November 21, 2019

Ex-banker tells all

by Justin da Rosa

An ex-banker turned fee-only financial advisor dishes on what it was like to hock mortgages to clients and the pressures to cross-sell.

“When I was in the bank I received incentives to sell (its products), that’s how my performance was evaluated,” Sandi Martin of Spring Personal Finance said on Canadian Mortgage Hangout TV. “Even though I really wanted to serve the person across the desk from me as best I could and give them the best, unbiased advice… a little voice was telling me ‘but you’re going to have to tell your manager that you couldn’t sell them another Visa card or whatever.’”Really, the goal of an in-house mortgage specialist at a big bank, argued Martin, is to ensure the client is sold as many products as possible, essentially  a strategy that often forces advise to take a back seat to selling.

“The more depth you have in your client profile, the more money you can make off of them,” Martin said. “Once you have a mortgage and a transactional account, if you can add one more thing – like some kind of investment – the branch feels like it’s really got its client in position.”

This may come as no surprise to mortgage brokers and other independent advisor who started at the banks. Many now touted their ability to provide unbiased advice as a major selling point; but one thing they may not have considered, suggested Martin, is the role of each individual branch in driving cross-sells.

“(Mortgages) are very profitable for the branch… the real competition for mortgage brokers is the person in the branch office down the road; that person is really concerned with how many mortgages, new money to the branch a mortgage can bring them,” Martin said. “(They) want to be identified as the primary bank – so that includes having a checking account, having a savings account, having your RRSPs, having your mortgage, having your line of credit, your unsecured car loan.”

And perhaps most interestingly, Martin revealed exactly how she tried to pry business away from mortgage brokers.

“When I was in banking, if someone would come into the branch – I’ll just kind of give you my spiel, what I used to say to clients, as a responsible bank employee who really wanted their mortgage dollars,” Martin said, recalling her script. “‘Mr. Client, I understand that they can give you 25 basis points and that’s fantastic; I would love to do that for you. But what your 25 basis points is going to buy you here and the bank is: I’m here all the time.

Mortgage Brokers will follow you and your mortgage throughout your “mortgage life” .  Brokers will look out for your best interest and if you want them to will advise you of things that could be of significant change for you, after the mortgage funds.

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