Broker or Banker?

Mortgage seekers wonder: broker or bank?


This article was published in the Globe and Mail on April 23rd, 2017.


The writer alludes to the idea that the disadvantage of dealing with a mortgage broker for your mortgage transaction would be that a mortgage broker isn’t able to provide the full service financial advice that you’d receive at a bank.


To properly balance a portfolio, you need to consider your mortgages and loans, your registered investments, your non-registered investments, your insurance needs and possibly any rental properties.  The people you’re working with need to be able to listen to your long and short-term goals, a need to provide you the education you need to make great decisions.


Here are the straight goods: for your average consumer (and DEFINITELY for your first time home buyer), that ain’t happenin’ at the bank. 


More than anything, it saddens me that First Time Home Buyers are so misadvised.  I wanted to write a response to this article to set a few things straight.


Consider this:  If you are sick, you go to the doctor.  You don’t go to your friend from university that did 3 biology classes, 4 math classes a French language course and basket weaving.  You go to your Doctor.  Why?  Because all he does, all day long, is diagnose illness and check for overall physical health.  Now, that doctor, should he feel you need more specific information, will refer you to a specialist in his network of trusted colleagues.


The article above is inviting consumers to consider that if we want to have the best overall financial experience, that we need to go to a bank.  Because a banker, (ooh la la), he knows it all.


What?  (I’d add that “eye roll” emoji if I could)


A banker might know all about the 15 products he offers, but he would be fired if he referred a client to an institution that better fits their over all needs (or even just their needs for that piece of the portfolio).  I worked at a bank before starting as a broker and I can assure you, in many meetings, we were instructed that we “were not permitted to refer outside the bank.”


So you know what?  All this talk about bankers being the “one stop shop” for financial success?


I’m callin’ BS.


As a mortgage broker all I do, all day long, is read through client files.  I read about debt, savings, income, RRSP’s, RESP’s, tax free savings, exempt market funds…you get the drift here.  I talk to clients about their goals, I speak to their accountants directly, I ask them “if your income were to be reduced or eliminated – what’s your plan,” and much, much more.


Every mortgage broker I know has a huge network of specialists that help he or she provide the best client experience.  After a discovery session with a client, if they want to spend some more in-depth time on their overall financial fitness,  I’ll refer them to one of my financial planning contacts.  Why do I need several contacts?  Because they all have different products and investment strategies that fit different client’s needs like age, risk tolerance and portfolio size.


I don’t refer because I have “targets” I need to meet.  I don’t put my clients phone number on file and pepper them with calls offering credit cards and insurance and I surely don’t just SEND them preapproved credit offerings in the mail.  It’s a win for me when my clients either reduce debt or use extra funds obtained through a mortgage to invest and grow their net worth.  I am not “winning” when my clients are paying more interest.  I am only winning if my clients are wildly, happy with the transaction, properly positioned to be able to move on or move up down the road and referring me to their friends and family.  That is the ONLY way I make money.  I am not compensated for referrals to colleagues.  I am only compensated when the client needs a mortgage.  Because of this, I can ONLY have their best interests at heart.


My list of experienced and licensed, (did I mention most bankers aren’t licensed), professionals includes:

  • Financial Planners
  • Insurance specialists
  • Licenced Trades and general contractors
  • Experienced Realtors
  • Reputable Moving companies
  • Homes stagers and interior designers
  • Certified Real Estate investment Advisors
  • Experienced Bankers – because you know what? The bank can play an important role for some clients, and I know when to refer.


I think I’ve made my point (sheesh – I didn’t like that article – did I?)


Check out my other blog posts that talk about payout penalties and advantages of using a mortgage broker if you want to dig deeper!