As regulations continue to tighten and the industry grows more competitive, mortgage brokers are under increasing pressure to differentiate themselves from the competition and the banks. But how can a broker make themselves stand out in the current environment?
“One of the main areas in which a broker can differentiate themselves from a bank is in the ability to use multiple lender platforms and products when creating a solution,” says Brad James of Fundever. “An individual bank will only have one set of products and services, but any given client may need a combination of services.”
Another area in which brokers can differentiate their services from the bank is with commercial mortgages. “Banks only offer one product each, and there are literally thousands of non-bank lenders in Canada that offer more competitive and flexible solutions in the commercial space,” James explains.
Each year, more Canadian consumers turn their backs on the banks and seek out the services of a mortgage broker. But why; why do so many people choose brokers over the banks? “One of the main reasons is the matter of motivation,” James says. “When you visit someone at a bank, who receives their remuneration outside of the performance of the customer’s application, they’re not motivated to get the deal done in the same way as a broker.”
“A broker earns a commission if the mortgage is funded, but gets nothing if it doesn’t. The same is not true of the bank, the person gets paid no matter what, even if the answer is no.”
James believes brokers need to up their game and broaden their offering to compete in the modern market.
Competition is heating up and it’s more important than ever for a broker to have a full suite of products and services at their disposal. “Up until these recent changes, brokers have been very focused on a narrow vertical of the market, which is residential mortgages,” James says. “Brokers need to branch out and adopt all of the possible solutions in the market in order to be more dynamic than one banking institution has the potential to be.”