Not all brokers are convinced their profession could become redundant
MortgageBrokerNews.ca yesterday published a story about potential perils lying ahead for the industry, but not all brokers are convinced their profession could become redundant.
In particular, brokers don’t believe greater call centre encroachment will endanger their jobs.
“I call my clients every year and say these are the rates and if you renewed today this is what your payment would be, and I ask if they can increase their payment,” said Dianne Chafe of Oriana Financial. “If I do that every year, when their mortgage comes up for renewal in five years they’ll already be making the payment based on whatever the rates are, so there won’t be any payment shock.”
Brokers rely heavily upon referrals, and as a result they’re also client care specialists. Chafe doesn’t believe call centres care enough because there isn’t the incentive for them to.
“When the rates went down to 1.99% and 2.29%, if the penalty made sense to pay it so that you could get five more years 2.19% or 2.09%, then it makes sense to break the mortgage and pay the penalty because you would end up owing less than if you’d stayed in that higher rate mortgage. I suspect no call centre would do that and give that kind of service.”
Michael Maguire, a broker with Mortgage Wise Financial, says that clients—even millennial-aged ones—appreciate the in-person experience of meeting a mortgage broker because of how convoluted the entire qualification process can be for somebody who doesn’t understand mortgage brass tacks.
“This is the biggest investment of their life, so they’ll take the time to meet you and understand things,” he said. “That’s the way you should be dealing with your finances. You can’t just do it online and not get proper advice. How can a call centre understand your market and your own personal affairs unless you take the time to sit down and get to know somebody?”
Mortgage products have evolved to the point that, according to Maguire, brokers are more indispensable than ever before. Moreover, rate sites often engender false expectations and borrowers often require explanations about why those low rates don’t apply to them.
“Now we have insurable mortgages versus conventional mortgages, qualifying rates, and it’s become a lot more complicated,” said Maguire. “Clients can see a rate online but they don’t qualify for that rate for numerous reasons and they always get pissed off about it. They also don’t understand what’s good and bad about a mortgage. There are mortgages with high penalties, there are mortgages with restrictions—we help borrowers figure out which terms are best for them.”
Both Chafe and Maguire are in agreement: The industry will continue evolving, and just as a minority of brokers today do a disproportionately large volume deals relative to their peers, the technology of tomorrow will push the part-timers and struggling brokers out the door.
“It’s a good thing if technology comes and pushes bad brokers out of the industry so the good ones can keep shining,” said Chafe. “Technology also helps free up time. We don’t have to take an application and sit on the phone for 30 minutes. Now it frees us up to give better service. Technology is a good thing; I just don’t think it will eliminate the need for mortgage brokers.”
