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ISSUE 10.2

CONTENTS

22 COVER STORY

THE DIVERSIFIERS

More and more brokers are branching out beyond mortgages to stay competitive – should you join them?

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ISSUE 10.2

CONNECT WITH US

CONTENTS 36

FEATURES

5 MARKETING TIPS FOR 2015

Marketing practices have changed with the times – here are 5 ways to keep up

Got a story, suggestion or just want to find out some more information? twitter.com/CMPmagazine www.facebook.com/ MortgageBrokerNewsCA

UPFRONT 04 Editorial How are declining oil prices affecting the Calgary market?

06 Letters to the editor

Brokers weigh in on CMP’s annual Hot List

08 Statistics Canada’s condo market is primed for growth

10 News analysis How the bond market is driving favourable fixed rates FEATURES FEATURES

THE DIPLOMATIC LEADER

Being a good leader isn’t about avoiding arguments – it’s about framing them in the right way PEOPLE

BROKER PROFILE

To his clients, Greg Clifford is more than just a mortgage broker – he’s also a financial sounding board

RETURN ON INVESTMENT

How one company is helping brokers make the leap into syndicated mortgages

12 Head to head Will brokers be able to compete with the banks in 2015?

14 Broker network update Why more brokerages are looking to consolidate this year

16 Commercial update Commercial brokers are poised to take advantage of lower rates

PEOPLE 18 Industry icon

John Thompson’s people-first approach has resulted in seemingly effortless growth

47 Career path How Calum Ross went from clueless novice to eight-figure originator

48 Favourite things Janet McKeough of Success Mortgages and the Mortgage Brokers Association of Atlantic Canada FEATURES

VIDEO MARKETING

An expert shares the best ways to use video to connect with potential clients

MORTGAGEBROKERNEWS.CA CHECK IT OUT ONLINE

www.mortgagebrokernews.ca

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UPFRONT

EDITORIAL

www.mortgagebrokernews.ca ISSUE 10.2

Feast or famine for Calgary brokers? C

algary: The land of milk and honey – deep-fried in Alberta crude oil. That prosperous reality, which ignited home sales in 2014, also handed brokers a whopping 21% jump in mortgage volumes. A nearly double-digit rise in the city’s average home price further sweetened commission cheques last year. Flash forward to 2015, and the possibility of bringing home that kind of, ahem, bacon seems increasingly remote. The culprit, culprit, of course, is volatile oil prices, especially for the thicker, less desirable Western Canadian Select (WCS) crude produced in Alberta. In early February, that economic driver was trading at just under $50 a barrel, down nearly 45% from a scant 10 months ago. The decline has already sparked a wave of project cancellations, with recently announced layoffs at oil sands players Halliburton and Sanjel placing Alberta on track to meet projections for a decline of 23,000 industry jobs in 2015 alone. The numbers are enough to give even the hardiest of brokers indigestion. But should they? Perhaps not.

EDITORIAL Editorial Director Vernon Clement Jones Writers Ryan Smith Samo Ayoub Rachel Norvell Justin Darosa Copy Editor Clare Alexander

CONTRIBUTORS Kim Goldstone Geoff Anderson

ART & PRODUCTION Design Manager Daniel Williams Designer Loiza Caguiat Traffic Manager Kay Valdez

SALES & MARKETING Associate Publisher Trevor Biggs General Manager, Sales John Mackenzie Marketing and Communications Claudine Ting Project Coordinator Jessica Duce

CORPORATE President & CEO Tim Duce Office/Traffic Manager Marni Parker Events and Conference Manager Chris Davis Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

EDITORIAL INQUIRIES vernon.jones@kmimedia.ca

Prices are holding steady despite all the uncertainty surrounding the oil sands While OPEC continues to hold its oil production steady, effectively tamping down on prices for WCS, new home sales data suggests surprising resilience in Alberta’s biggest city. The Calgary Real Estate Board is reporting a 40% rise in the number of new listings for January, and prices are holding steady despite all the uncertainty surrounding the oil sands. While the number of transactions has dipped, brokers in the field are reporting a rise in the number of buyers and homeowners seeking their expert advice before moving ahead with purchases or refinances. It’s a phenomenon the broker channel has seen before, and one that can only grow as consumers grow anxious about their own fiscal situations and seek out the kind guidance big banks consistently fail to bring to the table. So notwithstanding an expected rise in oil prices for the second half of 2015, brokers are already busy, making sweet lemonade out of lemons.

Vernon Clement Jones Editor

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Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as IB magazine can accept no responsibility for loss

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UPFRONT

LETTERS TO THE EDITOR

Feelin’ hot, hot, hot

Brokers weigh in on CMP’s 2015 Hot List while offering warm leads on who should be handed that honour for 2016 RE: 2015 HOT LIST (CMP 10.01)

I didn’t know half of the people on the Hot List, but I should have. All of the mortgage professionals on the list are helping to grow professionalism across the board. I hope they will take it upon themselves to mentor newer agents and help them achieve similar success. Thank you, CMP. –Gordon Davies-Li

Congratulations to Gary and the many Dominion Lending Centres professionals on this ranking. I know they are transforming the broker industry and taking us to the next level. –Ontario Broker

Congratulations to all on the list. I think next year, CMP should look at fully disclosing its selection process for the Hot List – or better, explain why a person is deemed ‘hot’ for that particular year. Some on the list have made lifetime contributions, but I cannot say that their current or recent contributions make them hot.

I commend the industry for its continuing development and, in particular, the stalwarts who have made it what it is today, but I would like to see more industry veterans from the private lending side and from the West. Toronto is not the only place where the industry is developing. –Saskatchewan Broker Veteran

–J.O. Battaglia

Congratulations to all my colleagues on the Hot List. I would, however, like to see more representation of the Canadian Mortgage Award winners, who have demonstrated their success in a quantifiable way. They are truly hot. –GM

Congratulations to all those on this year’s list, but I will be looking to see if you live up to the billing this year. CMP might want to evaluate that for the next year’s article. Are the hot really hot? –Michael Healy

www.mortgagebrokernews.ca

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PressRead

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UPFRONT

STATISTICS

Condo confidence trumps concerns Brokers, get in there! Calgary notwithstanding, Canada’s largest condo markets are primed for growth in 2015

BC’s top market for Jan sales activity (YOY % change)

Northern Lights +20%

Alberta’s top market for Jan sales activity (YOY % change)

South Central Alberta: +10.7%

Manitoba’s top market for Jan sales activity (YOY % change)

Vancouver

VANCOUVER

It may be Canada’s closest thing to an indomitable real estate market – Vancouver’s condo segment is realizing growth in both the number of units trading hands and the prices those homes fetched. Some 814 were sold in January, up 7.8% from a year earlier. The average dollar amount attached to those transactions also climbed, rising 5.7% to just under $471,799. Brokers should expect more of that growth in the first quarter, according to market economists. Their bullish forecast is based on the province’s falling unemployment rate, which closed the year a 5.4% – more than a percentage point lower than the national average. That strengthening economic position, coupled with declining interest rates – both fixed and variable – is expected to drive condo sales for the first half of the year as Vancouverites look to get into the market ahead of any further spike in home prices. The continuing rise in prices for semi- and fully detached homes is also expected to grow condominium sales as buyers increasingly find themselves shut out of the market and turn to high-rise living as a cost-effective alternative.

Calgary

Winnipeg: +4.7%

Saskatchewan’s top market for Jan sales activity (YOY % change)

Prince Albert: +10.7%

CALGARY

Condo sales in Cowtown are proving susceptible to waning consumer confidence and concerns about economic fallout from declining oil prices. January, in fact, saw sales of those units fall off the cliff, plummeting 35.9% from a year ago. The 3.9% drop in the average selling price was considerably more restrained. The market – and mortgage brokers who depend on it – can expect to see more precipitous declines for the rest of the first quarter, argue economists. Condos may bear the brunt of any significant slowdown as front-line workers in the oil patch hold off on purchases in light of growing job uncertainty.

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TORONTO

What a difference a year has made for Toronto’s condo market, with sales in January rising a whopping 11.2% from a year ago, to 1,200 units. The average dollar amount attached to those transactions also climbed, up 3.6% to just under $359,000. That upward trend is only expected to continue into the second half of 2015, say analysts, pointing to continuing growth in demand resulting from inmigration and the slowing exodus of workers moving to the West to stake their claim in Alberta’s oil patch. Another drop in interest rates and a rebounding economy driven by cheap fuel prices and higher exports will see condo sales continue to tick upward. That scenario is likely to protect the kind of positive consumer confidence needed to drive condo sales in Canada’s largest city.

New Brunswick’s top market for Jan sales activity (YOY % change)

St. John: +61.3%

WHO’S HOT AND WHO’S NOT?

January sales activity (year-over-year percentage change)

Prince Edward Island: +25.4% New Brunswick: +17.8%

Ontario’s top market for Jan sales activity (YOY % change)

Ontario: +6.4%

WoodstockIngersoll: +92.7%

Nova Scotia’s top market for Jan sales activity (YOY % change)

Toronto

South Shore: +26.5%

Nova Scotia: +5.5% Newfoundland and Labrador: +4.7% British Columbia: +3.1% Manitoba: +3%

BEWARE CONDO OVER-SUPPLY

Marc Pinsonneault, an economist with National Bank, says a glut of condo units exists in cities brokers may least expect. Regina and Saskatoon have been overbuilt since 2007, when those cities experienced an influx of oil workers and builders attempted — a little too aggressively — to get ahead of the game. Meanwhile, for the eighth straight year, Montreal ended 2014 with more unsold condos than Toronto, despite having a much smaller population. For its part, Winnipeg has seen its number of unabsorbed condo units skyrocket from 53 in April 2012 to 248 in September 2014.

Yukon: 0% Quebec: -3% Northwest Territories: -16.7% Saskatchewan: -21.3% Alberta: -28.2%

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UPFRONT

NEWS ANALYSIS

The bond market boon The mortgage rate talk has all but centred on ARMs. But the unsung hero for brokers looking to repeat 2014’s hot spring season may be the bond market and the fixed rates it controls

THE VAGARIES of the bond market, and their impact on fixed interest rates, are often enough to trip up even the most seasoned industry veteran when attempting an explanation for clients and, indeed, colleagues. Still, with bond yields primed to lend mortgage professionals a helping hand in 2015, the incentive for figuring out the market has never been greater. “Although recent media reports of an impending ‘rate war’ are a bit optimistic,” says Brad Wilcox of Verico Premiere Mortgage Centre, “I think we will see further reductions in fixed rates between now and fiscal year-

HIGHS AND LOWS: discounted five-year fixed mortgage rates July 1, 2006 November 1, 2007 March 1, 2010 July 1, 2010 November 1, 2010 April 1, 2013 October 1, 2013 March 1, 2014 February 19, 2015

5.49% 5.88% 3.69% 4.24% 3.39% 2.64% 3.38% 2.84% 2.54% Source: RateHub.ca

end, particularly as we move into the spring and summer resale market.” His optimism mirrors that of many brokers across Canada and reflects the sentiment of bank economists at most of the Big Five, who have been acknowledging (albeit begrudgingly) the likelihood that fixed rates will continue to edge lower. That movement

“In this low-interest fixed-rate climate ... it is definitely more common for clients to choose the fixed-rate product; locking into a five-year term under 3% is most attractive” Dianne Smith, Invis effectively steals the spotlight from the variable-rate declines precipitated by a 25-bps chop to the overnight rate in January. Banks were slow in passing on that savings to consumers, although RBC led the rest with a much quicker response to falling bond yields. Each bank, in turn, lowered the rate on its five-year fixed to 2.85%, just a hair lower than the corresponding variable rate. The volatile economy, combined with the newfound willingness of the Bank of Canada to tinker with the target for its overnight rate,

is thrusting the bond market into the spotlight for broker channel players. In fact, there’s growing indication that the littleunderstood market will hold sway in terms of setting broker fortunes in 2015 and beyond. With oil prices down 50% from 2014 highs, analysts are suggesting Canada’s bond yields are primed to move in the same direction, falling to historic lows. It’s a reflection of waning international investor confidence in the loonie, but also of the country’s shortterm economic horizons.

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YIELDS ON REAL RETURN BONDS – LONG TERM February 2010 February 2011 February 2012 February 2013 February 2014 January 2015

1.59 1.31 0.44 0.52 0.96 0.23 Source: Bank of Canada

may have even encouraged a sea change in segments of the market most inclined to gamble on floating mortgages. With fixed rates now, in many cases, below their variable counterparts, brokers are already seeing early signs that even experienced, risk-embracing clients are opting for the safe harbour of the latter. And even more variable-rate devotees could change sides if a growing number of economists are proven right. Analysts at almost all the big banks are now predicting the BoC will again slash its The upside That said, the movement represents a potential boon for mortgage shoppers, with the near 60-bps drop in January primed to bring fixed rates down to their own historic floor. The immediate impact is a decrease in fixed mortgage rates, which, coupled with rising consumer confidence spurred by those cheap oil prices, should draw a growing number homebuyers off the fence and into a hot spring market. Make no mistake, say brokers – that’s a good thing. “The low price of oil has been predominantly a doom-and-gloom story, with an em phasis on the negative outcomes for Alberta and Newfoundland,” Wilcox says. “However, it boosts GDP in the US, which will benefit Canada overall. The combination of cheap gas and a lower Canadian dollar will be a major boost.” From her own vantage point, Dianne Smith of Invis – who’s tracked the pingponging of consumer rate references over the

“I think we will see further reductions in fixed rates between now and fiscal year-end, particularly as we move into the spring and summer resale market” Brad Wilcox, Verico Premiere Mortage Centre last 25 years – points to the pivotal role she and other brokers will play in channeling consumer enthusiasm into the right choices. “Of course, brokers review both product options for variable versus fixed-rate mortgages with clients,” Smith says. “But in this low-interest fixed-rate climate we are currently experiencing, it is definitely more common for clients to choose the fixed-rate product; locking into a five-year term under 3% is most attractive.” The unprecedented decline of bond yields

overnight rate in the first half – if not the first quarter – of the year. While broker channel veterans are convinced many lenders will balk at lowering prime much beyond the current 2.85%, economist are certain bond yields will take another hit, propelling fixed rates even farther down the hill. “Despite … recently lowered variable rates,” Wilcox says, “I believe the five-year fixed will continue to be the product of choice for the majority of consumers and brokers.”

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UPFRONT

HEAD TO HEAD

GOT AN OPINION THAT COUNTS? Email mortgagebrokernews@kmimedia.com or join the discussion at www.mortgagebrokernews.ca/forum

Will broker market share shrink in 2015?

With the Bank of Canada’s move to lower the overnight rate and a corresponding push by the Big Five to grow originations as compensation for shrinking spreads, CMP wondered what the future holds for brokers

Shawn Allen

François Desjardins President and CEO B2B BANK

Mortgage agent DOMINION LENDING CENTRES FUNDS

This question, I assume, is focused on A brokers, and the truth is that [many] A brokers are ... broken by the banks, which are bound to be more aggressive in 2015 because of the lower rates and the need to increase volumes. But the good news is on the alternative lending side, where business is growing due to the tighter regulations on the A side. There, we are finding that the once bankable client is now an Alt-A/B client, and the banks haven’t gone there yet, leaving opportu nity for brokers.

While it’s true that the recent rate cuts put lenders under increased pressure, I still be lieve that there will be plenty of opportuni ties for mortgage brokers in 2015. In addi tion to niche products that they can make available to their clients, brokers are true experts in the mortgage field. They know the market, understand the business and do an excellent job getting to know their clients and their needs. And when they do their job well, it often translates to referrals and repeat business, which is really impor tant in a hot real estate environment.

This is nothing but opportunity with rates being low. If we were in a high-interest-rate environment, then I would say, ‘OK, things are going to get tough, and the newbies will drop out of the market.’ But right now, we’re seeing the lowest interest rates in history. My phone is ringing off the hook because cli ents want to refinance; I have people who want to transfer their mortgage and refi nance. I have a client willing to pay an $18,000 penalty because in three years, he’ll break even and be ahead. There’s so much opportunity to sell.

Principal broker MATRIX MORTGAGE GLOBAL

Mike Marini

THE OTHER SOLDIER IN TODAY’S RATE WAR There’s more competition in town than just the Big Six. While those broad-shouldered banks were slow to pass on the central bank’s rate cut to consumers, sharp-elbowed smaller players were much less reticent. Credit unions have been the most aggressive in reducing their prime rates below the 2.85% of RBC, TD Bank and others. Many have bested that by 10 basis points in an effort to win a rate war that’s only expected to heat up. Still, brokers aren’t taking it lying down. A growing number are now offering variable rates as low as 2.39% on a five-year term. The problem, says one industry veteran, is that many – if not all – are buying down those rock-bottom rates.

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UPFRONT

BROKER NETWORK UPDATE NEWS BRIEFS Network surpasses 100 brokers in Quebec Dominon Lending Centres, one of Canada’s largest broker networks, now has more than 100 brokers working in Quebec, due in large part to the efforts of one hard-working business development professional. “We have quickly grown to number two in Quebec market share… thanks to the determination of Robert Perrier, DLC/CHD’s director of franchise and broker development for Quebec,” DLC said in an official release. “Perrier, who has been with Dominion Lending Centres for almost three years, paved the way for the company’s success in Quebec.”

Canada’s first independent mortgage coalition launches In late 2014, six independent brokerages – CLN Mortgages, MonsterMortgage.ca, Mortgages Edge, Oriana Financial Group, Taurus Mortgage Capital and Intellichoice Mortgage – joined together to create an independent broker coalition, the first for an industry largely dominated by networks. “Our coordinated efforts to best leverage our origination power for positive change, and support from other successful like-minded independent mortgage brokerages in our industry, [will] help create the scale necessary to elevate our industry to a higher level of standard,” said Raj Babber of member broker of CLN Mortgages.

Invis posts record year Invis took home a number of awards in 2014, including two CMAs, while seven Invis brokers cracked the CMP Top 75 and Top 20 small market lists.

“2014 has been an incredible year for Invis Mortgage Intelligence,” said Invis CEO Cameron Strong in an official release. “Having brokers recognized from across the country points to our national strength. And our notable success with helping young brokers and offices rise to the top of the industry showcases how well our core value programs are working for brokers in today’s ever-changing mortgage marketplace.”

Mortgage Alliance acquisition announced A private group led by one of Quebec’s most successful bankers has purchased a controlling stake of a major broker network. Luc Bernard has joined with Pierre Martel and Michael Beckette of the Multi-Prêts/ Mortgage Alliance Group to purchase Mortgage Alliance’s outstanding shares. “I am especially proud of this announcement, which confirms our ambition to make our group the uncontested mortgage brokerage leader in Canada,” said Bernard, the Group’s new president and CEO. Bernard, most recently an executive vice president at Laurentian Bank, has 30 years’ experience in the banking and insurance industries.

Centum launches prequalification tool Canadian broker network Centum has developed a tool that will help clients prequalify for mortgages more quickly and easily. The tool includes an eight-step questionnaire that not only pre-qualifies clients, but also connects them directly with a mortgage broker. “Unlike the traditional mortgage calculator, our pre-qualification tool actually assists consumers in taking the first step in the mortgage process,” said Paul Therien, VP of operations for Centum Canada. “It brings the qualifying process right into the home of the consumer, allowing them to start the mortgage process at their convenience.”

Two brokerages join forces IN WHAT may be a first in the industry, two separate mortgage brokerages – CanWise and Verico North East Mortgages – have entered into a joint venture to allow one to expand into a difficult, yet potentially lucrative market. Could this new model help the broker industry win back market share? “They have been very helpful in helping us get the licensing requirements and all the high-level brokerage requirements,” says CanWise president James Laird. Philippe Simard, a broker with seven years’ experience in the industry, will be responsible for CanWise’s first foray into Quebec. “I already knew James; we wanted to find a way to work together, and he wanted to break into the Quebec market,” Simard says. “I wanted to get all the online services CanWise provides, and North East gives me access to its lenders as well as back-end support.” It’s a unique venture, but one that will result in economic benefits for all parties, says Laird. “It is a partnership, so there are economic [benefits for North East Mortgages],” he says. “The economics are split between CanWise, Philippe and Terry’s brokerage [North East].”

MARKET SHARE SHRINKING

2014

6% 2%

31%

61%

Brokers Banks

Credit Unions

Life insurance or trust companies

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Laird, who helped build True North Mortgage into a national brokerage, left the company this past summer to establish his own fledgling company, CanWise Financial. Although CanWise operated exclusively in Ontario, he hopes this partnership will lead to an increased business in Quebec. “What Philippe brings to the table is excellence in the challenging Quebec market. He has been on his own in Multi-Prêts for over a year now, and I felt he was the right guy to build the business,” Laird says. “Pairing with [North East Mortgages] brought a lot of value

“[CanWise president James Laird] wanted to break into the Quebec market” to the partnership since it is so well established in the Quebec market.” With Canadian brokers losing out on market share to their big bank rivals, this unique partnership could be the key to taking back some of that business. CAAMP’s annual fall mortgage industry report indicates that brokers have lost market share on a year-over-year basis, and most of it has gone to the big banks. “For all current mortgages on homes that were purchased during 2014 up to the time of the survey, 61% were obtained from a bank,” the report said. “Mortgage brokers had a 31% share.”

2013 8%

5% 42%

Brokers Banks

40% Credit Unions

Life insurance or trust companies

MARCUS TZAFERIS Mortgage broker MorCan Direct

Q&A: More network consolidation in 2015? CMP: More independents such as yourself are climbing onboard the network train. Why? Marcus Tzaferis: It isn’t easy running a successful independent brokerage, and the value proposition from some of the larger brokerages is becoming more difficult to ignore. Successful brokers who do well marketing and servicing their clients – both new and existing – don’t need anyone to teach them how to market or keep in touch with their clients. For these brokers, a good compliance and payroll system is all that is required. Having a brokerage network take over this part of the business can seem pretty attractive on most days. It seems more and more brokers prefer to align themselves with a larger brand name. They may require more help getting deals and keeping in touch with their clients, and can therefore benefit from a brokerage that will market them and offer them in-house CRM programs to stay in touch with their existing clients. These larger, marketing-focused brokerages are great for our industry. They build awareness and make using a mortgage broker a more legitimate and trustworthy path for prospective clients. For agents who are just starting out, it is important to find a brokerage that will provide them with the support they need to get started in the business. Looking for the cheapest option will not do them or our industry any good.

CMP: What are the challenges for brokers who continue to stay independent? MT: Increased compliance requirements and maintaining excellent lender relationships would be the two most challenging issues. Once you can overcome these issues, it becomes pretty exciting. Focused independent brokerages can add a great deal of value, through innovation and strategy, to the industry as a whole. Being independent is part of what pushes us to be innovative and motivated.

CMP: What industry changes have you seen due to broker consolidation over the last couple years? MT: The competition for mortgage broker volume is leading to better deals for mortgage brokers looking to find a brokerage to work with. Since brokers have more commission to buy down rates, the additional volume bonuses being paid to some of the brokerage networks may be resulting in lower rates. As long as the focus continues to be on improving the product offerings and level of service to the end consumer, we are heading in the right direction. Going forward, I see brokers using technology to maintain better relationships with their clients.

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UPFRONT

COMMERCIAL UPDATE

With rate change comes opportunity, say industry vets

“The biggest opportunity … is in the $1.5– $2-million-plus range, but there aren’t that many out there who are financing $10-, $20-, $50-million projects,” says Keith Watters of CYR Funding. “I think commercial brokers should focus on the $500,000 to $2 million range. There are opportunities in the commercial areas of stores and apartments, small industrial units, small apartment units under

“The biggest opportunity ... is in the $1.5–$2-millionplus range”

THE BANK of Canada recently made headlines when it surprised the financial services industry – and the country in general – with its first rate change in more than four years. In January, the bank lowered its target for the overnight rate by one-quarter of one percentage point to 0.75%, in response to sluggish energy prices and a faltering economy. As a result, clients are considering refinances, residential brokers are reaching out to stay top-of-mind, and housing across Canada is expected to enjoy the results of cheap money for the foreseeable future. But what does this mean for commercial brokers?

NEWS BRIEFS

“I don’t think it’s having an enormous impact, directly,” says commercial investor Claude Boiron. “People are taking this as a sign that it may not be great for the economy, but in the real estate market for the past couple years, we’ve been expecting rates to go up. People are now thinking we have a couple more years before that’s a consideration again.” According to certain commercial players, the opportunities aren’t equal across the board. Those looking to take advantage of the segment in the year to come are best served by keeping it simple and thinking small, according to one broker.

Plenty of opportunity for commercial brokers this year Despite some uncertainty in the current rate environment, one real estate research firm believes there will be ample opportunity for commercial brokers in 2015. “When you combine the impact of interestrate changes with volatile oil and other commodity prices, demographic shifts, technological developments, anticipated and unanticipated government intervention, and rising global conflicts and terrorism, you get uncertainty – and, accordingly, opportunity – at every turn,” Avison Young wrote in its 2015 real estate forecast.

the $2 million range in outlying areas in the major provinces.” Watters says it’s a good opportunity to contact clients and keep yourself top-of-mind by educating them about the possibilities presented by the current rate environment. The best clients to contact, Boiron adds, are the ones who have been putting off pulling the trigger on their first commercial investments in the hopes that an increase in rates will force desperate commercial property owners to sell at a discount. “The only thing I’ve seen that could have a direct impact … is that anybody who has been … sitting on the sidelines thinking interest rates are going to go up and some people are going to sell who may not want to sell but have to sell, will look to pick up [some properties],” he says.

CBRE: Rate change good for brokers The Bank of Canada’s interest rate cut offers ‘a perfect storm’ for commercial real estate investors, according to CBRE’s quarterly report. “A growing number of savvy investors are looking to take advantage of a declining interest-rate environment that provides them with long-term capital at historically low rates, and strong returns that have outpaced the cost of capital,” Alexandre Sieber, CBRE’s senior VP of debt and structured finance, said in the report. CBRE recommends that investors focus on core assets in 2015, given economic uncertainties.

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Q&A: The effects of stricter underwriting CMP talked to Gay Andrews of Caplink Financial about how stricter underwriting guidelines have affected commercial real estate lending GAY ANDREWS Executive VP and COO Caplink FInancial

CMP: Tight underwriting, courtesy OSFI`s B20 and B21, have impacted both prime and subprime lending on the residential side. What about commercial lending at the big banks? Gay Andrews: At most subprime lenders, underwriting guidelines are the same as they always have been. As for commercial, we find that our institutional lenders are just as aggressive now as they were pre-B20.

CMP: How much tightening in underwriting standards have brokers seen at MICs and other privates? GA: In terms of debt, not so much has changed; however, there is a reduction on commercial development and construction financing. Quite frankly, the reduced amount of available development and construction financing has more to do with the lessons learned in the 2008 subprime crash than it has to do with tighter underwriting guidelines.

CMP: How much has tighter underwriting resulted in more opportunity for MICs and syndicates? GA: On the residential side, those lenders haven’t seen a big surge in opportunities for business – for higher loan-to-value deals, [they] still want to see some income verification. And on the commercial side, deal flow has remained relatively

Commercial brokers fix their sites on Target With Target nixing its Canadian expansion bid, commercial brokers may be able to cash in on a number of deals that will likely take place over the next year. One hundred and thirty-three commercial retail properties are now up for grabs, and while many current owners may hold out in the hopes that rival big-box entities will take over the leases, some will likely look to sell. The properties are expected to sell for $1.8 to $2 billion, according to CIBC World Markets retail analysts.

consistent, with more requests to finance development and construction than we saw before.

CMP: What types of commercial deals provide lenders the biggest challenges in terms of underwriting? GA: Three jump to mind: Land-inventory loans, land-development financing and construction financing.

CMP: What, then, should brokers do in order to better present those types of files? GA: Really, they need to do their due diligence and get as much information upfront from their clients. The brokers themselves must understand the project in order to present it fully to the lender. The broker must also advise their clients – even experienced clients – that they may require additional equity in order to secure financing.

CMP: Considering the Bank of Canada’s recent move to lower the national GDP forecast to 1.9% for 2015, what kind of slowdown should brokers and their commercial lending partners expect? GA: At this point in the year, we have not seen a reduction; however, it’s really anybody’s guess as to what the latter half of the year will bring.

Ottawa saw sluggish 2014 for commercial real estate Commercial real estate in Ottawa struggled in 2014, according to a report from Colliers International. “The Ottawa commercial real estate market has had a tough year, as evidenced by a 16% decrease in total transaction volume in 2014 compared to 2013 for all asset classes,” said Oliver Tighe, director of valuation and advisory services. Colliers forecasted a substantial uptick in transaction value and volume for 2015, but said that owners with older properties may need to upgrade their buildings to stay competitive.

Swing back to prosperity for Toronto brokers After a lackluster first half of the year, the GTA office market closed out 2014 on a high note. “Though leasing velocity was relatively strong heading into and throughout 2014, it didn’t translate into increased occupancy levels until the second half,” said Bill Argeropoulos of Avison Young. “Going into 2015, some concerns remain about the threat of rising sublease space, due to ongoing space-planning efficiencies among tenants of all sizes, as well as the large development pipeline and looming back-fill vacancy.”

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PEOPLE

INDUSTRY ICON

FROM BUILDER TO BROKER It’s no surprise to anyone who knows him: John Thompson of TMG The Mortgage Group has spent his career seeking and building relationships. The reason for that emphasis is a tale unto itself, writes Samo Ayoub

AMONGST THE many skills necessary to succeed in the mortgage industry, partnership management can be the most difficult to learn. Who hasn’t heard a colleague or boss offer the old saw: “You either have it or you don’t”? Who, in fact, hasn’t believed it? One broker who’s always understood the power of strong relationship-building is TMG The Mortgage Group’s John Thompson. The Alberta-based broker seems to have that oft-mentioned, hardto-pinpoint ‘it.’ Starting out in development, Thompson transitioned to mortgages in 1996 when he became a member of the Real Estate Council of Alberta [RECA]. Since then, he has spent the majority of his time building and strengthening partnerships – to the point where he now has access to more than 40 lenders with a variety of specialties. Despite a funded volume little can match and a body of work that spans to almost every corner of Alberta, his favourite part of the job remains one thing: developing talent. “For me, it has always been a joy to watch young professionals develop in their training and rise to be a star in the

industry,” he says, pointing to the increasingly important relationship of student and mentor. People person This passion for people began when Thompson was himself just starting out. As a young man, he found he could often con-

“If someone comes to me with a problem … chances are I have come across it so many times in the past that the solution is usually on the tip of my tongue,” Thompson says. Detail oriented Many brokers have stressed the idea that

“When you start to look at each deal not like a numbers game, but a people game, that’s when things really start to happen. Sincerely delivering on the service aspect, making sure people get the deal ideally suited for their situation, is all the marketing you’ll ever need” nect or find common ground with almost anyone he met. Over the years, he found networking to be a critical component of industry life, and now he calls upon a lifetime’s worth of experience to easily find solutions to any given challenge.

there is more to a mortgage than a rate. Ensuring that every ‘i’ is dotted, so to speak, eliminates unforeseen challenges, mitigates risk and ultimately leads to a better and more positive final result. This, for Thompson, is the foundation of good

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â&#x20AC;&#x153;If someone comes to me with a problem ... chances are I have come across it so many times in the past that the solution is usually on the tip of my tongueâ&#x20AC;? www.mortgagebrokernews.ca

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PEOPLE

INDUSTRY ICON THE BOOK OF JOHN After a lifetime in the industry, John Thompson is shares his secrets to success:

Thoroughness business relationships and one of the key factors behind his success. “Operating efficiently, looking ahead and making decisions quickly saves you time, but everyone knows time is money,” says Thompson. “That’s part of the benefit of experience. The other part is the ability to ensure every detail is covered.”

don’t advertise, but I actually consider that a point of difference [for me],” he says. “Not to take anything away from marketing – it does and can bring it leads. [But] skipping that and dealing with people you’ve worked with in the past, or know someone you’ve worked with, is always better.”

“Operating efficiently, looking ahead and making decisions quickly saves you time, but everyone knows time is money. That’s part of the benefit of experience. The other part is the ability to ensure every detail is covered” Word of mouth Thompson’s network of relationships also has given him another benefit – the ability to eliminate advertising spending. Leads often can come and go as fast as they are generated; however, an established relationship can ensure earnestness and keeps things “on the level,” as Thompson puts it. This improves efficiency by cutting down on unnecessary back and forth or complications that can arise from a lack of trust or an established understanding. “Most people are shocked to hear that I

While some mortgage brokers advocate tenaciousness as the key to industry success, and others claim that the lowest rates win out, Thompson says that, while those are important aspects of the business, there simply is no substitute for solid relationships. “When you start to look at each deal not like a numbers game, but a people game, that’s when things really start to happen,” he says. “Sincerely delivering on the service aspect, making sure people get the deal ideally suited for their situation, is all the marketing you’ll ever need.”

“Not only does this help ensure client work is done right and the deal goes through, but it saves you time. There are time wasters out there. If you’re going to succeed in business, you have to figure out what or who the time wasters are and get rid of them.”

Honesty

“Many of the people you talk to are full of bull. They’ll say anything to get a deal. I tell all of my people to ‘under promise and over deliver.’ I’ve held myself to that standard for a long time, and it has paid off.”

Diligence

“If we’re not profitable for our lending partners, then they’re no longer our lending partners. Same goes for client work on deals that don’t make sense or work. Making sure you meet those expectations, is how I define diligence.”

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24/02/2015 5:51:08 PM

FEATURES

COVER STORY

THE DIVERSIFIERS Mortgage brokering players may be their focus, but many brokers are surging ahead with a host of other products. CMP sheds some light on those alternative revenue streams

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Diversification by the numbers DIVERSIFICATION HAS been a buzzword in the mortgage industry for some time – and adding more product lines can mean more revenue streams for firms that are prepared to take on the extra work. But should brokers break out of their traditional roles to diversify into other financial products? The amount of regulation in all branches of the financial services industry means there’s a limited number of extra products brokers can offer before needing additional, extensive training. So the question becomes: Is the benefit worth the effort? The answer, according to CFFBank marketing project manager Ruvani Pieries, is a resounding yes. Brokers who become CFFBank Centre owners get access to the company’s retail banking products – access that gives them an advantage over competitors who haven’t diversified, Pieries says. “It’s being able to do more for their clients and keep more of the relationship. Instead of a bank taking on more of your accounts, the mortgage broker is the trusted professional,” she explains. “Our whole philosophy is that we’re empowering the mortgage broker and allowing him to keep his clients’ business. They have a stronger bond and a stronger relationship because they now have the banking products as well.” But what do brokers think? CMP asked brokers who have successfully diversified

How important is diversification of revenue to mortgage brokers, and how many of them have diversified their businesses? To find out, CMP surveyed 100 mortgage brokers, asking them if they’d diversified, which alternative products they focused on, which products they thought had the best revenue potential and whether diversification was becoming more or less important. Here’s what they had to say.

WHAT PRODUCTS ARE YOU FOCUSED ON?

Syndicated mortgage referral

HAS YOUR BROKERAGE DIVERSIFIED OUTSIDE MORTGAGE ORIGINATIONS?

YES 54%

46%

IS THE NEED FOR REVENUE DIVERSIFICATION GROWING OR DECLINING?

18%

86% Growing 14% Declining

Insurance

40%

WHAT ALTERNATIVE REVENUE STREAM IS THE BEST FIT FOR BROKERS? 50% 40%

Financial advice

20%

30% 20% 10%

Consumer loans, credit cards

22%

s, ce ce oan s ted ral l dvi ran r a u e ica refer d l r s d a m a i n n I u c c s it Sy ga ge an Con cred Fin rt mo

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FEATURES

COVER STORY BROKER Q&A: SYNDICATED MORTGAGES KEVIN BYWORTH is a mortgage agent for Verico Premiere Mortgage Centre in Ontario. One of his specialty products is syndicated mortgages, which allow several investors to pool their money for one mortgage instrument. CMP: What is it about syndicated mortgages that make them attractive to clients? Kevin Byworth: Many of my clients over the past several years have talked to me about investing in property, but those investments can be risky. So when the syndicated mortgage was shown to me, I really liked it. Clients’ interest in the title may be quite small, but at least they have claim to the title, and that gives them more security. CMP: What benefits has your business seen from offering syndicated mortgages? KB: It has two real benefits. One is the revenue that comes from it. The second thing is, it’s made my clients more loyal to me. … I’m building a fence around them. That’s pretty much the way I look at it. CMP: Is diversification right for every mortgage broker? KB: I think you need to be ready for it. I think people need to look at their business model. If people are going to be just transactional, and they think they’re making enough money at that and think they’ll continue to do so for another 10 or 20 years, that’s fine. … But [diversifying] speaks to bringing more to the table. The more we can do that, the better relationship we’re going to have with our clients.

“[The syndicated mortgage] has two real benefits. One is the revenue that comes from it. The second thing is, it’s made my clients more loyal to me. ... I’m building a fence around them” Kevin Byworth, Verico Premiere Mortgage Centre

to talk about the advantages – and the pitfalls – of offering other financial products. They agreed that diversification may not be for everyone, but it offers its own unique set of challenges and rewards. Areas of diversification There are many alternative revenue streams brokers can tap into: syndicated mortgage referral, insurance, financial advice, even consumer loans and credit cards. Among brokers surveyed by CMP, more chose insurance as their main alternate revenue stream than any other product. For Gord McCallum, president of First Foundation, offering his customers a comprehensive insurance line in addition to mortgages was the way to go. “We have a general insurance brokerage,” he says. “We have home, auto and commercial lines of business. We also have life insurance and financial planning division.” Andre Semeniuk, a mortgage planner with Mortgage Architects and a CFFBank Centre owner, says his company decided to offer a broad array of financial products. The move allows his customers to get a mortgage, purchase mortgage and life insurance products – even apply for unsecured lines of credit. “Ultimately we will also have the ability to provide all our clients with all of their regular day-to-day banking, which will keep these loyal clients away from the bank branches,” he says. One-stop shopping Their array of product offerings effectively makes both McCallum’s and Semeniuk’s opperations one-stop shops for a variety of financial services. But is being a kind of financial clearing-house essential to success? Semeniuk thinks so. “Being a one-stop shop is the cornerstone for the future for any mortgage brokers [who] expect to prosper and build a better book of business,” he says. But McCallum has a different view. Being a one-stop shop can grow your business, he says – but it’s not something all

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24/02/2015 7:21:08 PM

FEATURES

COVER STORY “People say, ‘I don’t want to learn two different professions. I’m not going to serve my clients well by being a jack of all trades.’ We actually agree with that. We ask our employees to be specialists. ... We try to collaborate as much as possible, but everybody has their own focus” Gord McCallum, First Foundation brokers are ready for. “I don’t think it’s necessary in order to succeed – or even necessary in order to diversify – but it was the decision we made,” he says. “We felt it was in our clients’ best

interest to offer more than one line of business to them … but it’s going to be up to every business owner, and there are risks and rewards. There’s the risk of losing focus. Sometimes there’s the risk of hurting your

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core business by starting something else. There are lots of reasons not to do it, but there are reasons to consider it for sure.” McCallum warns that diversification doesn’t mean a career mortgage broker should suddenly start selling insurance or offering his customers lines of credit. If you want to diversify, he says, you need to have dedicated specialists to handle those products. “People say, ‘I don’t want to learn two different professions. I’m not going to serve my clients well by being a jack of all trades.’ We actually agree with that,” McCallum says. “We ask our employees to be specialists. We have mortgage brokers and insurance brokers and financial planners. We try to collaborate as much as possible, but everybody has their own focus.”

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ARE YOU READY TO DIVERSIFY? Diversification can add revenue streams to your business, but not every brokerage is ready to diversify. Gord McCallum, president of First Financial, offers three keys to successful diversification. 1. BE PREPARED. “I’d say anybody who wants to [diversify] better have an infrastructure behind them,” McCallum says. “An individual trying to do too many things – it’s going to be hard to do all those things. I was fortunate to have a team and structure in place before I started to diversify. I don’t think I could have done it all at once.” 2. DO YOUR RESEARCH. Figure out which product is right for your clients. “I think it’s up to every business owner to decide how best to serve their

clients,” McCallum says. “I think if a business owner does his homework, he’ll find a product that serves his client well.” 3. DON’T OFFER OTHER PRODUCTS JUST TO OFFER THEM. “If it’s just, ‘What else can we sell that we can make a buck at,’ I think that’s putting the cart before the horse, and it tends to be misguided and a little disjointed,” McCallum says. “‘Mortgages are good business, and so are tires, so let’s sell both.’ Well, that might not work.”

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FEATURES

COVER STORY BROKER Q&A: CONSUMER LOANS VITTORIO OLIVERIO, owner of Centum Professional Mortgage Group, offers personal loans and other financial products in addition to mortgages. He says that in today’s regulatory environment, diversification is a must. CMP: How does offering personal loans help your clients? Vittorio Oliverio: I think the biggest thing with the Easy Financial personal loan is that we can offer it to clients with credit issues. One of the drawbacks when a person has credit issues is they usually have collections or bad debts. These personal loans allow the client to get some money to start paying down those collections. Now those clients can go to one stop to build their credit or pay off their debt. Previously, we would give them the same information, but they would always have to borrow money from friends or find some other way. CMP: Do you find that offering these loans can feed clients back into your mortgage business? VO: In a way, this program came at the right time, because with more and more rule changes and guidelines about getting mortgages, this gives you help now, gets you back on your feet, and we can teach them how to pay the loan off as quickly as possible. We had one client who needed some help, and their Easy Financial loans were the reason they were able to get a mortgage. They paid them off, and within six months they were able to get a mortgage. CMP: Is diversification mandatory for success in today’s mortgage industry? VO: It has helped, because we have a different thing to talk to clients about, not just mortgages. Yes, we’re mortgage brokers – that’s the main thing. But if we don’t diversify into something else, we’re going to be lost like the dinosaurs.

“One of the drawbacks when a person has credit issues is they usually have collections or bad debts. These personal loans allow the client to get some money to start paying down those collections. Now those clients can go to one stop to build their credit or pay off their debt” Vittorio Oliverio, Centum Professional Mortgage Group

Potential pitfalls Diversification isn’t necessarily an easy road, and there are potential hazards to avoid, McCallum says. Those hazards can range from the obvious, such as regulatory confusion, to the not-so-obvious. For instance, McCallum says, offering an array of products can result in information overload in the marketing department. “I think from a marketing standpoint, you have to be careful not to dilute your messaging,” he says. “If it creates any client confusion about what you do or who you are, you could end up leaving some business on the table. If you’re a multidisciplinary firm, people might feel overwhelmed and overloaded. It’s a unique kind of marketing challenge. It increases the complexity of your message, and also the volume of marketing content – especially if you’re marketing online.” There are also cost management issues to be aware of, he says. “There may be some overlap in costs, and you want to make sure you’re managing those expenses well. Hopefully there are some efficiencies that can be gained by teaming up.” There are also technological issues to overcome. Each industry has its own systems, and there may be technical hurdles to overcome in getting those systems to play nicely with each other. In addition, McCallum says, once those systems can talk to each other, there are client privacy concerns to address; for instance, the insurance side doesn’t need access to all of the client’s mortgage information, nor the mortgage side access to all her insurance details. And then there’s the headache of dealing with whole new sets of regulations. “From the regulatory standpoint, it’s not for the faint of heart,” McCallum says. “It’s definitely a burden you have to weigh before you go in there.” Because of its varied product offerings, First Financial has at least three government regulators to deal with, McCallum says. And it isn’t simply a matter of keep-

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25/02/2015 1:31:17 PM

THE PERILS OF PAYDAY LOANS THERE’S A QUESTION many diversifying mortgage professionals are asking themselves: Should I diversify into payday loans? Payday loans offer tremendous revenue advantages, but does the industry’s bad name reflect poorly on brokers who offer them? Paul Therien, vice president of operations for Centum Financial Group, recommends staying away. “Everybody’s business plan is different, but I would encourage [brokers] not to, personally,” he says. “If you look at it strictly as a revenue stream, it’s an excellent revenue stream. … But I think at the end of the day, it should always be about what’s in the

best interests of the customers – and not just short-term. As mortgage professionals, we need to look at what’s in our customers’ best financial interests over the long term.” Payday loans are the fastest-growing consumer credit segment in Canada. But with an average interest rate of 500%, they can be dangerous for customers. “Payday loans are a slippery slope for customers,” Therien says. “I’ve heard some people refer to them as legalized loan sharks. Do you want to have that sort of image associated with your business?”

Ultimately, Therien believes the negatives of payday loans outweigh the positives. “Payday loans, in my mind, are in a grey area. And anytime you’re looking at something in a grey area, you need to be careful,” he says. “If we’re going to market ourselves as professionals, we must always conduct ourselves in that way. Sometimes that means doing things that hurt the bottom line, but at the end of the day, are the right thing to do. And hurting the bottom line is usually a temporary thing. Businesses that do the right thing are generally around longer. You might not get to the top as quickly, but once you’re there, you’ll tend to stay longer.”

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FEATURES

COVER STORY BROKER Q&A: BANKING SERVICES ANDRE SEMENIUK, a mortgage planner at Mortgage Architects, says his firm provides a variety of banking services to its clients in addition to traditional mortgages. The firm provides banking products through CFFBank, which allows mortgage brokers access to an array of banking services. CMP: What’s the advantage of offering banking products along with mortgages? Andre Semeniuk: Providing a range of bank products allows us to assist all of our clients’ needs rather than being just their mortgage broker. We are primarily mortgage brokers, which remains our core business, but retail banking products complement what we are doing now. CMP: Is diversification a must in today’s industry? AS: Diversification on product offerings is critical to a mortgage broker’s growth. [It] allows them a unique selling feature not readily available from their competition. Our basic principle is doing more for clients so that they will continue to introduce us to potential mortgage clients. [It’s] important to our business model that all our agents engage in providing more bank products to all potential mortgage borrowers. … We see no pitfalls providing more than just mortgages.

“Diversification on product offerings is critical to a mortgage broker’s growth. [It] allows them a unique selling feature not readily available from their competition. ... We see no pitfalls providing more than just mortgages” Andre Semeniuk, Mortgage Architects, Canadian First Financial Agent

ing the regulatory requirements of three separate industries in mind; there are privacy implications between lines of business that cause regulatory overlap. “If you want to grow, you throw in multi-provincial regulators,” McCallum says. “In theory, we could end up with three regulators per province.” If you manage a branch with a diverse range of products, on the other hand, you might have fewer regulatory headaches. “[Mortgage Architects] continues to handle all of our mortgage compliance needs, which allows us more time to concentrate on building a better business, rather than spending time with regulators,” Semeniuk says. “CFFBank is responsible for all our retail bank product compliance protocol.” Advantages of diversification Despite the challenges, brokers say diversification brings with it significant rewards – for both the business and the client. From the potential to save money when bundling products to the sheer convenience of being able to shop for different financial services in one location, clients can benefit from diversification as much as brokers. “As long as there’s a consistency of service for each line of business, a consistency of expertise and a consistency of value – as long as the client feels comfortable and at ease with one, they should feel consistent and at ease with the others,” McCallum says. And offering a diverse array of products can keep clients coming back, says Semeniuk. By providing more than just mortgages, brokers can deepen their relationship with their clients, keeping customers coming back to them – and not the local bank branch. “The convenience is there,” McCallum agrees. “When people are able to purchase more than one line of service from you, it’s better for the business, and we want to find ways to make it better for our client as well.”

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FEATURES

COVER STORY THE INS AND OUTS OF CONSUMER LOANS Many brokers are diversifying into a new product: smaller, short-term consumer loans that allow customers access to the money they need without the expense and hassle of refinancing their mortgage or taking out a more traditional bank loan. Centum Financial Group offers consumer loans of up to $5,000 – soon to be $10,000 – with terms up to 36 months. Paul Therien, vice president of operations for Centum, says offering consumer loans gives mortgage brokers more options to help their customers. “The primary benefit to the mortgage broker is that it provides them with the opportunity to better service the Canadian consumer,” he says. “If someone needs to

“It’s very important to understand that mortgage brokers’ core competency is mortgage. However, the more products you offer that make sense and that align with your core business, the stronger you are” Paul Therien, Centum Financial

have work done on their home, the options for financing are more and more limited. You either get a loan – and it’s very difficult to get a loan for under $10,000 from a bank – you put it on your credit card, or you refinance your home, and the cost to refinance your home all in is significant. Yes, the rate of interest on a mortgage is lower, but if you look at the term of interest you would pay on a mortgage to pay off $10,000, you pay a hell of a lot of interest on that. And when you’re combining in fees and penalties and things like that, it’s just not worth it.” The advantage to the consumer loan program, Therien says, is that it allows consumers to borrow money for the short term. The maximum loan term is 36 months, and customers can pay off the loan at any time. “So if you actually look at the interest paid out of pocket by the consumer,” he says, “it’s significantly less than they would pay with a fixed-term loan from a bank, which is much more complicated.” Another advantage of the loans, Therien says, is that customers with weaker credit are more likely to qualify for them than traditional loans. “If you get a customer in your office who’s had credit challenges in the past, typically

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your options to help those customers are to put them in a private mortgage and hope they can find the facilities to repair their credit over the term of that, or you turn them away. This provides the broker a better opportunity to hook that customer because they’re going to be providing a service.”

“The compensation on these loans is not huge ... but I don’t believe that’s the main reason you should do ancillary sales. If your focus is quality service ... your business grows exponentially because you’re providing service the consumer didn’t expect” Therien says offering consumer loans makes sense for many brokers because the product aligns well with what they’re already selling. “Diversification of your business has a lot of benefits in terms of your ability to assist the consumer … but it’s very important to understand that mortgage brokers’ core competency is mortgage,” he says. “However, the more products you offer that make sense and that align with your core business, the stronger you are.” And while brokers shouldn’t expect to double their revenue by offering consumer loans, Therien says the product provides an even greater reward: satisfied customers. “The compensation on these loans is not huge … but I don’t believe that’s the main reason you should do ancillary sales,” he says. “If your focus is quality service, offering opportunity and options, your business grows exponentially because you’re providing service the consumer didn’t expect.”

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FEATURES

SYNDICATED MORTGAGES

Return on investment In an already convoluted economic landscape, establishing new revenue streams can be exhausting. A leading syndicated-mortgage player is helping brokers bridge the gap and cement themselves as an aide for clients seeking high-return investments. Chuck Long, national sales manager for Titan Equity Group Ltd, sat down with CMP to provide details DIVERSIFICATION. Many brokerages long for it, but few can streamline with enough efficiency to establish two core competencies. One company now helping them achieve that goal is Titan Equity Group. Based in Vaughan, Ont., Titan has a proven ability to help brokers bridge the specialization gap, stemming from the concentrated efforts of president and CEO Lance Kotton and project developer Peter Santos. With a brand presence that espouses core values like trust, transparency, and tenacity, their success has hinged on the experience and diverse backgrounds of their leadership. And, since good leadership is smart delegation, the front-line efforts of key staff such as national sales manager Chuck Long have certainly helped speed things along. “The thing that sort of separates Titan from everyone else is the way we set things up to our client’s advantage,” he says. “There are very specific things we do that no one else in the industry does, and that is entirely geared toward client services.” While the claim is bold, Long goes on to explain the process of how new investors are on-boarded. When a new investor first invests in a Titan project mortgage – a syndicated investment – they receive key safeguards such as placement on the property’s title. No matter how many investors are listed on a project, everyone with money down on a particular investment has their name listed on title at the land registry office. Titan is the only company dealing in syndicated mortgages that does this, notes Long. Another safeguard in place is a progressive interest reserve solution. Essentially, for the

duration of a mortgage, the interest payments are set aside in a lump sum on closing day. What this does is leave enough money to provide all the monthly payments necessary for the term of the mortgage. That said, investors can trust that all payments will be made once they become due. To ensure impartiality, the entire program is supervised by an independent, third-party administrator. A testament to Titan’s tenacity – and a bragging point for brokers steering clients to Titan – is that it is the only company in the syndicated mortgages segment that not only raises capital

but also acts as developer, says Long. “We’re raising money for our own projects,” Long says. “We have money in every project, and we ensure that we’re the last ones to get paid when a project closes. We don’t charge any upfront fees – again, that’s simply nowhere near what any other company in the space is doing.” Typically, companies such as builders or fundraisers for developers take their money out first. That may force investors to shoulder more risk. Titan’s client-first approach sets it apart. “One of the most important things we do is an appraisal on every property or project we

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News

InternatIonaL

u.s.

90.6% 52.1%

inspectors have found problems; appraisals showed a home was worth less than the bid; a buyer lost a job before the closing. U.S. housing market worse than thought More than two years after the recession The number of Americans who bought previously offi cially ended, many people can’t qualify for occupied homes rose in October. But the National engage in,” Long says. “That appraisal is done of sophisticated brokers are looking for as they loans or meet higherFACT down payment Association of Realtors says it overstated more than TITAN SHEET by certified appraisers, based on current propweigh options not only for clients looking for requirements. Even those with excellent credit three million sales during and after the Great Recession, erty value.” investment opportunities, but also to broaden and stable jobs are holding off because they fear showing the housing market was weaker than Percentage of pace of that Who:keep Titanfalling. Equity Group is aare realalso estate As an example, their own revenue streams. Titan’s cre- home prices will Sales previously thought. if one acquires a property homeownership development and investment thatThe is private bare-ground-ready for development, ating innovative safeguards and progressive being hurt by a decline in first-time buyers, who trade group says sales rose four per costs, including are critical to reviving the offering housing cent inwill October to a seasonally adjusted annual of continues company twomarket. investment Titan appraise the true, current value of rate policies to attract mortgage profesmortgage payments, Sales have fallen in four of the fi ve years 4.42 million. That’s below the roughly six million homes products that property. This allows an accurate, realsionals focused on using their books to cultivate utilities and property since the housing boom went bust in 2006. atime yearassessment that economists say are consistent with a healthy of value when it comes time referral opportunities in take the MIC taxes that up a and syndiDeclining prices and record-low mortgage rates housing market. But it’s ahead of 2008’s revised sales, What: Titan’s mission is to provide to communicate loan to values to potential cated mortgage space.household’s typical haven’t been enough to boost sales. now considered the worst in 13 years. profitable growth through superior real clients. Titan’s syndicated mortgage monthly pre-taxpresents nov-At the same time, home construction has The trade group revised its sales from 2007 to 2010 income in Vancouver estate investment products. Theto the begun a gradual comeback and should add down 14 per cent, from more than 20.6 million to nearly and Toronto, company boasts approximately $150 economy’s growth in 2011 for the first year since 17.7 million. Among the reasons for the lower figures, respectively (RBC million of built-out value since its the Great Recession began in 2007. Last month, the Realtors group says: changes in the way the Census Economics Housing builders broke ground on an annual rate of Bureau collects data, population shifts and some sales inception. Trends and 685,000 homes, the government said recently. being counted twice. Affordability Report) That was a 9.3 per cent jump from October and The Realtors consulted with government and

“There are very specific things we do that no one else in the industry When: Titan was founded in May 2012 April 2010. private housing experts, includingand the Federal Reserve, does, that is entirely geared the fastest pace since Most economists say home prices will keep the Department of Housing and Urban Development, Where: Titan is headquartered in falling, by at least five per cent, through 2012. the Mortgage Bankerstoward Association, the National services” Chuck Long client Vaughan, Ont. a rebound in prices Many forecasts don’t foresee Association of Home Builders, mortgage giants Fannie

until at least 2013. Mae and Freddie Mac and CoreLogic, a California-based Company values: Trust, transparency, sitraised down doubts with clients foreclosures has made data“We firmactually that first aboutand thesay, annualice and experienced investors alike with theThe high rate of resold homes cheaper than new ones. The numbers earlier this year. tenacity ‘Your $100,000 investment is a certain peropportunity to obtain a lucrative alternative median price of a new home is roughly 30 per CoreLogic has estimated that the Realtors group centage of the loan to value,’” he says. “Other investment to preserve, grow and generate cent above the price of one that’s been occupied overstated sales in 2010 by at least 15 per cent. Projects: Rockwood towns, Vista companies out there use estimated future value income at above average rates of return, says before – twice the normal markup. Investors are The changing numbers could affect how economists Bahia, Villa Del Sole, Kotton Cachet, The based on the value it should be worth when Long. That’s while knowing exactly how taking advantage of the discounts. view the trade group’s data. It could also affect companies Oxford, The Windsor building permits or expansion other various that use the figuresare for issued hiring and plans. much they will receive and when they willThe housing market is struggling even projections. feel it’swhen extremely receive it. as the broader economy has improved in Sales areWe measured buyersimportant close on homes. thatmany we enforce a high level of before transparency to Diversifying and value-adding can be chalrecent months. But deals are collapsing that point. One-third of Realtors saidunderstand they had atwhat leastthe one contract ensure that the clients lenging to achieve. However, with the rightThe economy grew at an annual pace of two scuttled up from 18 can per actually cent in September. propertyinisOctober, worth today so they see direction, experience and mentorship, per one cent in the July-September quarter. Many economists expect slightly better growth in the Contracts are being cancelled for several reasons: some current equity in the project.” man’s challenge can become another’s future October-December quarter. CMP Banks have declined mortgage applications; home That reassurance is what a growing number revenue stream.

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PEOPLE

BROKER PROFILE called Clifford to see if he might have any interest in becoming a mortgage broker. The friend had a vacancy at Invis, which is a major force in the Canadian mortgage industry, boasting more than $140 billion in total mortgage originations, upwards of of 625,000 clients and 10 regional offices. Though Clifford was considering several options, he found himself continually returning to the idea of becoming a broker. “Not only did it allow me to spend all of my time working with clients, it offered such a wide selection of lenders,” he says. “I was used to having the products and services of one financial institution, so this was an added bonus. After a couple of months of research, brokering seemed like a great fit for me, so the decision was made.”

ONE ON ONE A desire to connect with borrowers drew Greg Clifford to the mortgage industry, and his client-focused approach has propelled him to success. GREG CLIFFORD’S greatest joy as a mortgage broker? Spending time with his clients. “I can spend as much time with my clients as is necessary to help them with what will likely be the biggest purchase of their lives,” says the Invis broker, based in Duncan, BC. “As brokers, we have a lot of products and options to offer our clients. We are a one-stop shop for mortgages and specialize in lending, as opposed to a lot of the banks, which have employees sharing their time between wealth management,

lending and other bank duties. We are focused on our clients, not our employer, and we only perform lending functions.” Clifford came to the mortgage industry after a quarter of a century in finance and banking, spurred by a desire to put in more time with clients and less time dealing with red tape. “Being in a corporate environment meant more time in meetings and dealing with politics and less time helping clients with their credit requirements,” he says. Providence intervened when a friend

Finance coach His new career has afforded Clifford the opportunity to use his background in consumer and commercial credit while also spreading his wings to focus on a variety of different types of consumer borrowers. The most challenging cases, he says, are with self-employed clients, as well as those who are credit-challenged or firsttime borrowers. “You learn early on that you need to be a good listener and be their coach,” he says. “We can’t assume that they understand mortgages and credit, so care must be taken to ensure that they understand the process and what is required to qualify for a mortgage.” This entails taking the time to explain both the benefits and the risks of the various options available to clients so that each one can make a decision based on his or her individual needs. In addition, Clifford makes sure his clients know that their financial situation will likely change over the coming years, so it is incumbent upon them to keep their credit in good standing to make sure their mortgage has the best options for a changing lifestyle. When it comes to the more challenging cases, Clifford finds himself working closely with clients in order to get a plan in place to improve their credit or consolidate debts.

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“The credit box is getting a lot more restrictive these days,” he says. “Just because someone doesn’t qualify for their mortgage financing today, with some coaching, they may be able to over the next 12 to 24 months.” Clifford’s work puts him in a position to work one-on-one with these clients to help improve their creditworthiness. “A lot of consumers don’t understand the importance of handling their credit

the credit process and feels that a continual tightening of credit rules is neither effective nor beneficial to consumers – or to the market in general. “Clients who would have fit the lending criteria a few years ago and who don’t qualify now still have credit requirements,” he says. “We are often able to find solutions from private sources, but at a higher cost.” Clifford has a few words of wisdom for those who are first entering the mortgage

“It is tough to get started in this industry, and you will need all the help that you can get. This support includes marketing, access to lenders, training, payroll, compliance and licencing – the list goes on and on. The more help you get for these day-to-day issues, the more time you will have to find clients and get referrals” responsibly,” he says, “and how a few simple changes to how they handle credit can change their financial outlook.” A challenging environment Certainly there are other challenges for mortgage brokers. Clifford cites the many regulations that have tightened up mortgage qualifications over the past few years, such as beefed up eligibility restrictions for government-backed mortgages, designed to cool down the market and nudge out marginal would-be buyers. “While some of these changes were prudent and designed to protect consumers from overspending,” Clifford says, “the changes in audit procedures and paperwork from financial institutions is becoming very onerous.” Historically, he notes, Canada has been conservative with mortgage credit, with common sense used in credit decisions. However, he now believes that the country is moving away from that common sense. He hopes to see a better balance return to

field: Newcomers should be aware that they are on commission and that it will likely take several months before they start earning an income, so they need to be realistic in their expectations and be prepared to weather the storm for a while. He also lists a few key elements for success: having a good network, possessing strong marketing skills and working in association with a full-service brokerage company. Understanding credit is a helpful thing, but newcomers must primarily be able to attract clients. Success at marketing and networking, he says, will offer a good position for success in the industry, and association with a successful brokerage firm also increases chances of doing well. “It is tough to get started in this industry, and you will need all the help that you can get,” he says. “This support includes marketing, access to lenders, training, payroll, compliance and licencing – the list goes on and on. The more help you get for these day-to-day issues, the more time you will have to find clients and get referrals.”

GREG CLIFFORD’S CAREER TIMELINE

Winnipeg, MB 1976 Clifford graduated from college in Winnipeg, beginning a career in the credit industry that would span eight years and four provinces. He started as a financial representative and was quickly promoted to branch manager.

Alberta

1983 When his employer went up for sale, Clifford left for Alberta to work for a credit union. Hired as a branch manager, he worked for several branches, learning commercial and farm lending. Despite the strong opportunities, however, the cold weather got the best of him, and he left to seek a warmer climate.

Vancouver Island, BC

1992 Clifford moved to another credit union on Vancouver Island, working at two different locations, first as branch manager and eventually as manager of lending services.

Duncan, BC 2002 Clifford left the credit union, and, after a brief stint with his own commercial lease company, he joined a friend as a mortgage broker in Duncan, where he works today.

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FEATURES

MARKETING

How to use video to grow your business

Videos that promote your business and inform potential customers are now expected by the vast majority of visitors to your website. Video production expert Geoff Anderson reveals what content your potential viewers are looking for IF YOU want to stand out from your competition and be seen as an expert mortgage advisor, video is an essential tool in showcasing your unique skills and point of difference. Video has the power to move your audience. It can engage them with compelling information and, more important, can connect with your audience emotionally. After all, selling is an emotional sport, so you may as well play the game well! For many, approaching a mortgage broker can be an anxious experience. Purchasers probably have their heart set on a new home (or a first home), and they are hoping they will be able to borrow enough cash. With the right type of video, you can assure them that you have the answers and solutions to their borrowing situation. Video allows you to build rapport before you have even met your customer. It allows you to show some personality and build trust in an authentic way – in a way that is far more powerful than the written word or that corporate headshot on your website or LinkedIn profile. Video is not going away. It has become the easy way to communicate online, to gain buy-in and to manage expectations. A recent survey found that 96% of consumers say video assists

them with their buying decisions. Research also supports that customers now expect video on any reputable website, and 77% of consumers believe companies that create videos are more engaged with their customers. If that weren’t enough, 73% of those interviewed said that they are more likely to purchase a product or service after watching a video that explains it. So, what are you doing to build your business with video? Here are five ways you can use video in your marketing plan. Introduce the team Produce short clips – up to a minute maximum – that introduce the people on your team. Build rapport with your customers, and show your viewers who you are and why you do what you do. Share why you love your job and what makes you good at it. Don’t be afraid to include personal information about you – are you married, do you have kids and do you play sport? What hobbies or interests do you have? Let your customers know you are a real person who understands them, as this is a great way to build rapport.

Tips for getting the financing you need What are some of the common issues you have to deal with? Prepare some tips for your customers to help make their financing journey easier. They could include topics such as: • Know how much you can borrow before you make an offer • How to save for a deposit • What you need for a quick approval • The benefits of an offset facility • When interest-only is a good idea • Why the banks don’t want you to refinance

Commentary on issues As movement happens in the industry, provide some video commentary about it. Sometimes nothing has happened – the Fed hasn’t changed interest rates. Then put out a video to explain why they haven’t changed interest rates and what this means from a borrower’s perspective.

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Testimonials Hearing your customers explain how your service enabled them to get their dream home is very powerful. Video testimonials are more energetic and credible than the written word. A video testimonial can give your viewer the reassurance that you understand the individual needs of each customer and can provide the right solution for their situation. A testimonial is different than a case study. A testimonial will usually focus on the quality of the service you provided and less on how it impacted them. Be smart if you embark on the video production route. Plan your videos and book the video production company so that you can create many videos in the one booking. Generally production companies charge for a half-day or a full-day shoot. If you ask your clients to come by to provide testimonials or case studies, then you could easily fill up the day with filming. This will provide you with plenty of content. If you film your customers, then ask them to supply photos of their homes. At the end of the day, this is what you are selling, and by seeing the end result of your work, your prospects will be more emotionally connected to you. If you are presenting to the camera, then consider using a teleprompter. This will enable you to focus on how you deliver the information without the pressure of having to remember the lines. The teleprompter can have the text loaded up for you to read. With a piece of glass that acts as a two-way mirror you can read the text while looking straight down the lens of the camera to the audience beyond. Once you have your content, then be strategic with how you deliver it. Regularity is the key. If you have enough content, then provide a video every month, fortnight or week to your audience. Whatever it is, stick to it. It has been proven that regular content builds and maintains an audience.

“Video allows you to build rapport before you have even met your customer. It allows you to show some personality and build trust in an authentic way” If the property market is on the move, then explain why now is a good time to acquire a new property. Interview success stories If you have customers who are doing great things with their investments, then share the love! Interview them about their strategies. How did they get into the market? When did they decide to make property a key point in their financial goals? What influences their buying decisions? Do they mix negatively geared with positively geared properties?

Case studies You also can include case studies. These might be stories from different customers about how you provided the ideal facility for them – often in spite of themselves. If someone else can sing your praises with a specific story, it is extremely powerful.

The typical case study will follow this format: • What was happening in the customer’s life before you? What was their need? Why did they go looking for you? • What did you do for them? (Asked the right questions, showed options they didn’t know existed, explained solutions they hadn’t considered … ) • How is their life now? How relieved are they? How happy are they? How are they feeling? How excited are they that they have their new home? I’m a bit of a fan of case studies because it is subtle selling with great power. The story should focus on the journey of the customer. It is about them. It just happens that at a critical time in the story, you were there to provide a solution they needed. And then at the end, they are in a much better place because of it. It’s about providing quality content that your audience will find valuable.

Geoff Anderson is owner of Sonic Sight, a corporate video production company. He is also the author of the Amazon Bestseller Shoot Me Now: Making Videos to Boost Business. Visit www.sonicsight.com.au

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FEATURES

MARKETING

5 marketing do’s for 2015

Your old ways of reaching customers may not be working anymore. Kim Goldstone offers 5 ways to get through to today’s client designed pieces of generic handshakes and businessmen sitting around tables, and use graphics that show a younger, more diversified borrower. Show borrowers in a real-life situation to make your piece stand out and evoke more emotion. You have mere seconds to entice someone with a piece of direct mail before it potentially ends up in the trash. Anything that catches your customer’s attention and makes them pause to read your collateral is a success. If you include that interactive element and they actually take it into the house and save it? You’ve won the battle.

WITH A new year upon us, it’s not uncommon to focus on doing things better, more efficiently and with more impact than in prior years. This is true for marketing. Whether you are a marketing director, a branch manager or a loan originator, there are things you can do right now to take your marketing to a higher and more meaningful level.

Know your audience Knowing your audience is rule #1, whether you’re considering a single piece of marketing collateral or an entire campaign. More often than not, marketing dollars are a precious resource that must be spent wisely to

maximize impact and get you a solid return on your investment. Consider your audience in a thoughtful way before going into design and copywriting. Are you targeting millennials? Consider fresh colours and design elements that a younger audience will relate to. Research what their concerns are, and address the questions they may have about the product you are selling. Present your message in a way that will eliminate their concerns and address any potential questions or hesitations. Offer an interactive element, such as a URL, to redirect them to a site where they can find additional information or reach you for one-on-one help. Consider eliminating the cold, corporate-

Engage and educate, don’t sell People are generally tired of being ‘sold.’ Today, consumers want to be engaged, educated and empowered. They seek information and relationships with trusted advisors. Give your customers a reason to want to work with you by positioning yourself as a SME (subject-matter expert) in the home lending arena. Avoid old-school flashy call-out banners and statements of desperation or urgency in your direct mail. Instead, dedicate that space to a statement that will engage your customer or educate them. For example, if you are doing a refinance direct mail piece, get rid of the starburst that screams ‘Call Me Today!’ and replace it with a crisp, sleek box that offers a statistic of how many people you refinanced in 2014 and how much money you saved your clients every month last year. Let the consumer generate the idea in their mind that you are a person who saves

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originator, elevate your personal brand by being an educator, and empower your customer with information and scenarios to consider whenever possible.

Get automated The more customers and prospects in your database, the harder it can be to effectively stay at the top of their lists when it comes time for a refinance or to purchase a new home. Not even the most ambitious loan officer would be able to manage his or her relationships with hand-written notes and cookie-cutter mass marketing. The pros have a secret – and that is to use a CRM that contains fresh, relevant and compliant email and direct mail options for you to send to your clients based on varying factors or triggers. Most CRMs today have dashboards that will tell you which clients you should focus on based on their rate as it compares to today’s rates, clients who you have flagged for follow-up or any other client that you have set up to trigger in certain scenarios. If your goal is to go after any FHA loan you have done in the past four years and attempt to do a FHA Streamline refinance based on the new lower FHA mortgage insurance premiums that became effective January 26, you can do an advanced search of those customers and send them an automated campaign letting them know about this new rate and how to contact you. A good CRM and automated marketing partner will monitor what’s going on in the lending world and will most likely have this campaign already developed for you.

Get social You would be hard-pressed to find a loan originator today who is not at least on LinkedIn or Facebook. However, simply setting up a profile or two does not equate to being engaged in social media, nor does it set you apart from the millions of others who have done the same thing. Real engagement involves spending time exploring and understanding how to use social media as a tool for establishing yourself as a SME. While many loan originators have Twitter accounts, the reality is that most people are not looking for tweets on current rates or saving opportunities. Focus

on social outlets that are appropriate for the business of lending. For example, if you log into LinkedIn and go to your profile, there is an area just under your photograph and basic information that is called ‘Posts.’ If you have nothing there, then you’re not doing enough to establish yourself in the worldwide web of experts. Take whatever angle of focus you can think of and get your thoughts out there, whether it’s ‘Top 10 Reasons You Should Consider a Refinance’ or your own personal ‘Why Work With Me’ mission statement. Be thoughtful and intentional about what you write, and

combination of Facebook advertising (which you can set your price at using cost-perclick), one month of banner advertising on a local news site, sponsor in a local race or community event, and then donate $500 of it to a charity and send out a press release about it. People like people who give back to the communities they live and work in – and to return to the diversification point, this plan reaches people who actually read bulk mail, young parents posting their child’s pictures to Facebook, the group who reads local news online – and you’ve established yourself as someone who cares about the community

Diversification of your marketing portfolio is one of the smartest things you can do for yourself, because while you may have one single message, different people react to and engage with various mediums in diffferent ways then publish it. Once it’s published, share it with your connections. Join some groups that are relevant to the lending industry, or even groups that are relevant to your interests outside the office. You can establish yourself as an expert and get a whole new doorway into prospects by sharing your expertise within groups of people that may know you simply for your love of fly fishing.

Diversify your mediums An investment advisor would tell you not put all of your investment dollars into a single basket, but instead to reduce your risk and maximize your returns by investing in different areas that will react differently to the same event. This is exactly the case in marketing. Diversification of your marketing portfolio is one of the smartest things you can do for yourself, because while you may have one single message, different people react to and engage with various mediums in different ways. For example, rather than spending $30,000 a month on direct mail only, spend half that, and spend the other $15,000 on a

around you. These five tips are merely things you should consider as you evaluate how you spend your marketing dollars in the upcoming year. Each of these topics could be delved into on a much deeper level, but the goal is to get you thinking about what you are putting out there, how it is being perceived, how efficient your marketing is, whether you are truly engaged on social media and what mediums you are using to get your message out to the world. Spending just a little extra time on being thoughtful of your audience, crafting your brand, maximizing your reach and diversifying your marketing efforts can go an incredibly long way and yield you much higher results. Be smarter and more intentional this year and every year after, and you should have no issue remaining fresh and relevant – and watching your success grow to whatever level you ultimately want to achieve.

Kim Goldstone is director of marketing for Mortgage Returns.

www.mortgagebrokernews.ca

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FEATURES

LEADERSHIP

The diplomatic leader: How to agree to disagree There’s a myth that disagreements are to be avoided at all costs. As business consultant Alexandra Tselios explains, if you avoid them entirely, you may never achieve truly effective business outcomes ONE OF THE biggest misconceptions that is detrimental to our society, in my opinion, is that a disagreement has a negative connotation. Too often, I hear people describing a discussion they had at work that was regarded as a disagreement, and they are upset and disillusioned by the event. Quite simply, a healthy team in a company moving forward is going to face disagreements. It is the only way conversations will be effective, outcomes can be achieved, and targets can be met. Beware a leader who avoids conflict, or any sort of disagreement, because the most effective leaders are the ones who are able to agree to disagree diplomatically. Basic leadership communication skills suggest that a productive conversation has the ability to compare perspectives and make a decision. But what happens if a conversation becomes emotional, or worse, an all-out argument? The key is to have the ability to separate yourself and look at the situation from a holistic point of view. How has this conversation derailed? What are all participants trying to achieve? Part of leading effectively is to have the ability to identify strengths in others that you lack, and navigate social nuances. One particular type of person that senior managers often surround themselves with is the ‘Yes Man.’ This person consistently pats their manager on the back, never questions any decisions and generally flees when their CEO faces a huge legal dispute or failure. While these

Yes Men can be fantastic motivators when the chips are down, their inability to provide an alternate opinion is ultimately their downfall. It’s crucial to feel a sense of team unity and have a defined goal, but it’s equally important for a manager to encourage diplomatic disagreements with effective outcomes, something that’s not possible with a Yes Man.

derstood and validated, even if their suggestions aren’t adopted in the resolution.

The art of disagreeing There is a fine art to disagreeing with employees without seeming combative or stubborn, and all too often managers get caught up in the fact that “they know the business better” or

More often than not, disagreements occur because someone can see something that you can’t A business is built on its employees, and every staff member is selected for their specialist skill set and experience. A diplomatic leader is one who considers a variety of different perspectives and analyzes this information when making their final decision. Understanding how the delivery of information can impact those around you is crucial to ensuring that a disagreement doesn’t result in a negative blow to productivity. Who wants to deal with a situation where the guy from accounts refuses to speak to the guy from sales, over a conflict that wasn’t even personal? Sometimes you can’t influence office politics, and people won’t always get along, but how that affects a discussion is up to the diplomatic leader. The crux of disagreeing effectively is ensuring that all participants in a discussion feel as though they have been un-

“they’ve been in the business longer.” With differing opinions there must come detachment. Don’t make it about being right or wrong, but have the overall goal of finding the best outcome for the business. Managers should make quality decisions based on data and facts, and this can only be done if they are able to disagree diplomatically when required. Because every staff member comes with their own filter for how they view and behave in a conflict, a manager needs to have a tight rein on his or her own personal reaction to disagreements. Before engaging in any disagreement, whether it’s between colleagues, companies or competition, it’s essential to leave ego at the door and identify why a disagreement is occurring. Sometimes it’s simply a clash of personalities, but more often than not, it’s because some-

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one can see something you can’t. Consider the fact that this colleague or client may be providing you with the opportunity to gain a fresh perspective that you didn’t have the latitude to scope. This is why a top-tier manager should be able to value the differences of those around them, rather than employ a strict autocratic leadership model.

Negotiate and compromise Negotiation skills and a willingness to compromise are key characteristics of a diplomatic leader, and the best managers are able to negotiate in such a way that they receive the outcome they desire without the other parties realizing that they’ve compromised on their original position. Leadership is about surrounding yourself with a group of advisors, and if you build a reputation of being unmovable, you can quickly find yourself alone. Ultimately, by creating a company culture conducive to discussion and feedback, you are facilitating a change around the myth that disagreements are a negative thing. The right way to disagree with others is only possible after you have listened to all perspectives while considering the impact on whatever decision is finally made. Whether you agree or not isn’t the point; the point is what resolution is best for the company, the team and the clients. Until you respect the opinions of others, they are unlikely to respect yours, but once a culture of discussion and appreciation is fostered, it will be far easier to make a decision that will be adhered to by even your strongest opponents. This is why it’s important to have a healthy balance of personality types on your team who are capable of both encouraging and challenging. I have often heard the meekest of voices challenge me in a meeting, but once they realize it is absolutely welcomed, they gain confidence, and a discussion can truly start to form. This is not the time to assert your leadership position or flaunt your dominance; this is the time to show your employees that you value their strengths and want them to contribute fully. One of the strongest qualities of a good leader

THE 6 STYLES OF LEADERSHIP • DIRECTIVE A coercive style that demands compliance and can contaminate everyone’s mood and drive talent away. To be used sparingly – in a crisis or to kick-start an urgent turnaround • VISIONARY Inspires and is able to explain how and why people’s efforts contribute to the ‘vision.’ Moves people toward shared outcomes through empathy and clarity • AFFILIATIVE Creates harmony that boosts morale and solves conflict, a useful style for healing rifts in a team or for motivating during stressful times • PARTICIPATIVE Superb listener, team worker, collaborator and influencer. Values people’s input and gets commitment through participation • PACE-SETTING Strong drive to achieve through their own efforts; has high personal standards and initiative. Can be impatient and prone to micromanaging and leading only through example • COACHING Listens and helps people identify their own strengths and weaknesses. Encourages, delegates and improves performance by building their people’s long-term capabilities Source: Hays Group

There is a fine art to disagreeing with employees without seeming combative or stubborn, and all too often managers get caught up in the fact that “they know the business better” is their ability to say no to something without this causing tension or a loss of employee morale. Use each disagreement as an opportunity for greater understanding. If a staff member offers a suggestion that isn’t in line with company procedure or standards, take the time and brainstorm together the reasons it won’t work, and what an alternative could be, instead of belittling or disregarding the individual. The core of a diplomatic leader comes down to respecting and valuing the strengths in those around them. This has nothing to do with personality differences or clashes, and everything to do with the ability to listen, respond and validate. If it is second nature to avoid conflict, you

simply need to get over it because, quite frankly, conflict can be a productive and important part of analyzing data and reaching decisions. Diplomatic leaders have to be comfortable that they are responsible for decisions that drive the company to success, as well as for the decisions that don’t work as well as planned; they need to be at ease with their own leadership abilities, and clear on the gaps that require personal investment. Alexandra Tselios is a business consultant and publisher of The Big Smoke. She has a diverse background in corporate, public and creative fields and is an expert business consultant.

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PEOPLE

CAREER PATH

POSITIVE ENFORCEMENT In an industry where the bottom line is often the only meaningful metric, only a handful of brokers can tout eight-figure origination numbers. Calum Ross is one of them Ross’s father was a busy ship’s captain, but his mother was a pervasive presence in his life, leaving an indelible impact on his character and values. “My mother is probably one of the most highintegrity people I’ve ever met in my life. I try to live my life in a way that she would be proud of.”

In the financial sector, one key benchmark is the dollar figure of your largest deal. In Ross’s case, it was an $8.9 million private loan for a $45 million residential property. “I’ve had everything from really marginal clients who became superstars to clients who were already established and growing.”

Ross’s ‘aha’ moment came early in his career, when he was a part-time MBA student working at BMO. “[My professor] said, ‘Most businesses don’t do anything new; they just take an existing product or service and do it better.’ Even though I was moving toward an investment type of career, I made the leap to mortgages. I knew I could do it differently.”

PICKS UP CORE VALUES

2011

FIGURES OUT THE INDUSTRY

1995

2014

HITS A PERSONAL ROADBLOCK

2009

1999

2015

CONTINUES TO TAKE RISKS

COMMITS TO PERSONAL DEVELOPMENT

FUNDS HIS LARGEST DEAL

HAS AN ‘AHA’ MOMENT

1970s

Starting out, Ross had little training. The reality of how far behind he was hit home when he received his first deal. “I literally didn’t know how to read a credit bureau. I had to call Equifax and have them explain it to me. To say I was clueless is a gross understatement.”

Some of life’s milestones can substantially affect a career. Ross’s divorce was one of those. “After the divorce, I felt I could lose my most precious asset, my relationship with my daughters. In the years following the divorce, I’ve made it a really big priority to be there for my daughters and the things that matter most.”

Ross had always been adamant about personal development, and this has intensified as he progressed in his career; he’s spent up to $70,000 in professional coaching services. “What these types of relationships give me more than anything else is that constant positive peer pressure. If you improve the quality of the company you keep, you improve the quality of your life.”

A risk-taker in business, Ross extends this approach to his personal life as well. He has done everything from skydiving and bungee jumping to sports car racing. “You cannot expect to grow without stretching yourself. I don’t think I’ll ever arrive at a point where I can say, ‘I’ve arrived.’ In my mind, it’s more about, ‘How do I push the boundaries further?’”

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PEOPLE

FAVOURITE THINGS

JANET MCKEOUGH Senior mortgage consultant, Success Mortgages, and president, Mortgage Brokers Association of Atlantic Canada Barack, basketball and books that inspire – these are a few of Janet McKeough’s favourite things

Favorurite food I have a lot of things that I like, but I think I’ll go with squash curry soup.

Favorurite place to relax: There’s a place in Halifax called Fleming Park, or the Dingle. It’s at the mouth of the harbour, and it overlooks the Atlantic Ocean. It’s a really nice place to relax and watch the sailboats. Favourite celebrity I’d probably have to go with Barack Obama. I think he’s an allaround good guy; he’s intelligent and operates on the best intentions.

Favourite book I read a lot of bio graphies and self-help books. I like the kind of reading that you learn something from, something that you can take with you. I read a really good bio about Michael J. Fox recently.

Favourite vacation spot I don’t really travel much, but if I had to pick one, I’d probably go with Jamaica. I loved it when I was there in 2011. The weather was beautiful, and the food was really great. I loved the people there; they were really kind. I had a good time soaking up the culture. Favourite thing about working in the mortgage industry: Doing the right thing for people who need it. I used to work in a bank, where it was all about their bottom line and not necessarily about helping people with their needs. There are more options to do the right thing for clients in the mortgage industry.

Favourite drink Tea – orange pekoe, green and black tea. I pick up a lot of blends from David’s Tea.

Favourite mortgage product: I’d have to go with the variable-rate mortgage. It offers a great rate and great flexibility. There are also low payout penalties if required, which is a good thing for client.

Favourite music I like Serena Ryder – she’s a Canadian girl. “Weak in the Knees” really turned me on to her but she has a new hit called “Stompa” that I really like.

Favourite movie Men of Honour with Cuba Gooding Jr. was a really good movie. Based on a true story, it was about having positive attitude and overcoming obstacles.

Favourite sport I love basketball. I couldn’t really play, but I love to watch it. St. Francis Xavier University was my alma mater – even though they’re in a different city, I go to a game occasionally.

48 www.mortgagebrokernews.ca

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