Mortgage and Finance Corporation launched its own branded mortgage, which features trailer fees.
“It’s the most aggressive trailer compensation in the industry,” Argentum president and CEO Albert Collu
Since opening 2009 Argentum has grown to more than 500 agents in Ontario, BC and Alberta. “We felt the next smart thing to do was start offering our own products,” said Collu.
The reason for launching the product and for offering trailer fees relates, as Collu sees it, to three issues affecting the broker industry.
“This is one of the few businesses where we wake up every day whining and complaining about the competition, only to return that business to our competition and in doing so 90 per cent of the clients we send to our lenders, with all respect to the lenders, will renew with them. We have a one in 10 chance of regaining our client and that’s always sat wrong with me,” said Collu.
“The other thing that always troubled me is that this environment is very transactional; you work so hard to find a client, you do all you can to win over the client, you close the mortgage and once that mortgage funds that’s it. You’re back to square one.”
Collu also thinks that brokers lack an exit strategy. “How long can you do this with no income protection?” he asked.
“So when I came out with the product I wanted to deflect all that and try and find a way to make sure that the agents are compensated for renewal. I also wanted to make sure that they had an opportunity, just as financial planners do, to build future revenue. It’s always nice to be paid for today’s efforts tomorrow.”
And Collu thinks this is just the beginning for trailer fees.
“Come 2012 you’re going to see a lot more trailer fees come to fruition because of the new accounting rules for lenders,” he said.
“It’s not a big secret that lenders will have to either reduce compensation or change the way they compensate, because of the accounting rules, it’s just that simple and that’s going to manufacture more trailers, as you saw recently with Street Capital.”