Well, not really. I think I would rather watch eight hours of Degrassi reruns in a row than go fishing. My family, friends and acquaintances who enjoy fishing are rolling their eyes right now and thinking: “this coming from a guy who spends hour after hour trying to get a little white ball to fall into a ridiculously small hole. And all the while offering profanity-laced commentary.” To that I say, whatever! My aversion to fishing is that it’s too exhausting. You’ve got to cast the line, open a beer and take a seat. Whew! I’m fatigued just thinking about it.
All kidding aside, I’m off for a family vacation for the next couple of weeks and I actually might go deep sea fishing. We’ll see. Therefore, blog posts may come sporadically or not at all over the next couple of weeks. It will all depend on whether something funny as hell happens while we’re on vacation. Which usually happens in our family.
I thought a fitting way to end the week was to comment on a recent phenomenon happening here in Ontario. Not sure if it’s making its way to other parts of the country but I hope it does. It’s about random acts of kindness and by all accounts, it appears to have started in Ottawa. For some reason it all centers around coffee. Last week a man walks into a Tim Horton’s coffee shop in Toronto and asks the cashier how much would it cost to buy 500 medium cups of coffee. The response was $825. He pulls out his wallet, plunks down $825 and says “I’m buying the next 500 cups of coffee.” He then walks out of the coffee shop without giving his name and he didn’t bother to wait for the people standing in line behind him to say thank you.
More of these stories are coming to light and I think it’s so cool. Not many can afford to drop $825 worth of coffee on total strangers but one cup of coffee every now and then? I think so. But what is really cool is how these random acts of kindness generate stories. The recipients of the free coffee will tell at least one person about what happened to them that day. How many of us can say that we did something so selfless and kind that at least 1000 people are talking about it? So I tried it this morning, on a very small scale. Every street in downtown Toronto is being dug up, resulting in brutal traffic congestion. I work at the corner of Bay and Richmond and a portion of Richmond is closed due to road work. There are two police officers monitoring the intersection and as I walked by them today I said, “gent’s, I’m just on my way to Tim’s, can I get you a coffee?” The police officers were most gracious but declined. And I walked away feeling a little better because I made the gesture and I also know that I just created 4 new stories about simple kindness.
Until next time,
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I can’t even to begin to express my gratitude and thanks to all those who welcomed me in Australia. From Phil Naylor, CEO MFAA, Steve Kane, National President MFAA, the MFAA Board, and all the staff, thank you for your gracious hospitality. The MFAA put on a fantastic conference, and it gave me the opportunity to gain some insight into the Australian market, and to meet some wonderful people.
People like Bridget Sakr, Chief Commercial Officer Genworth Fininacial. Bridget invited me to attend a couple of round table discussions with some Genworth’s supporters. It was an interesting exercise and validated that all Genworth employees share the same characteristics. Customer relations, Best in Class. People like John Flavell, General Manager Distribution, NAB (National Australian Bank) Broker. John invited me to attend the NAB broker appreciation dinner. This dinner was for some of the biggest supporters of NAB. It gave me a great opportunity to ask questions of the best of the best. Great food, great wine, a captive study group for me, can’t ask for much more. People like Annie Lim, who I sat beside at the conference gala dinner. Annie is the Director of the Mortgage and Finance Association of Singapore! A fledgling association but it was a great reminder to me look constantly beyond our own backyard to learn a thing or two.
To all my new mates in Australia, I would like to extend an invitation to you to join us in Vancouver for Mortgage Forum 2012. Our national conference is from November 25-27. No worries, it doesn’t conflict with the Melbourne Cup. I can assure it would be a great experience, an opportunity to network, and maybe learn the odd thing from us Canucks.
Until next time
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The one significant difference between the Australian and Canadian broker market is broker market share. CMHC just reported that in Canada, broker market share is 27%. In Australia, it’s 42%.
Attending the MFAA Conference has accorded me the opportunity to garner insight into the Australian broker market. The stakeholders in Australia are as passionate and committed to their industry as we are in Canada. I am struck by the market similarities we share, as it relates to the overall economy, and the broker market specifically. One similarity we share is negative press. The issues are different but the press in Australia is as committed to fear mongering as it is in Canada. There’s no talk of too much consumer debt here, yet their average mortgage balances are no different than in Canada. Here the primary focus is all that could go wrong beyond Australia’s boarder, which in turn will lead to the destruction of the Australian economy.
Europe’s an issue; however, the press in Australia is casting its worrisome gaze in China’s direction, which on the surface is laughable. China is Australia’s largest trading partner. The Aussies distanced themselves from the U.S. market years ago. They decided to hook their wagon to an emerging market like China, and fortuitously decided to distance themselves from the world’s largest sub-merging economy, the US. Ah, but gory headlines are needed, so the focus is on China’s slowing economy. It appears that 7 1/2% growth is no reason to celebrate or feel comfortable. The talk is will China have a soft or hard landing, which ultimately will impact the Australian economy. Can you imagine, if the US was forecasting 7 1/2% growth, and what that would mean for the Canadian economy? Yet somehow 7 1/2 % growth in China could have a negative impact in Australia. Just wondering what part of 71/2 % growth produces a hard landing? I guess the old saying about the press is no different in Australia – “if it bleeds…it leads”.
The one significant difference between the Australian and Canadian broker market is broker market share. CMHC just reported that in Canada, broker market share is 27%. In Australia, it’s 42%. I’ve asked every Aussie I’ve spoken to at the conference the following: “how did brokers grow their market share to 42%”? As I suspected, there was no one definitive answer, but there were some underlying themes.
It appears that the psyche of the average Aussie plays a part in those market share numbers. Aussies have a deep distrust of the banks and animosity towards their profits. Many Aussies believe the higher cost of borrowing has contributed to those bank profits. Yet, banks in Australia have a 90% market share of all broker business. So that distrust and anger has not resulted in less business for the banks. In large part that is due to the lack of competition, but it appears also that consumers look to brokers to provide them with the best of the least tasteful option. Interesting, to say the least.
Another critical factor which contributes to the success of the broker channel is the investment that the large firms make towords advertising. I had the pleasure to speak to Michael Russell, CEO of Mortgage Choice in Australia, about this very subject. Without getting into specifics, Mortgage Choice invests multiple millions of dollars in advertising. Their individual franchises advertise on their own, which collectively exceeds the dollar amount committed to advertising by Mo rtgage Choice corporately. Throw in Aussie Hone Loans, and number of other firms which advertise, and it’s easy to see why an Aussie consumers would chose a mortgage broker. Some of the larger broker firms in Australia spend more on advertising than the banks do, as it relates to mortgages. The messaging is choice, service, quality of broker, trust and yes, pricing. Since the GFC (Global Financial Crisis), Aussies are far more focused on price. However, price alone is not enough. The Aussie borrower is looking for utility and competency.
There’s plenty to learn from the Australian broker experience. Volumes speak, like $90 billion a year in origination. I’m looking at a rate sheet from Westpac, one of the major banks in Australia, and their 5 year fixed rate is 6.99%, and the good news is their ARM pricing has been reduced to 7.09%. You may be surprised to learn that 60% of all mortgages in Australia is ARM. The most recent MFAA Home Finance Index, which measures consumer sentiment, indicates that the percentage of consumers who would chose a broker first, as compared to those who would chose a bank first, is almost identical. We share many similarities with the Aussie broker market, yet some of the differences are profound.
Until next time
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For God’s sake they should get a couple of thousand tugboats, some good strong rope, and tow this island somewhere closer to civilization.
In the name of all things holy it’s far. For God’s sake they should get a couple of thousand tugboats, some good strong rope, and tow this island somewhere closer to civilization. For transparency I was fortunate to be able to sit at front of the bus for the flight over. That gave me the opportunity to stretch out and get some sleep, some seven hours’ worth. It was the other fifteen hours that I had to fill, and what I learned is that to pass that amount of time away you need a distraction. Like food! The flight attendants try to feed you at every moment. “Mr. Bozic, is there anything I can get you?” Let me see, it’s been 22 minutes since my last meal, “sure, how about some dim sum and 4 bags of chips”. I’m not kidding.
The real estate market is red hot here – This according to the cab driver who drove me to my hotel. Property values are increasing by 10% annually, and he owns multiple properties. Hmm, interesting. I was afraid to ask him if he was a part-time mortgage broker. Let me rephrase that, I was afraid of the answer. I have this illusion that the Australian mortgage broker industry wouldn’t allow that.
As soon as I unpacked at the hotel in Melbourne, I went for a walkabout. I went out and picked up two newspapers, which I planned to read from front to back, so that I can get a flavour of what’s current and happening in Australia. On the front page of The Australian and The Daily Telegraph was this number one story: the original Wiggles are no more. Yes, Australia’s jewel and gift to children’s programing is going through a radical makeover. Three original members are leaving for personal reasons; the usual, wanting to be closer to family etc. Yeah right, one day the truth will come out and we’ll all learn that there’s a Yoko Ono story in there somewhere. One of the replacements is, are you sitting down, a Wigglette. Only 22 years of age, Emma Watkins is the new face and the first female member of the Wiggles. If you’re wondering she will dawn the yellow shirt.
Australian stock market has tanked. It’s lost all of its gains in 2012. The European debt crisis dominates the business section but the major banks here feel they’re insulated because they have been preparing for the inevitable for some time now. Australia biggest trading partner is China. As goes the Chinese economy so goes Australia’s.
The best five year fixed rate I could find is 6.5%. Gulp!
Melbourne is a lot like Vancouver, from architecture to the overall feel. Melbourne hates all things Sydney; just like Vancouver and Toronto.
The learning continues. The bastards drive on the wrong side of the road. I was nearly killed twice jaywalking.
Revolving doors at the hotel turn in the opposite direction. Smacked my head a few times – D’OH!
Clearly I speak funny. I was in Melbourne for less than twelve hours and two people asked me the following: “so you here on vacation, mate?”
The most important thing I’ve learned so far is that there’s no awkwardness in meeting family for the first time. It was odd talking to my cousin on the phone, making plans to meet at the hotel and having to describe what I was wearing so he could pick me out of the crowd. He found me, and I got a chance to spend some time with him, his beautiful daughter, his brother and his mom, my aunt. They were extremely gracious and they treated me like family. It doesn’t matter what happens from here – that will be my lasting memory of this trip.
Until next time
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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
Another March break is upon us and in our household that means it’s Florida time. Canadians migrate to Florida this time of year with the same enthusiasm as a fat kid attacking a bag of Smarties. Got to get it all in, now!
Family vacations in Florida can be a whirlwind, especially for families that make the pilgrimage for one week. It’s not easy fitting in Bush Gardens, Universal Studios, Cape Canaveral, Lego Land and the number one attraction in Florida, Disney World, all in one week. Ah Disney World, where dreams come to life, and spankings become a reality because the kids have been rotten &#$@’s for the entire day. I’m just kidding, everyone knows that spanking is yesterday’s discipline. (more…)Read More Add a Comment
The family cruise to Alaska is coming to an end. As I write this blog we’re in Canadian territory, off the coast of B.C., on our way to San Fransisco, to head back to Toronto. Now that’s taking the long way home. Spending 12 days on ship is an experience, and it does take some adjusting. The biggest adjustment is being way from work for a prolonged period of time. It’s been close to four years since I’ve been away for more than five working days in a row. I’ve taken plenty of short vacations over the years but they’re usually four or five days in succession. The reason is simple, I can always come up with a reason why “now is not a good time to be away work”. Too busy or it’s too slow. There’s always a justification. If you’re guilty of the same thing here’s what I’ve learned, we’re not that important. I checked emails every morning, responded when I thought it was necessary but I made the decision that my family and this trip came first. MERIX wasn’t neglected in my absence because there’s a great senior leadership team in place, and they’re more than capable of taking care of the day-to-day tasks. If the business consumes you that you can’t take a couple of weeks off, frankly, that doesn’t bode well for your business or yourself. Coming to this realization is an ongoing process, and I’m still working on it.
It’s interesting as a vacation draws to an end the work switch seems to get turned on. With every passing hour “work” issues enter your thoughts and I suspect it’s the minds way of preparing ourselves for what’s next. What’s next for me professionally? There’s been a number of changes at MERIX recently, and I’m really excited about the direction our company is taking. I’ll elaborate further about some of the changes in future blogs. I’m also looking forward to take on the challenges of being CAAMP Chair, effective this November. The next 16 months are going to be very busy, and I can’t wait to get started.
A a final thought relative to my trip to Alaska? Russia sold Alaska to the US in 1867. The land and all if its natural wonders sold for $7.2 million. That worked out to 19 cents an acre. As some of my Jewish friends want to say…”such a deal”.
Until next time.
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The excellent adventure continues and I’ve come to learn a lot of things about taking a cruise. Firstly, don’t ever call it a boat. The crew doesn’t like it, and given that they would be responsible to haul my sorry ass out of the water if I went overboard, no need to make them upset. It’s called a ship. So ship it is. I also learned that all cruise liners are not equal. This is my first cruise so I’m basing this on what some of my fellow passengers have told to me. It appears the magic number is around 900 passengers. I’ve been told the really big cruise liners, the one’s which hold 3,500 people, are nice but given the amount of passengers on board it impacts service levels. I’m told there are wait lines for everything. From waiting to eat to going to the bathroom. No such issues exist on the ship we’re on. We’re on a Crystal Cruise Liner, and they have a reputation for not overcrowding and superlative service. I’ve come to learn that’s a fact. I’ll get to the service in a moment.
I also learned that many passengers are frequent cruisers. Example, I met a man by the name of Barry last night in the cigar lounge. Yes, the ship has a cigar lounge…high backed leather chairs….mahogany wood…cognac…and a giant flat screen TV with Fox News on all the time. It’s paradise! I digress, Barry and I got to chatting, the usual small talk, what do you do for a livening, first time on a cruise etc? This is Barry’s 10th cruise, and he’s already booked his cruise for next year, the Atlantic crossing. Barry has time on his hands, he’s retired, as most of the passengers are. I think the median age on board is 73. It’s been a long time since anyone has referred to me as young man. Barry did, and I like Barry. He’s a big bear of man, a retired family law lawyer from Virginia. His specialty was divorce. He said to me in his Virginia accent, “young man, when I was practicing law my matto was…I’ll guarantee I’ll win your case or you’ll get your spouse back”. Let me tell you, laughing so hard that you’re coughing up cognac through your nose is damn painful.
As for the service on board, it’s almost over the top. After a couple of days on board I wanted to yell, “enough already…trust me…if I need something I’ll snap my fingers”. Just kidding! I would never snap my fingers…I’d whistle. Truly the service is exceptional, and it’s consistent throughout the ship. I’ve spoken to crew members from Croatia, Poland, Check Republic, Australia, South Korea, US and Canada. They’re all so happy and willing to please. Being an employer I asked many of them why they excelled at customer service. Every one of them said the same thing, “the company is good to us, we’re good to the company, and we always put the passengers first”. Truly inspiring when you consider that crew members are on contract anywhere between 4 to 6 months. They work each and every day of their contract. No time off, that comes at the end of the contract, usually two months off. I can’t imagine working for six months straight, with no days off, away from family. Many of the crew members indicated that it’s difficult being away from their kids for such a prolonged period of time but they do what’s necessary to provide for their families.
Damn, if we could convince these people to become brokers and lenders we would all be golden. They’re committed…they have passion…and they’re willing to sacrifice.
The most important thing I learned about being on a cruise is…food. It’s everywhere and it’s available 24/7. Something happens to you when you’re on a cruise. You’re on the ocean…you see an iceberg…and you say to yourself…”wow, that’s a big iceberg…I think I’ll have a hamburger”.
Unlit next time
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Well not exactly. I will be on the water for the next 12 days, and if I’m lucky I might be able to see a really big fish, like a whale. Yeah, I know, a whale is a mammal. It’s family vacation time and we’re off on a Alaskan cruise. Alaska’s a place that I’ve often thought about visiting but I really didn’t think I would actually ever go. It’s like when you say to someone “we should do lunch”, and both parties know full well that it won’t happen. The food would be nice, maybe even the company, but neither party is going to make the effort to make it happen. Well, the effort was made to go on this trip, and here’s what I’ve learned so far about going to Alaska.
To get to Alaska costs an unbridled fortune. The word fortune is relative, and I’m sure this trip will provide a lifetime of memories. Based on the cost I better have memories in the next life as well. In fairness, value is perceived. Example, if I was to get a call tomorrow inviting me to play golf at Augusta National, home of the Masters, I’m not sure how much I would pay but it would definitely fall in the stupid category. So, it’s never about cost. I now realize It costs big money to see big ice.
Packing for a trip like this is interesting. “Let’s see, I packed shorts, golf shirts, winter coat and boots…all set”. Recommended clothing for Alaska is layers. Okay then, I’ll be walking around Anchorage looking like the Michelin Man. Styling in Alaska. I’m going to ask everyone I talk too in Anchorage if they know Sarah Palin …. Why? It’s payback. It’s for all the times that an American has asked me, when they find out I’m from Canada, “I know guy from Canada…his name’s Bob…do you know him?”
As I write this blog we’re just about to passed under the Golden Gate Bridge to begin our journey. What a site. I’m really looking forward to all the sites on this trip, and continuing to blog. The wonders of technology…
Until next time,