“We would never sacrifice our efforts to win the hearts and minds of our customers just to end up being average, from a market share perspective.  Volumes alone does not create business depth.“

Plenty of ‘how-to’ books have been written on building a sound business.  Plenty more will be written in the future given the old economy is being replaced by the new economy, the digital revolution.  A common principal, profitability, is obviously critical to any organizations success.  If profit is the key principal in building an organizations culture, that organization will not create any depth.  Furthermore, customers will see through it and they may come to the conclusion that your business is not authentic.  The mindset of the consumer is different today.  Consumers today want to do business with companies they view as being authentic; customers do not want to be simply viewed as means to an end.

The challenge for every business today is to make the enterprise economically relevant, while at the same time focusing on the visceral aspects of the customer experience.  If you can build a business where customers want to do business with you because they of the belief they come first, you’re building a business with depth.  With that in mind everyone at MERIX Financial is extremely proud of the fact that we were voted the number one lender in the most recent CMP Broker on Lender Survey. Eight medals in total, four of which were gold, speaks to our authenticity.  MERIX Financial wears its heart on its sleeve.  The underlying principal of MERIX Financial is to create future wealth for its customers, the mortgage broker.  We passionately believe in the trailer fee model because of the benefit it brings to our customers.  Some may dismiss the value of our model but I don’t think anyone can question our commitment and sincere belief in the trailer fee model; that is what resonates with our supporters.  What is also appreciated is our candor and honesty.  If it’s our bad we admit it and try to fix it.  We received a silver medal approval/turnaround time, a gold medal in underwriter support, a gold medal in overall service levels.   In a utopian world it would always be like this but we do business in the real world.  We had to face our shortcomings, listen to feedback from our customers and dedicate ourselves to improvement.  Our partners at Paradigm Quest have done a remarkable job to support our efforts and our customers made note of our improvements and acknowledged our efforts by making us number one.

For those who know me (and have actually spoken to me) know that if asked a question, I will provide an honest answer; as I believe the worst thing you can do is insult your customers intelligence by being disingenuous.  Diplomacy counts but honesty denotes authenticity.  So if you’re wondering if I would trade all eight medals for another $2 billion in funding?  The answer is no.  Why should volumes and authenticity be mutually exclusive?  If we could magically fund another $2 billion our goal would not change – being rated the number one lender.  The reality is that another $2 billion in funding would put us in the middle of the pack.  We would never sacrifice our efforts to win the hearts and minds of our customers just to end up being average from a market share perspective.  Volumes alone does not create business depth.

To all of our supporters who took the time to acknowledge  our efforts by casting a vote for MERIX,  thank you so very much.  There may be a time in the future when we may not meet your expectations.  That’s the human nature of business but as we’ve demonstrated since inception we will not rest until we fix whatever problem may exist.  We may not always get it right but that will never stop us from trying.

 Until next time,

 Cheers.

“Knowledge is critical but its value is limited unless you’re prepared and committed to execution”

Irrespective of what you do professionally, being self-aware and enhancing your personal development is critical to growth and success. The day you put your personal development on hold is the day you decide to the let the competition pass you by. And it’s that fear of lagging behind the competition which motivates me to seek out knowledge and explore new possibilities… every once in a while some morsel of information actually sticks.

Attending the World Business Forum is almost an overload of information. And as someone who has listened to many speakers I have to say this event brings together some of the best thinkers and accomplished speakers to one program.

People like:

• Jim Collins, author of Good to Great and a host of other books. His work is based on empirical data so there’s steak to go along with the sizzle.
• Marcus Buckingham, who specializes in identifying employee’s strength and ways to harness that strength to maximize performance
• Don Tapscott, author of Wikinomics; his specialty is identifying how technology affects marketing and innovation
• Robert Gates, former Secretary of Defense. During his illustrious career he’s served at the pleasure of eight Presidents. He knows a thing or two about leadership and courage. He gave us some insight into the planning of the Bin Laden mission in Pakistan, and the courage it took for President Obama to give the go order.
• Fareed Zakaria, host of CNN’s foreign affairs and guest writer for the Washington Post and Time magazine. Zakaria spoke to the global power shift and the geopolitical challenges we all we face.
• Jack Welch, Richard Branson and a host of others. As I said, it was almost information overload but not in any negative way.

Many things to ponder about what I just learned over the last two days but I’ve been able to confirm two things. Firstly, being inspired is an important component of personal development. Secondly, knowledge is critical but its value is limited unless you’re prepared and committed to execution. How many times have you heard someone say about some service or product, “I thought of that a while ago”. Frankly, the honest response to that statement should be, “shame you did nothing about it”.

Until next time

Cheers

Financial literacy? It’s a part of your life until death.

I came across an interesting story in Forbes online magazine, entitled, How to Raise Financially Savvy Kids. The writer, Jenna Goudreau, touches on a topic most parents have difficulty with, raising financially responsible children. Ms. Gourdreau gets into detail as to why it’s difficult to raise financially responsible children and I encourage you to read the entire story (see below).  The story resonated with me, as it forced thoughts of what we were doing in our home relative to financial literacy for our ten-year-old. The answer – not much. It’s not that we don’t believe it’s important but like most parents I think we fell into the trap of “the child will somehow learn about financial responsibility through osmoses”. Yet if our ten-year-old came home and said, “I really don’t feel like my math lessons, don’t worry, all the kids around me are doing it so I’ll pick this stuff up by just hanging around them”. Our reaction would be, LMAO! And then we would march his ass into his room to do his math.

I never understood why schools don’t make financial literacy a part of the curriculum. I’m not suggesting it’s as important as other subjects but it is damn important. For children who master calculus, that’s fantastic. But depending on their educational aspirations or career path the calculus learning may be forgotten.  Financial literacy? It’s a part of your life until death.

I was thinking about my own experiences growing up, and the lessons I learned from my parents about money. The lessons were not based on discussions but rather behaviour. By the time I was fifteen years old I had a full time summer job. There were no summers off or as my dad categorized it, “bumming around”. From the age of 15 to when school was over I was on a construction site hauling drywall for the entire summer. I remember not liking the job too much but I sure liked the money. I would save all my money and put it in the bank so I wouldn’t have to ask anyone for money if I really wanted to buy something during the winter. It gave me freedom, independence and deep rooted respect for those who did manual labour for a living. Others lessons that I learned was simply by watching my parents. My mom worked three shifts in a factory to help support the family. My dad worked long hours to provide for his family. I guess after watching them do this day in and day out I never had the nerve to ask for an allowance. I can’t imagine saying to my dad, “you want me to take the garbage out? Sure, give me five bucks”. If I ever did the first thing I would have to do is duck.

For most people financial lessons are learned through experience and the lessons can be costly. I believe some of the pain and expense can be avoided if our schools dedicated a set number of hours a week to financial responsibility and literacy. If you’re a parent give some thought to your child’s financial literacy and perhaps bring it up at the next parent teacher night. It’s time to start thinking about why the school system might be failing your child in the area of financial literacy.

Until next time,

Cheers.

Article: How to Raise Financially Stable Kids

“My goal since day one was to create a company whose employees would be recognized as being the best in the industry.”

In some ways I find it difficult to believe that we’ve hit the six month mark already.  Yet, on the other hand it feels like a year’s worth activities have taken place in the first six months of 2012.  As an industry we have had to deal with the constant media attacks.  Personally, as CAAMP Chair, regulatory issues and media distortions have been at the forefront for me day in and day out.  Just when you think there might be a reprieve, or at the very least seventy two hours of tranquility, BAM!  Something happens.  It’s been that kind of year.

A sure sign for me that the first six months of the year is now visible in my review mirror is the mid-year Merix Sales Conference.  We just completed our seventh annual conference, and if truth be told I think I get as much out of the conference that our employees do.  I was a tad concerned that fatigue might get in the way of providing the right level of energy for our employees.  Since mid-May I’ve traveled to Australia, Poland and now San Francisco for the Merix Sales Conference.  All wonderful experiences but getting there (wherever there might be) and back is a little draining.   So, I inhaled a little extra high octane coffee and got on with it, and after the first day no artificial stimulants were required to manufacture energy levels.  The Merix employees provided that for me with their level of engagement and appreciation during the sales conference. I always marvel at how prepared our employees are when they come to the conference.  All pre-work is completed and there are no wallflowers.  They want to learn, they want to improve their skill sets and they want to enjoy the experience.  A big thank you to Genworth for participating, and for the educational content they provided.

My goal since day one was to create a company whose employees would be recognized as being the best in the industry.  Setting aside my rose coloured glasses for a moment, bar none the Merix sales team and support staff is a cut above.  I take great pride in their results but even greater pride in the way they conduct themselves professionally.  They will never do anything to embarrass the company. They treat their customers, be it borrowers or brokers, with professional courtesy and respect.  A way for an organization to ingrain that principal is simple; you treat your employees that way.  If you treat your employees with respect, dignity and courtesy, the odds are good they will do the same for their customers.  The purpose of our sales conference is to educate, refocus and get prepared for the second half of the year, and to remember a moment in time.  For the team it was remembering the sessions during the day, the excursion to Alcatraz, taking in the Giants versus Dodgers ball game, visiting wineries in Sonoma, and officially ending the conference with a team dinner in the most exquisite surroundings.  After dinner I walked out of the cave, dinner was actually served in a man-made cave at the winery, to enjoy a cigar.  I stood there by myself and took great pleasure at the sound of laughter coming from the cave.  These people truly like each other, and they all want each other to succeed.  From where I sit that’s an organizational badge of honour.  

On behalf of all of us at Merix, enjoy the summer.

Until next time

Cheers

By the time this blog is posted, I’ll be somewhere over the Pacific Ocean heading towards Sydney, Australia.   My final destination is Adelaide, Australia.  The purpose of the journey is to attend the Mortgage & Finance Association of Australia National Conference.  It’s a long, a very long way, to go to attend a conference.  By the time you read this blog, I will be well into my 22 hour flight and, I suspect, I will be going a little stir crazy.  I’ve traveled a number of times to Europe, but an 8 hour flight to Europe is like a walk around the block compared to “going down under.”  It’s a trip I always wanted to make, but I always found a reason to put it off.  Must be the thought of been cramped in a tin can for 22 hours.  But now, there was definitive time and reason to go.  The MFAA is Australia’s equivalent of CAAMP.  As much as I’m delighted to remove an item from my bucket list, going to Australia, the primary purpose of the visit is to represent CAAMP, and to go for my own personal development.

Canada and Australia are similar in many ways; specifically as it relates to the mortgage industry, an oligopoly exists in both countries, but the big difference is the disappearance of mono-lines in Australia.  That was a result of the credit crisis of 2008, or as the Aussie’s like to say, the GSS (Global Shit Storm).  The mortgage industry in Australia changed significantly post-2008.  As mentioned, mono-lines became a footnote in the annals of the mortgage lending history in Australia.  Given limited competition, broker commissions where significantly reduced.  The four major banks in Australia now control 90% of the broker market share.  The banks imposed proficiency exams on brokers to do business with them, at a cost of $750 to write the exam.  The major banks took an equity position in some of the larger broker house’s in Australia, and they exercise their influence and control by way of board seats.  Yet, for all the challenges the Australian broker market has faced since the GSS, they still control a 40% market share.  That’s what I find fascinating.  The Canadian broker market came out relatively unscathed after 2008, and yet broker market share in Canada is not growing.  The data would suggest that broker market share in Canada is actually contracting; so what is it about Australian broker market  that enables them not only maintain their market share but actually grow it?  That’s going to be the first question I ask of any stakeholder in Australia.  I hope to garner some insights and to see if there’s some practical application to our market, given examples from Australia.

What I’m really looking forward to is talking to lenders and brokers who fully embrace a trailer fee model.  Brokers and lenders in Australia are vested and fully committed to this model.  So what I hope to gleam is, how did they get there?  I believe the trailer fee model is now accepted by the broker community in Canada.  It’s no longer viewed as the boogieman or the great unknown.  In large part this is due to Merix’s commitment towards this compensation model, and it pioneering of the trailer fee model.  Many lenders talked about in the past but Merix actually did it.  I commend all the broker lenders in Canada that have created a hybrid of the Merix model.   Lenders in Canada can call them renewal fees if they like but the fact is prior to Merix, lenders were not paying on renewal.  My hope is that every lender jumps on board and helps to create future value for mortgage brokers in Canada.  Who knows, maybe one day Aussie brokers and lenders will ask us, how did you do it?

Until next time

Cheers

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