The push to "unionize" mortgage specialists in one of the country’s largest markets is fueling a migration to brokering, according to one industry vet, identifying commission cuts as the driving force behind the defections.
“It’s not what we would like to have seen, but it’s happening,” principal broker for Landmark Financial Sean Chouman told MortgageBrokerNews.ca. “Here in Quebec, the mortgage specialists are facing pressure to become permanent employees of the banks and although that comes with full benefits, it also comes with lower commissions, and some specialists are deciding that they prefer that higher commission.”
That thinking may be behind an uptick in the number of new mortgage professionals across La Belle Province over the last six months. Regulators are not specifically pointing to bank defections, although at least two mortgage brokers are offering analysis similar to Chouman’s in anecdotally corroborating the trend.
The bump-up in competition – this time from within the channel’s ranks and not from outside – comes as two major banks push to fold their road reps into their permanent-employee ranks. Ostensibly, that switch facilitates cost-containment objectives, even if those employees are then entitled to the benefits of unionized workers.
But mortgage specialists are doing the math and deciding the higher upfront commissions of mortgage brokers are more attractive that the lower compensation with benefits.
Still, they may not have factored in the difficulty of attracting deals without a big bank name behind them.
“They may be better off staying with the bank,” said Leah Collett, an agent with MPH.