Q&A: CENTUM president Chris Turcotte

Chris Turcotte (pictured) is one of the Canadian mortgage world’s most recognizable inhabitants. He’s a fixture at major industry events, offering insights that stem from his role as president of CENTUM and his earlier experiences as one of the company’s top brokers, and a vocal critic of practices he sees as detrimental to the industry at large.

He does it all while exuding a distinct sense of joy, too. That may not qualify as an entirely miraculous accomplishment in a year when everyone’s volumes are shooting through the roof, but even under normal circumstances, Turcotte’s optimism is highly infectious. You can tell from speaking to him that mortgages have been very good to him, and that in his work for CENTUM, he’s doing what he can to return the favour.

Mortgage Broker News caught up with Turcotte for a chat last week. In addition to discussing what’s on the go at the firm, the industry’s tech wars, and motivation, he also had a few choice words regarding pricing and the value brokerages should be providing – but aren’t.

The following interview has been edited for length and clarity.

Mortgage Broker News: You can be a hard guy to get on the phone, which is good because it means you’re busy. Tell me a little bit about what CENTUM’s been working on and what your focus will be in the first few months of 2021.
Chris Turcotte: The biggest thing that is keeping us busy, and that should have the biggest impact in early 2021, is our pricing model. We saw that there was a need for a pivot, so we’ve recently moved to a flat-fee model, which will help brokers better understand their overhead and the overall cost of their business. We have a standalone model for those running their own brokerage and then we have a model for those that require broker services. That’s probably our most exciting thing going on, not just for our existing brokers, because we’ll gladly transition them, but the industry at large.

The second thing we’re working on is a new payroll system. All of our offices within our network are going to be able to do direct deposits for all of their agents. Currently, our industry is very much in the Dark Ages when it comes to payroll: there’s still a lot of email money transfers and there are a lot of cheques being written because the technology just hasn’t been readily available. There are people coming to the marketplace with payroll solutions, but they’re incredibly costly, so we’re leveraging what we’ve got here at head office to deliver some true value. We’re looking at rolling that system out at no cost.

MBN: Let’s talk tech. With Lendesk’s acquisition of Finmo, Filogix nabbing Doorr, and DLC promoting the hell out of Velocity every chance they get, there’s this growing impression that to win in the Canadian mortgage space you have to offer your own tech. But you don’t think that’s the case. Why is that?
CT: That’s the impression being presented to brokers – you need tech to win. But ultimately, the real agenda there is that everyone is trying to capture those last few basis points.

Think of any successful shop, any successful brokerage, none of them are going to be like, “Oh my goodness. I’m successful because of DLC’s technology.” “I owe all my success to M3’s technology.” I would be nowhere without CENTUM’s technology.” The top brokers in the country don’t talk that way because it’s not factual. What you’re seeing is marketing. It’s being sold one way but, at the end of the day, the brands trying to do their own technology are starting to almost force their technology on to brokers by leveraging access to lenders and the broker’s own data.

It’s not publicly talked about, but Filogix, the industry standard for 20 years, makes its revenue from being that secure pipeline that takes information from the broker into the banking system. There are a few points up for grabs if you do that role. I think the brands have realized they can’t possibly squeeze anything more out of mortgage brokers – especially the two big players, which are, far and away, the two most expensive options – so this is one more way they don’t have to squeeze the money out. They can get it in a different way, so they’re going all-in on that.

What’s really unfortunate here is that I think you’re going to see choice taken away from brokers. That’s really sad. If you’re locked into a contract and that contract says you no longer have a choice on how you run your business, I think that’s a major disservice to brokers. I hope they think long and hard about the consequences, given that this is the underlying agenda at these brands now.

MBN: So what’s the alternative? If it’s not, “We have to build our own stuff,” what’s your approach to it?
CT: We’ve become tech agnostic. You use what you want to use. Obviously, we have a tech partner in Axiom Innovations, and they provide Piper, their direct-to-lender connectivity platform, but at no point have we ever said, “You have to use this. We strongly urge you to use this.”

That’s language we just don’t have because most of us here are, or were, mortgage brokers. We would never want to be put in a box. We will never put our people in a box, and every tech decision you’re going to see us make is going to be made with that idea in mind. We’re not dictators, we’re business partners.

MBN: On the topic of competition, you feel that some of your competitors are possibly charging their brokers too much. What should a brokerage’s pricing be based on?
CT: Competition and innovation breed choice, and choice lowers prices, so I think a 3-5% royalty model is just archaic. I think the big brokers are doing that math, and the value, or lack thereof, is becoming apparent. They’re realizing, “Wait a minute. You’re taking 5% of my nut but I’m paying for all the stuff I want to use because I don’t want to use what you’re trying to jam down my throat?”

Run the numbers. If, every single year, I’m giving my brand $50,000, am I seeing $50,000 worth of value? Even if it’s 3% on $1 million in revenue, am I getting $30,000 in value? I think some uncertain times are ahead, and I think you need to think about what you’re getting for that $30,000 or $50,000. Because if you can get the same value on your own for a fraction of the price, maybe it’s time to take a hard look at your decisions.

Just because you’re working harder and you’re seeing a lot of success, I don’t necessarily agree with the attitude that the brand should win more. The era of overpaying because you drank a brand’s Kool-Aid at one point – those days are over.  

MBN: You’re big on motivation. Your Twitter feed is full of inspirational quotes and advice for helping people keep their heads up when things don’t go their way. Why is sharing content like that important to you? What motivational techniques do you find work best with your team?
CT: For myself, it’s about mental alignment more than anything. You wake up first thing in the morning, your feet hit the floor, and, especially during the pandemic, it’s easy to think of 20 reasons to be negative. It costs me nothing to wake up and make any attempt I can to spread some positivity. I’m just doing my part to be the counter-noise. And it motivates me. When I wake up and I have a positive intent, that feeds me.

I think each of us has a superpower. You can choose to smile at someone. You can choose to make a positive comment. You can choose to compliment somebody. You don’t know the power of that.

I get asked often about how that [motivational content] plays out at head office, but I don’t bring it up. Everyone leads by example here. We feed off of each other. We’ll hear someone on the phone going the absolute, ridiculous extra mile for a broker. What do you think that does for us the next time we take a call or send an email? It’s like the best version of one-upmanship you’ve ever seen.

MBN: Next year, refi volume should be down, and a lot of the pent-up demand that kept the market moving through the summer and fall has been exhausted. What’s in store for the Canadian mortgage market in 2021?
CT: I go out of my way to not make predictions about the market. We’ve seen during the pandemic that even the most educated minds in the Canadian mortgage industry didn’t get it a little wrong, they had no clue what they were talking about.

We already have brand leaders who are really good at either regurgitating BNN reports or going out of their way to let you know they know more about you than they do about mortgages. I don’t spend any time thinking about it. No matter what, we’re going to make sure our agents and brokers are prepped.

If you want an actual prediction, yes, refi’s are going to go down, but I do think rates are going to remain low for a few more quarters at least. I’m curious to see what happens with the new lockdowns and if they’re accompanied by a new wave of businesses going under or further layoffs.

MBN: What do you think will see more movement next year: home prices or Pokemon card prices?
CT: (Laughs.) I think definitely Pokemon prices. The 25-year anniversary is coming, which is going to keep those prices really high.