Roman Fedchyshyn is the man who refined Manulife One and turned the bank into the major player it is today
Roman Fedchyshyn is the man who refined Manulife One and turned the bank into the major player it is today.
Inspired by a similar offering in Australia, and pitched by Trevor Matthews , the all-in-one account was introduced in Canada in 2000. After a few years working out the kinks, it hit the market to great fanfare.
Well, it did eventually.
“It’s not a simple product. It takes time for people to get their head around it,” said Fedchyshyn. “When we first introduced the product, we did all sorts of advertising but I told them it would not be successful. Because of the complexity, you need people out there face to face. So we convinced all the Manulife Financial agents across the country to sell the product for us, and we put 200 people into the field. Now you have a skilled person explaining to consumers why they should have this account.”
Manulife One proved so successful that most banks have similar offerings.
In spite of Manulife One’s popularity, Fedchyshyn believes it would outdo itself if more Canadians were better versed in the finer points of personal finance. In fact, with Manulife One, mortgage holders could shave nearly a decade off amortization, too.
“With Manulife One, it operates like a huge line of credit and you never have one dollar that doesn’t work for you,” said Fedchyshyn. “Let’s say your balance is $100,000 and you have a credit line of $50,000. If you get paid $2,500, your loan balance is just reduced to $97,500—that’s what you’re paying interest on. You’ll find in a typical case, as opposed to a standard regular mortgage, if someone has a Manulife One they’ll cut their amortization by somewhere between seven and eight years on a 25-year mortgage. They’ll cut their interest costs, too. “
Fedchyshyn also extols credit—that is, free credit. Where most people use their debit cards for most of their purchases, he believes they should use their credit cards for everything and pay off the balance at the end of the month.
“The most efficient way to operate is to get a Manulife One and you pay for everything with a credit card, and at the end I pay it off,” he said. “Why would I use a debit card today when I can get 40 or 50 days of free credit? The most efficient way tu run your personal finance is to pay for everything on your credit card, and the day before it’s supposed to be paid you program your bank account to pay it off in full. Over a period of 25 years, the benefits are huge.”
There is a caveat, though: Discipline. Fedchyshyn says Manulife One is not for the financially callous.
“The one caveat is you have to be incredibly disciplined to have this kind of account. If you have a house that’s $500,000 and you have a mortgage that’s $200,000, you can get a Manulife One all-in-one account with a credit line of up to 80% of that without it having to be CMHC insured, so you can get a Manulife One with a credit line of $400,000.”
Entrepreneurs are one borrowing demographic for whom Manulife One is perfect. According to Daniel Johanis, entrepreneurs’ incomes typically fluctuate, which sometimes prevents them from making their financial obligations.
“It gives you breathing room,” said the DLC Mortgage Centre broker and one-time small business owner. “Everything is dumped into, and flows out of, one account. It’s a good product for someone who’s self-employed because their income is always fluctuating and they’re not always guaranteed to make their monthly obligations. As long as there’s breathing room, it will just draw from it.”
