Don’t be surprised if you see more “advice-oriented” marketing from the big banks in coming quarters. BMO, RBC, Manulife and other non-broker lenders will use the “advice” angle as a key selling point.
Advice is a major differentiator for mortgage planners, who generally:
Specialize solely in mortgages
Employ analytical tools and research when making mortgage recommendations
Compare mortgages from dozens of lenders, as opposed to selling their employer’s (i.e., bank’s) one line of products.
Banks realize that this is an advantage of mortgage planners and they would love to align themselves in this respect.
As a result, banks will likely be stepping up their investments in advice-centric marketing, resource-based mortgage websites, mortgage advisory technology, and additional sales force training.
The reality, however, is that while banks’ internal sales forces may be competent, the bank business model makes it near impossible for them to be objective.
Dropping by a bank for a mortgage is not unlike walking into a Buick dealership. The salespeople may have quality cars to sell, but they’ll never tell you that a more suitable car exists at the [insert your favourite car company] dealership down the road.
By contrast, mortgage planners know the pros and cons of numerous mortgage products—even products from competitors. Admittedly, most planners don’t deal with every lender, but they nonetheless provide many more mortgage options to clients than a bank branch can. And, unless banks radically change their business models, that will always be an advantage exclusive to the broker channel.
In the next few years, it will be essential for brokers to capitalize on this advantage to boost broker market share. We, as planners, owe it to each other to represent our industry well. The best ways we can do that is by enhancing our trusted advisor role and operating with the highest standards of professionalism. That means, for example:
Thoroughly analyzing a client’s present and future cash flow, financial goals, and risk factors before making a recommendation. (Brokers who think they can survive as “order takers” [without adding tangible value] should probably find other work.)
Keeping up-to-the-minute on rates, mortgage research, products, and lender guidelines
Performing detailed amortization comparisons to show clients which term is best for them
Not making generalized statements like “This is the best mortgage there is” or “this is the best rate in the market” without actually having compared all lenders.
“Letting a deal go,” on occasion, when you know a client can be better served by a lender you don’t deal with.
Our industry, through the efforts of our trade groups, regulators, and brokerage executives, has strived hard to instil the importance of quality advice. As mortgage planners, we must continue to elevate our trusted advisor status so we’re ready for when the banks start positioning themselves in a similar fashion.