Profits are shrinking and brokers are paring down their support staff, according to one head whose network is poised to announce a big acquisition in May.
“Given what’s happening in the marketplace with legislative changes the industry is taking a hit; business has been off to a great extent and it’s not off due to seasonality … if they want to continue to survive they have to (make cuts) but the work still needs to get done,” Ron De Silva
, CEO of RMAI Financial Group told MortgageBrokerNews.ca. “To that end, what we’ve been doing is looking at buying some of these organizations that have been marginalized because of industry changes and providing them with the infrastructure -- because we’ve got it – and giving them the chance to continue to operate under their brand."
According to De Silva, legislative changes have resulted in a business decrease of 20 per cent in some cases, which has forced several smaller brokers to make cuts to their non-sales support staff. And he believes that’s where RMAI can help.
“It’s a 20 per cent adjustment in the actual industry vs. anything else,” De Silva said. “(It's) been brought forward as a result of (regulatory changes) and there are some organizations that can no longer afford to operate the way they’ve been operating; infrastructure costs have to be cut drastically just to make the numbers work.”
De Silva teased the news of a significant acquisition though he refused to disclose the name of the organization until the deal is finalized.