Canadian First Financial Group has accelerated its national expansion. The company, which partners with mortgage brokers to market banking products, has doubled its national footprint in just two months.
In September, for example, the company had 11 broker-owned CFF banking Centres. It now has 23 (the list).
The company has built a name for itself by providing brokers a way to diversify their revenue streams. It does that by helping them refer non-mortgage financial products (bank accounts, TFSAs, GICs, etc.) to their mortgage customers.
“Continued rapid growth is expected through the first two quarters of 2015,” says Karl Straky, a founder & Chief Commercial Officer. “There is high demand from top-producing mortgage teams to gain access to proprietary retail banking products…”
One of those products is CFF’s EASYONE account, an online no-fee unsecured line of credit combined with a high-interest savings account. It’s kind of like a National Bank All-in-One, but with an unsecured credit line instead of a credit line secured against real estate. EASYONE pays interest when a customer’s balance is positive, and charges interest (at a much lower rate than most credit cards) when the balance is negative.
EASYONE has chequing too, with unlimited e-transfers and bill payments (all done online or via telephone banking). In addition to day-to-day banking, customers use EASYONE accounts for everything from debt consolidation, to home improvement borrowing, to funding a down payment on a house. The account is linked to the client’s home bank for easy online funds transfers.
At the moment, there’s no one else offering this sort of account to mortgage brokers and their clients. It’s not surprising then that a Maritz survey found that 44% of CFF clients would be more willing to renew their mortgage with a broker that was affiliated with a CFF Centre. That customer stickiness has compelled some huge broker teams—the likes of Colin Bruce, Peter Majthenyi, Dave Trithart and others—to sign up for their own CFF Centres.
Getting a CFF Centre is roughly a three-month process, the company says. That’s because of all the due diligence, planning, training, contracts and buildout that must take place. Brokers who buy a CFF Centre become shareholders in the bank, and earn commissions and trailers on the financial products their mortgage customers purchase. The company doesn’t publicize the cost of signing up for a CFF Centre, but we’ve heard unconfirmed reports in the five-figure range.
CFF has a lot on the go at the moment. Among other things, it’s working on an online account-opening mechanism, arranging new conventional mortgage products and raising additional capital. Its new products and the demand from top brokers to cross-sell (just like banks do) and its one-of-a-kind EASYONE account could very well make 2015 a watershed year for the company.
Rob McLister, CMT
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