Diversification becomes new normal

Firmly entrenched in the mortgage industry, diversification is no longer a mere option as much as it is a staple of most brokers’ and brokerages’ business plans.

“For many years, everybody had mortgage blinkers on,” said Jason Singh, a broker with Broker Financial Group and chairman of Broker One. “Because of B-20, people started to realize that there’s more to the client than just the mortgage. It created a need to diversify because the mortgage funnel became a lot smaller. While working with existing databases became important, clients also had other needs that needed fulfilling.”

Broker One is a network that also offers a slew of insurance products, which is in line with an industry-wide trend.

However, not every brokerage sells insurance. Dominion Lending Centres Expert Financial leverages realtors by growing their businesses, on average, 10 to 15 deals a year—and in the process, its own bottom line.

“Realtors are on the frontlines of the purchase market and they’re really who deal with the buyers,” said Expert Financial’s Broker-Owner Lorne Andrews. “You need to be able to leverage people who have those types of connections.

Expert Financial holds weekly training seminars for realtors and real estate boards, and Andrews says they easily draw at least 30 realtors per session. More importantly, Expert Financial gets direct access to top producers.

The mortgage brokerage has built a large part of its business on diversification into the real estate industry, and tools like CRMs, agent marketing systems, contacts, unlimited websites, lead gen tools, and more, are provided for realtors willing to partner up.

“We don’t have to be front and centre. Realtors are the face of the relationship and we’re on the back end to support it,” said Andrews. “We’ll be doing training and I’ll have a realtor say, ‘I talked to a buyer and told them that my mortgage agent is going to call you,’ but I’ll tell them to instead say: ‘I’m going to have a member of my financing team get in touch with you to make sure we figure out the path of your next home.’ It makes them seem like they’re a bigger entity than they really are.”

Taking it a step further, DLC Expert Financial has entered into a partnership with real estate law firm Nexera in which the two companies share an office, the Peak Performance Centre in Mississauga, that even includes a studio to record video.

Ultimately, diversification augments value propositions, but Andrews recommends thinking about it a little differently:

“In this industry, if you can’t differentiate yourself from other mortgage agents, you commoditize yourself and only give referral fees rather than bringing real value to your partners. Start asking yourselves how you can expand your value proposition and help your partners. If you put yourself in a position of giving, it changes the dynamic.”