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Consumers today have access to all kinds of information at the touch of a finger tip, on a computer, the turn of a newspaper page, T.V. or radio and of course word of mouth, likely still the most powerful form of advertising that exists. It is this very powerful tool that a good mortgage broker of any era has to work with from within the communities we serve. The successful independent broker must continue to be a "Super Servant" to his clients in order to distinguish himself from the direct institutional branch lender. The independent mortgage consultant must generate referrals from his past clients, realators, lawyers, accountants and fellow club members; real people who know, like and trust him.
There is no question that the borrower today is a demanding, sophisticated consumer of financial products and services. Customer loyalty for the most part, ends at 1/4 of 1%. This is true of course for independent brokers and institutions alike.
Today, large institutional lenders, banks and trust companies are mirroring our image by hiring former brokers, agents and independents to become mortgage development officers. What quality of individuals are they able to attract if they were unsuccessful as private business people? A cursory study recently taken directly from institutional sales force managers readily admit that mortgage development teams experience high attrition rates between 25% to 33%. The customer is not likely going to deal with the same bank representatives in 3 to 5 years time when he requires an increase, new loan, restructuring or investment mortgage. The entire process, which is not comfortable or efficient must start over again.
There are many lenders chasing too few mortgages in the 90's. Certainly this bodes well for the consumer as competition breeds ingenuity in product features and pricing. The mortgage is considered an anchor product to introduce the lender to cross-selling opportunities and convert a new customer into a "customer for life".
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Lending institutions want an all encompasing relationship which will pour profits into shareholders' pockets and minimize portfolio risk and optimize client control positions. The overall credit manager or "all your eggs in one basket" concept for the consumer may be convenient but I believe it is the prescription to serious trouble should the borrowing family become economically challenged. It is for this very reason the well informed consumer should diversify his liabilities similarly as he should maintain a proper asset mix. To accomplish this effectively, an independent liability consultant "the 90's mortgage broker", should be used who has the knowledge and access to the entire marketplace shelf, not just one book published by a head office.
Large banks such as Bank of Montreal, Scotia Bank, Toronto Dominion, CIBC as well as life insurance companies, trust companies and credit unions have recently recognized and actively purchase business through independent broker distribution networks. They offer competitive discounts, and special rates and privileges to the broker's customers as they are well aware that the broker provides guidance as to choice for the consumer.
There are usually no fees charged to the qualified borrower as the lenders pay orginization fees for a quality product similar to the insurance and travel industries. The next time that you may require a new mortgage to purchase a property, a renewal quotation without cost to transfer, a debt consolidation, commercial or industrial mortgage, rely on experience and knowledge that you can trust to do business with a local, independent mortgage consultant.
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