Brokers prepared to earn back market share

Brokers prepared to earn back market share

Brokers prepared to earn back market share While it may not be what brokers wanted to hear, the prediction that broker market share will continue to drop has inspired players to focus on what they can do thrive in the changing industry.

“I'm not worried if our broker share goes up or down to be honest; I'm more concerned about my bottom line and strategy,” Jake Abramowicz of Mortgage Edge wrote on MortgageBrokerNews.ca. “I know there will always be a misconception about brokers out there, and that's the message we should try to focus on -- not anything else.”

Comments poured in following Ron Butler’s prediction that mortgage broker market share will continue to drop in 2015.

CAAMP’s annual fall mortgage industry report, released in late November, indicated that broker market share had fallen on a year-over-year basis, a large chunk of which had gone to the big banks.

“For all current mortgages on homes that were purchased during 2014 up to the time of the survey, 61 per cent were obtained from a bank,” the official report states. “Mortgage brokers had a 31 per cent share. Credit unions were the source for six per cent of these mortgages, followed by two per cent from life insurance or trust companies.”

Many broker blame the eroding market share on the discrepancies between how tightened underwriting guidelines have impacted brokers compared to bank reps.

“Branches have such incredible leeway with conventional business it is infuriating, but understandable,” Abramowicz wrote. “When they have built the moat around the client with RRSP, RESP, chequing, business, and other accounts they can make those exceptions because they know the client better than we do. It still feels powerless but that's not to say we still can't bite out a chunk of the business.”

And brokers are ready to take on the challenge.

“If brokers are going to recapture some of the market share lost to the banks last year, we are going to have to be nimble and innovative and connect with our clients in a way banks can’t,” Jackson Middleton, the Kilted Broker wrote on MBN. “Most successful brokers have been built their business on customer service and referral business.

“I don't think a departure from this model is a good idea; quite the contrary, we should be figuring out how we can provide better customer service and be more referable.”