More Money... Less Service?

A lot of people ask me one specific question about Haystax when I speak with them, so I thought I would share!

1) Why Haystax?

When I started in financial services 3 decades ago the world was a very different place. Businesses still put a large emphasis on profitability, but there was more balance between the needs of their people and profits.

In the past 30 years we have witnessed the consistent degradation of how employees are compensated, and what benefits they receive. In the mortgage broker space the same has been true.

In the 1990's most businesses in financial services invested heavily in training and employee development. As the demand for ever growing profits grew the first to be cut were those very same training and support programs.

In the mortgage broker space we have seen some improved development of training, but it is largely being provided by member associations or private, for profit, educational businesses. On the surface there is nothing inherently wrong with that, look deeper however and there is an obvious issue.

Had these businesses re-directed the savings into other programs to help their people grow within the organization, we would not be seeing the reduction of average tenure within a business. Someone who is well treated, paid well, and is provided with the necessary support and training is far more likely to stay with a business that supports them.

In the 1990's I worked for AVCO Financial and was treated to some of the best training I have ever experienced. Training that was so robust it took me from a 19 year old novice to being one of the most successful in the organization. I consistently broke through my targets every month for the 7 years I was with the organization.

If it was so good why did I leave you ask? Well, because AVCO was sold to another company who immediately shelved all of the training and support programs. The dramatic shift from a place of learning, support, and growth became a profit first organization. That company, Associates, no longer exists after less than a decade in Canada. AVCO was a player in Canada for nearly 70 years.

So what does all this have to do with Haystax you must be wondering.

When I took a long hard look at what was on offer in the industry I noticed one key trend that seemed to be common place with all other brands. Training and support are secondary to profits as the link between the two seems to be missing. Immediate profits are trumping long term sustainability as evidenced by the growing "churn rate" of agents who are seeking more (depending on the source the statistics range from a churn rate of 20 to 40% - that means that between 20 to 40% of mortgage agents leave the industry every year, with roughly the same joining).

With the increased average home values skyrocketing across the country, businesses and professionals in the Real Estate and Mortgage industry have all made more commission per transaction. In fact, the average compensation on a mortgage (or home sale) has resulted in a much higher "raise" when compared to inflation. I am 100% OK with that, it is the nature of being self employed in a 100% commission business.

The production rate for mortgage agents in Canada (as an average) is pretty dismal at less than 1 mortgage funded per month. Yes, there are those that fund significantly more, but the averages are clear. The average compensation for a mortgage agent in Canada is LESS than $50,000.00 per year - much less than the minimum living wage in almost every city in the nation.

It also means that broker market share has sat stagnant at around 25% for the past decade.

The single biggest changes that I noted was the devolution of training into a system of pre-recorded webinars and paid training. Neither offer a tangible solution to professionals who are looking at growth and sustainability. Training, support, and mentoring must be consistently delivered in accordance with adult educational standards. That means courses that are 100% self directed online, facilitated regular training, and continuous updating of both.

Above I noted that sales professionals in our industry are making more due to higher home values and average mortgage amounts. That also means that the brands are making that same growth in profitability, yet service does not appear to be increasing in kind. Instead we are seeing more and more courses that require the agents to pay to learn.

I believe that if any brand wants to be valued and sustainable we need to invest in those people who are boots on the ground. That means consistent support and training, and that is why I built Haystax.

Our support program is based on providing consistency and predictable training timing. There are 52 weeks in the year, and each of those presents an opportunity to give agents the timely, tangible, training and support that they crave.

Here's how we do it:

Every week from Monday to Thursday, for the full 52 week year (with some exceptions for holidays of course) Haystax provides live online training that covers a myriad of subjects. Sales Training and Mentoring, Compliance and Audit, Business Planning, Marketing and Growth, Case Study reviews, Brokerage Administration, and more.

All of this training is offered FREE of charge to ALL Haystax members.

When you also consider that Haystax is a flat fee model that allows brokerages to keep 100% of all revenue and reduce their "brand" costs by as much as 80%, it begs the question... how is Haystax sustainable?

Simple. We allocate a significant portion of our corporate revenue exclusively to training and support. Our role is to work with our franchisees to grow their business and provide meaningful support where it really counts.

It is also why we are the only company that has launched a Franchise Advisory Council (FAC) who has direct say over the direction of our brand. That includes marketing, events, technology and more.

So Why Haystax?

It is simply because I believe that we, as an industry, have lost our way. The focus on dollars over the professionals that drive our industry must stop. The single greatest strength this industry has is our licensed mortgage professionals through the support and advice they offer Canadians. I believe the time to refocus on these amazing individuals is long over-due.

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This article represents my own views on this topic and are not designed to incentivize someone under contract to breach that agreement. This is intended for informational purposes only.