nuances of the strategy, they tend to not go anywhere else for advice.
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