That’s been the battle cry for two recent upstart broker networks. The newest is Broker Financial Group (we’ll call it BFG), which officially launches next week.
BFG is a new broker organization offering a
95/5 split to independent brokerage firms, or a
Flat-fee model (similar concept to VERICO, RMA and others).
The point man behind the company is principal broker Jason Singh. Singh and his co-founders are launching the company to aggregate volume, build better technology and develop ancillary product offerings. “I figured, if I’m going to do it for my brokerage, I might as well do it for the whole industry,” he told CMT. So BFG’s co-founders went out and got commitment from “20 brokerages” to form a new organization.
Although he couldn’t name names, the group’s inaugural members include some headline brokerages, each doing in excess of $200-300 million in annual volume. Singh expects the network to represent $3 billion of volume “in year one.” (He couldn’t share names because “our brokers are working on their exit plans [from their existing networks],” he says.)
Broker Financial Group says its value proposition will include the following:
Full compliance and payroll (for brokerages on the 95/5 model)
Lender perks in exchange for higher efficiency (“If a $20-million shop can give us really good funding ratios, why shouldn’t they get the same commission as the $100-million guys. Lenders should be passing that on to the broker,” Singh says.)
Ancillary products (“Our ancillary products are a lot more extensive than other networks [and pay referral fees],” Singh adds.)
Custom deal management and CRM software (BFG plans to launch a full-scale version of its new broker platform in “3-4 months,” and says it will replace as many as 6-7 programs that brokers pay for currently.)
A white label private mortgage fund.
Agent training (led by Tina Francis—who is one of the most skilled underwriters this author has ever had.)
No minimum volume to join.
Singh says the company’s goal is transparency. BFG will fully disclose compensation and ancillary product revenue arrangements, and reinvest the proceeds in its member brokers. Currently, he says most of the profit that superbrokers earn on ancillary products is “usually kept by the broker network.”
This is the second new independent broker network to make headlines in the last seven months. The previous was the “Broker Coalition,” a broker group spearheaded by John Bargis. When asked if the two entities might team up, Singh stated: “I respect John Bargis. You never know what could happen in the future. For now we’ll concentrate on our own network.”
The company is setting its sights on industry giants. “We plan on taking market share from the banks,” Singh declared, stressing that BFG will offer a wide array of other insurance and financial products—essentially making it a “one-stop shop.” That’s a tall order, of course, as there are perhaps only a handful of broker brands that have even a fraction of the product breadth and brand power of the major banks.
In sizing up BFG, it is being run by an accomplished and highly driven team. The founders hope to supplement their leadership by hiring a CEO to lead and scale the organization. On top of that, the economics seem appealing (at least for the agents), and the cross-sell potential is certainly a plus.
But there are formidable competitors in the broker network space—the likes of DLC, VERICO, Mortgage Alliance/Multi-Prets, Centum, Mortgage Intelligence-Invis, Mortgage Architects, TMG, Axiom and RMA, to name just a few. In one form or another, they all offer ancillary revenue opportunities, CRM/workflow technology and efficiency-driven compensation. That’ll lead some to ask whether this is nothing but wheel reinvention. If you want to know whether BFG offers enough to make brokers pick up and switch firms, it’s got an open house next week where you can likely find out.
Sidebar: Broker Financial Group’s open house is July 8 at 5 p.m. to 8 p.m. Location: 7270 Woodbine Avenue, Suite 100, in Markham, ON. Or check out its website.