On the topic of lenders, 20 per cent of those polled said their biggest concern over the next 12 months is fewer lenders working through the broker channel. Minimum volume requirements for brokers received a lot of commentary from poll respondents as well, many who cited problems with this increasingly common lender practice.
"I'm worried about the service we are getting from the lender if we don't make their top 100 list or bring in $5 million," said Valerie Whissell, a Mortgage Architects broker based in Gatineau, Que.
Another anonymous broker from Dartmouth, N.S., said it was becoming increasingly difficult to meet lender requirements without resorting to deal-pooling or "losing one's ability to work with all the lenders."
When asked what percentage of their loans brokers fund through banks versus non-banks, the results skewed toward the latter. Twenty-nine per cent of respondents said they do more than 50 per cent of their business with banks, while almost double that number - 60 per cent - said they send more than half of their business to non-bank lenders. The reasons to go with non-banks included good client care and competitive rates.
"The more mortgage brokers build their market niche without the banks that operate through storefronts, the better the industry will be," said Jim Solomon. "The key will be to develop a number of lenders with diversified product lines that will work only through brokers."
Another Ontario broker who wished to remain anonymous said he has made a conscious decision to not send business to banks if he can avoid it. "Brokers who send business to a big bank and expect to have those clients in the future are deluding themselves," he said.
These comments went hand-in-hand with the responses to the question of what is the biggest change the industry will see over the next 12 months. Twenty-one per cent said more competition from big banks' remote sales teams will be the most significant change (something brought up publicly by the Bank of Montreal in March), and 17 per cent believed that some or all of the remaining big banks who work through the broker channel would cut brokers off in the next year. Another 18 per cent said the biggest change will be lenders implementing efficiency bonuses instead of volume bonuses and 16 per cent believed new commission structures from lenders are on the way in 2010.
In last year's Broker Sentiment Poll, 64 per cent of respondents predicted more than 50 per cent of their business would come from new clients. This year, the emphasis on new clients seems to have gone down - only 38 per cent said more than half their deals would be from this category (although 44 per cent said between 26 to 50 per cent of their business would be new). These numbers signal a return to the database and brokers seeking out repeat business.
"New clients will continue to be a major share of the business but I expect the CRM program and target marketing I'm doing to have more impact all the time," said one Ontario broker.
Another respondent said that after being in the industry for a long time, they had a "huge database and a great deal of repeat business."
Like last year, the large majority of respondents said residential mortgages would be their focus, with 93 per cent saying this category counts for more than half of their business. Many respondents didn't see a huge amount of business coming from HELOCs, insurance, reverse mortgages or leasing, but 64 per cent said they would be looking to take on at least one of those services over the next year.
Another interesting finding on the topic of business strategy was the question of brokers amalgamating their businesses with other businesses in their area. The response was an almost even split of yes and no, showing that working together might be a solution for brokers who want to stay competitive in their communities, particularly during tougher times.
With the mix of responses and concerns we gauged in this year's survey, it will be interesting to see what plays out this year and what major changes we'll be seeing. Will we see a housing bubble form? Will the new government-imposed rules make a big splash when they come into play? Will several brokers decide to go into another industry? Only time will tell.
And as the year progresses, don't forget that CMP likes to hear your comments and concerns anytime, so let us know if you think there's an issue we're missing out on or should be covering more in depth. We're happy to hear from you.
For the full version of this story, please see the March issue of CMP.