Laird Steps Down from True North Mortgage

James-LairdTrue North Mortgage is a leader in the Canadian brokerage industry. It’s paved the way for countless brokers who target the online space.

So when we heard that its founding partner and Chief Operating Officer, James Laird, was leaving, it begged the question:  why?

We spoke with James yesterday to pick his brain about why, and about how the online mortgage market has and will evolve. Here is that interview:

On why he’s leaving True North Mortgage:

“I enjoy really ground-level start-ups…When I joined True North there was one store with one employee out in Calgary. It’s that type of thing that really turns my crank; trying to grow explosively…That’s what we’ve done over the last six years…Whether it’s staff, number of stores, or volume of business, we’ve been more or less doubling each year. I like being part of organizations like that, and at this point we’re at 35 employees, nine stores in five cities and approaching a billion dollars of funding. We sort of reached a…stable type of environment. I guess what I’m getting at is, I don’t think we’ll be at 18 stores and 70 staff next year…And so, because of the state of the business, I think it’s an appropriate time for me to leave it with the management that’s in place and look for other opportunities.”

On the kinks he’s had to work out since True North started:

Laird cited everything from “online marketing to HR, which is a huge one and involves proper recruiting, effective hiring, good training processes, and then ongoing education so that your staff is always getting better…and then there’s technology. We’ve redone our site a couple times,” he says.

On what makes a good broker website:

“You know, we as industry insiders sometimes lose sight of what information that 31-year-old hipster is looking for. They see a rate [but] what do they want to see next? And so we’ve been tweaking and refining the education [aspect of our site] and the way it’s functionally presented.”

(Ed. Note: True North has put painstaking thought into the design of its website. If you’re a broker looking for ideas, it makes a great case study.)

On consumer adoption of online mortgage brokers:

“It’s just not what people are used to traditionally…The default is, you just walk into your bank…It’s a big step for some people to use a mortgage broker, and it’s a further step to use an online mortgage broker.”

On the primary online consumer:

“It’s not the 31-year-old hipster” that is the primary user of online brokers, Laird says. That customer has less experience so they usually “go to the safest place possible, which is the bank…compared to the 45-year-old who understands mortgages, understands credit, knows that they’re the cream of the crop, and knows they can qualify for virtually anything that’s available on the market….They have a little more confidence that whatever [mortgage] is being advertised online is, they can get it. It’s not really risky for them because they’re borrowing a few hundred thousand, not depositing.”

On the biggest change in the business since he started:

“Regulatory changes have been frequent and…fairly dramatic. When I was doing mortgages in Calgary that first summer, I was doing 40-year amortizations with zero percent down on rentals. But I can’t disagree with [the changes]…I think the finance department has done a great job.”

On whether lenders like online business:

“I’d have to say yes because they’re sure getting a lot of it…The guy who goes online and submits his application isn’t some guy who’s got a consumer proposal and is behind on his credit cards. They are AAA clients. They’re the cream of the cream. They go online because they’re confident enough to know that they can get that super rock-bottom promotion. They know they’ve got a good job. They know they have a good down payment. They know their credit scores.”

In terms of quality of business, it’s likely “better than other referral sources,” he says.

On how other brokers view online discount brokers:

“As industry professionals, we sometimes get caught up in our needs and what we think, and really all that matters is what the Canadian consumer thinks. What we all should be trying to do is figure out, how does the Canadian consumer want to go through the mortgage process and how can I as a business owner make that process better or easier or cheaper…We should spend all day every day thinking about how to improve the process in the eyes of the Canadian consumer.”

On the staying power of online brokering:

“…The most important thing is that it’s here to stay…The other viable business models should understand…how they fit in…with the changing consumer…What the Internet is doing is increasing the education and the availability of information for the Canadian consumer, [with everything] from rates to whatever…I don’t know anyone who’s getting a mortgage that isn’t going to Google to do some research right now…I think it will grow at a greater pace than the rest of the brokerage industry.”

On the importance of rate comparison sites to online brokers:

“Generating leads online is extremely challenging. It involves a great understanding of Search Engine Optimization and the ability to compete in that space. I’m not sure if there is any more competitive or challenging online space to get into than the [online] mortgage market. Maybe hotels or flights…But be it mortgages, flights, or hotels…if you look at the pay-per-click cost of [the keyphrase] “best mortgage rates in Toronto,” it’s insanely high, and the number of banks and rate sites and brokers trying to appear on the first page of Google is [also] insane. So you’ve got to decide: If you’re going to compete online, are you going to take on that very difficult challenge in-house? Or are you going to outsource the expertise to the RateSupermarkets and the RateHubs who have said, “You know what, we’re going to be the experts here, that’s going to be our business…We know how to compete in the online space. It’s one or the other.”

On the importance of brokers:

“I think it would be terrible for the Canadian consumer if the brokerage channel did not exist to keep the banks honest, to provide choice in the marketplace, and to push innovation and education. I think we are an extremely important part of an extremely important industry.”

On where he’ll end up next:

“I do see myself in this industry in some capacity going forward…for sure.”

Rob McLister, CMT (email)

  1. Very few people have made as big a contribution in as short a time at the consumer level of the mortgage brokerage business as James Laird. James was way ahead in his thinking about how technology, consumerism and process efficiency would impact our business. He brought a fine mind and genuine empathy for consumer needs to a business that far too often puts its faith in salesmanship and referral source acquisition. The next few years will prove just how right James was in viewing the consumer as the most important part of the mortgage process. I hope we see him back in our business in some capacity very soon.

  2. James’ contribution and understanding of the mortgage broker market in such a short time frame, will not go unnoticed. He possesses the entrepreneurial spirit to influence change, and his accomplishments in our industry were evidence of that.

    To one of James’ point, many changes have transpired from a regulatory perspective, that have created challenges for the entire industry, which will no doubt continue. It’s a new world out there for lenders and brokers alike, and although the on-line discounting space with its already significantly thinner margins may have made more sense to a small number of players, I would suggest that their efficiencies and margins will be affected going forward.

    The on-line game is certainly here to stay, but it will take quite some time before the industry and the consumer embraces it en mass. Consumers still appreciate the personal relationship they build with a professional, which will continue. Just look at the real estate market, and how the professional advice of a well trained realtor who isn’t looking to clip margins down to next to nothing, is still very much the way the majority of business is conducted – and we all know that the on-line/ sell your own home sites exist in that business .

    Wise choice to move on after reaching a plateau James. Best of luck, I’m sure you’ll do well with wherever you land.

    1. You are very wrong about the comparison with Real Estate agents. The only reason that most people use a real estate agent is because of the real estate lobby and the complete collusion in the industry to NOT show your house if you list it with a discount broker. It would be the equivalent of banks refusing to work with brokers that discounted their rates by taking less commission. In addition, the real estate market is so hot and they are making so much money that they don’t have to cut rates. If a crash happens or there is a 5 to 10 year period of little to no price increases (ie. when interest rates go up) then you will see much more business go to discount realtors as consumers will be looking to save every dollar to break even. A relationship only comes into play when the costs are the same or you have such a huge brand recognition that people will pay more.

  3. James has also inspired much in the evolution of lenders and the program they offer. James contributions to the lender community and lender partnerships is highly valued and will be greatly missed. Good luck James on all your future endeavours. I hope we will again have a chance to work together in the spirit of co-operation and advancement of the mortgage brokerage industry.

  4. I haven’t had a lot of direct interaction with James, but I have heard nothing but good things about his passion for business excellence and professionalism. The more ethical thought leaders we can have like James in the industry – the better off we all are. The mortgage industry definitely benefited from your participation.

    Best of luck on your new pursuits James and I look forward to seeing you accomplish much more in the time ahead!

  5. True North is a real great company, and Mr. Laird will be in for a real challenge to try to build another type of operation in his career.

    See you on the battlefield, Mr. Laird. ;-)

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