CRM2 and concerns about the loss of embedded commissions should see a number of players head over into mortgage brokering – following the lead of other financial advisors succeeding in that space.
“I don’t think financial advisors really understand the income possibilities of being a mortgage broker,” Jim Thornton, a mortgage broker with Real Mortgage Associates and former financial advisor told WP. “The transition for these advisors would be fairly easy if they have any sort of client base.”
According to Thornton, many advisors making the transition will be able to bring clients with them if there is no overlap in products offered and, thus, their former brokerage will put up less of a fuss.
The one issue those defectors are likely to face in leaving the industry, Thornton said, is the challenge of developing a strong Realtor referral base.
The incentive to make that leap is growing for some advisors. On top of real concerns that the OSC will eventually move to limit the use of embedded commissions, advisors are also fearful CRM2 disclosure requirements will lead to a significant loss of clients post-full implementation next year.
Some advisors are now anticipating the cull of advisors to be as high as 25 per cent.