A leading B.C. broker is offering his educated take on what changes will come to the channel by 2020. Do you agree? Are you ready?
When Michael Sjerven, principal broker at Verico Vivid Mortgage – looks to the future, he sees a significantly different industry than the one now facing professionals both in and outside his Vancouver market.
“I do believe most of these changes will be here by 2020,” he tells CMP, “although, it could end up being only a few. It’s hard to predict, not unlike where interest rates are headed.”
But if brokers want to stay alive long term and compete with the Big Five, argues Sjerven, “then I believe changes need to be made and this list reflects that coming reality.” My hope is that these ideas will encourage some leaders to start working together on positive change for the industry.
The future of mortgage brokers in 2020?
- One national licence tied to one designation:
A national licensing body will simplify the registration process and allow for out-of-province deals. It will likely combine a designation (eg. CGA/AMP) with licensing and so add more credibility to the profession.
- One (national) broker association, combined with provincial associations:
Considering there is already some overlap with regard to conferences, especially with MBABC and CAAMP, by 2020, it will have made sense to roll all associations into one. Now, not all brokers can afford to pay all membership fees, and the synergy created by combining all associations into one have been viewed as beneficial to everyone.
- One national ad fund for brokers – supported by all brokers, networks and lenders:
This fund will be targeted, promoting "Mortgage Brokers" much like the ones Realtors and insurance brokers have. It may also be tied to the national designation (e.g. AMP). All networks, brokerages, suppliers and lenders contribute about one per cent of gross commissions.
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Perhaps, all other ad funds, such as DLC’s, have been merged into this new fund. The goal is to create more consumer awareness about mortgage brokers and, more broadly, educate them about the industry. The industry ultimately came to the point where it determined that the job was simply too big for any one network alone and that by combining efforts, we were better able to compete with the banks.
- A minimum experience and/or education requirement for agents:
By 2020, everyone understood that the industry needed more professionalism. A formalized training regime prior to licensing and along with required work experience is used to strengthen the reputation of mortgage brokers and networks. Possible prerequisites include two to four years of post-secondary education, multiple standardized courses and two years work experience. Existing brokers already licensed were grandfathered in.
- Compensation models focused on paying brokers for the life of the mortgage:
It's fantastic that a growing list of lenders is now offering renewal compensation; however, by 2020 – along with greater broker support for lenders that enhanced their retention efforts at renewals -- more people in the industry saw the advantages of this type of partnership. This co-branded communication has create long-term revenue for agents and a better book of business for the lenders.
- Streamlined compliance forms and simplified documentation:
In B.C., the brokers have many compliance forms to get signed, including a lengthy commitment, APR disclosure, form 10, consent, application and a mortgage protection waiver in addition to other conditions. That’s simply more documents than a bank rep is required to produce. By 2020, the industry will have decided to consolidate forms and come up with a standardized and streamlined compliance checklist. As well, a client agreement that protects the brokers if a client opts to go elsewhere prior to completion could be worth investigating.
