Build a business that people want to buy. This seems logical. But the vast majority of mortgage brokers don’t do it. They’re caught up in their day-to-day transactions with little thought of building a lasting enterprise.
The move lets HFGL generate revenue from referring out mortgage business to Boomerang. And it gives Boomerang a source of RESPs and mutual funds to cross-sell its clients.
But more than that, it provides Boomerang with an instant volume boost from HFGL mortgage referrals. That benefits Boomerang in two ways:
It permits higher levels of volume-based status with more lenders, and
It lets the company shift to a model that trades “…reduced compensation…for better rates,” says co-founder Wayne Kainu. Boomerang plans to offset that reduced compensation with its new higher volumes.
Kainu and his partner Chris Cabel started a relationship with HFGL five years ago. Then about one year ago they started looking for an equity partner to expand Boomerang’s business. HFGL was interested.
“I think the biggest opportunity for brokers today is to look outside the box and start to find these “non-traditional” referral sources,” states Kainu. “I believe these opportunities exist everywhere, and it’s up to brokers today to start thinking bigger.”
He adds that the industry concentrates too much on the 25% of Canadians who are presently using brokers. “…Too many brokers are focused…on that 25%, and fighting each other for it…Why compete in a market that is saturated when you can go and create your own market that’s virtually untouched.”