A new certification for financial professionals that comes with territorial rights is being touted as a way to help mortgage brokers boost their bottom lines and blow competition out of the water.
Robinson Smith, son of the late Fraser Smith who created the Smith Manoeuvre, will soon launch an exclusive network that uses the strategy to help consumers with their homeownership needs from start to finish. The Smith Manoeuvre converts non-deductible mortgage interest into the deductible interest of an investment loan. By financing into a readvanceable mortgage, homeowners can reaccess equity created by their regular mortgage payments.
After homeowners take the Smith Manoeuvre Homeowner Course, they can seek out financial professionals—which, in addition to mortgage brokers, include realtors, conveyancers, insurance agents, wealth advisors and accountants—who have completed the Smith Manoeuvre Certified Professional Accreditation Program.
Smith told MortgageBrokerNews.ca that there will be one professional in each field for roughly every 50,000 people—“So for a city like Victoria with just over 100,000 people, there will be only three Smith Manoeuvre-certified professional mortgage brokers —but because of the network’s exclusivity, each professional will be carefully vetted to ensure the cream always rises to the top.
“The nice thing about this for mortgage brokers is they don’t have to compete on interest rate anymore, which is really of secondary interest to the homeowners because what they need is the right mortgage,” said Smith. “Over the past few years, lenders’ retention agents have been calling the mortgage holder earlier and earlier before maturity looking to bring the client back over to the lender, and the broker will lose the client. But now the client will know that the call centre agent isn’t privy to the Smith Manoeuvre strategy and will stay with the mortgage broker. A lot of loyalty will be generated through this program.”
Smith noted a mortgage broker is Sidney, British Columbia has been closing $8-12 million a month without having to seek out new clients or cold calling.
“It’s a way to avoid buying down interest rates to attract clients. That’s a race to the bottom and detrimental to brokers’ income and professional credibility,” continued Smith. “But that could be greatly mitigated when you implement a financial strategy someone has come to you to help them with. You’re the local expert in your area.”
Indeed, mortgage brokers are a dime a dozen and often have trouble distinguishing themselves in the eyes of the public. Where many relentlessly advertise dogged abilities to find the lowest interest rates on the market, SMCP brokers can break away from the fray.
“I want to build, in any given town or city, little modules of certified professionals who give full service in all aspects of the strategy,” said Smith. “Mortgage brokers will send clients to certified advisors, insurance agents and accountants to ensure every aspect of the strategy—taxation, investment, financing—is nice and tidy and part of a full-service regional package. Territorial exclusivity minimizes the number of brokers, giving them a leg up on the competition.”
The Smith Manoeuvre team will handle marketing and branding, he added.
The program is slated to launch in the next month and will coincide with the release of a new book, Master Your Mortgage for Financial Freedom.