Case Study: Calum Ross, Canada's 2.5 Billion Dollar Man
We recently sat down with Toronto-based mortgage expert, and Principal Broker and Wealth Advisor of The Mortgage Management Group (TMMG), Calum Ross, to discover how his passion for the mortgage industry and wealth management are helping to improve the financial wellbeing of his clients.
Ross is an Amazon and Globe & Mail best-selling personal finance author as well as a national leader and speaker in the field of financial planning and borrowing to invest. His expertise is showing households how to use current income and assets to achieve long term financial goals while applying a conservative wealth management model.
Ross is regularly featured in media as a financial expert including appearances on Global, CTV, CNBC and BNN, and has contributed to The Globe & Mail, The National Post and The Toronto Star. His expertise has been recognized in the legal and financial community where he has been retained to present expert reports for legal proceedings relating to mortgage litigation and financial advisor professional standard of care matters. Ross is often consulted by pension funds, government policy makers and federal mortgage insurers about matters relating to the mortgage, real estate and financial markets.
Our interview with Ross provides helpful insight for any mortgage professional seeking to find value from an automated mortgage operation.
How did you first hear about Floify?
I first heard about Floify when I visited a very big mortgage producer in Texas and they talked about the idea of having this great software that was effectively making their loan process a lot faster. Of course, being based in Canada, I wasn’t sure that it actually applied, but one of the things that I am is a bit of a closet technology and financial dork, so went back and found out that in fact Floify was not only compliant, but far ahead of the compliance, and so I implemented it then, which I think was probably about three years ago.
How would you describe the change Floify has made for your business?
The level of client satisfaction and efficiency would be difficult for me to put into proper terms. What I can tell you is, in the last couple of years, I originated $165 million in mortgages on average, and was essentially able to do it without touching documentation. I mean, I didn’t even log into my Floify account. I went in and I designed it and customized it to my brand. After that, I haven’t event touched the account, so I’m not sure you can get a better testimonial than that. Not only do I think it was great, I set it up and don’t think I’ve really interacted with you guys since. I literally don’t touch documentation in the process and even go as far as to say my team won’t let me touch documentation in the process. I don’t know that it gets better than that.
Before transitioning to Floify, what was the most frustrating or challenging aspect of the loan process for you?
In the loan process people should realize there’s only two foundational things. There are two things we know consumers always need. First of all, they want us to save them time. And the other thing is they want us to save them is money. Now, in my case, I work primarily with high-income, high net-worth individuals, so the time and efficiency pieces are very big for me. And from my standpoint, when I’m looking at the frustration points in the mortgage process, certainly consumers find the documentation process overwhelming. I mean, let’s not kid ourselves, even as loan originators or loan officers or mortgage professionals, whatever you want to call us, the mortgage process and the documentation process are by far the most stressful things for most consumers as well as most mortgage originators.
What about Floify make you and your team more productive?
For me, if a solution like Floify existed when I first entered the mortgage business, it would have taken away my need to have an assistant in the early days. Floify to me is a full-time, 24-hour, seven-day-a-week system that never makes an error, always follows up, gets documents accurate every single time. Floify is sort of what we’re all dreaming of as an assistant. For me that’s given me the opportunity to put something down in a client palatable template. So, I’ve customized Floify to sort of take things to the next level. I mean you guys didn’t even have a Canadian solution at the time – I rewrote the stuff for that.
And Floify enables me to make sure the clients get consistent communication about documentation. It gives them solutions in terms of how to receive communication more efficiently. I mean Todd Duncan talked about this. The idea is when you solve a problem, you solve it once and then you enhance the solution. So, the idea for me is that Floify has given me the opportunity to take the stuff out of my brain, and all the years of experience, having funded 6,500 mortgages, so I can take my best practices and put them in a succinct format and make sure my team gets the knowledge transfer and my clients get the most hassle-free documentation management process available.
What is the average time savings for each loan you and your team process since using Floify?
I would say this depends on the complexity of the loan and whether you’re a mortgage bank or mortgage broker. For me, Floify gives me the ability to work with lending partners typically doing a lot of high net-worth solutions. So, I work with a number of the private banking groups and it enables me to get the condition file removed right away. Now if I were to look at structuring one of those loans, considering the fact that we do a lot of leveraged wealth, in the very low end, Floify would save me four hours, and at a high-end sometimes 6 to 12 hours.
The second thing I would like to point out is I come from a big corporate management background and a business school background, so I look at full-time equivalents, right? If you figure that you need to do 10 loans. you would have anywhere between 40 hours to 80 hours of fulfillment and loan processing elements. I certainly would never get away from the customer service component of my team, but you’re talking about saving, conservatively, for every 10 loans, you are, without question, cutting out a full-time body equivalent. One full-time employee is essentially alleviated. And not to replace the full-time employee because the point of this is high-tech, high-touch, and we know that’s where consumer trends are going, so we want to make sure that we use the technology to enhance the customer service experience. And that means when I’m on the phone with clients, I can talk more comprehensive wealth strategies, high net-worth programs, or my team members can talk about more time with the real value-add stuff, which is making sure the clients don’t feel stressed out. And what is a very stressful experience? It’s borrowing money.
How much time would you say you save each week on average by not asking your borrowers for documentation?
What’s interesting is we actually used to think our standard Tuesday update calls were a huge value and now the vast majority of our clients are like, “I don’t need you to provide an update, your portal gives it to me.” So, we actually don’t call the portal Floify, we let clients know that we have a very customized secure borrower portal to make this mortgage process less painful for them. It’s got our branding and all the rest of it, and it also means for myself, even though I have the capital to be able to invest in that type of infrastructure, the critical mass your team has in the way you talk through the customer service process. It would take me 5 to 10 years to go through it and by then you guys would already be further ahead. So why any bank, or any other lender or wealth management firm, wouldn’t use a process like this, given the fact we know the documentation process is basically the most stressful part of the process. It just makes no sense to me. It makes me believe they just don’t understand business or the customer.
What kinds of staffing changes have you experienced since using Floify to help run your mortgage processes?
We’ve done exactly what I want Floify to do. I always think if I’m actually communicating something that can be found on a portal, such as the idea of how to structure mortgage loans or tell someone they’re approved, we have to be mindful of the fact that we live in a digital age. Almost every single online lending site can tell someone they’re approved. There are also people who are desperately competing for rates. In fact, the US and Canada are very competitive learning environments, so if your value-add is getting the lowest rate, then your business model is not very sustainable in the long run.
I would say now more than ever, given the fact that lending guidelines and credit is getting much tighter in Canada and the US, we have to be uber purposeful about making sure we’re on the phone being very mindful and letting people know about the changes in capital markets, what’s going on with the US Federal Reserve or the Bank of Canada, and talking about the idea of the future of the financial markets. That’s the stuff they need to hear from an individual. So, I wouldn’t say Floify is changing my staffing, but what it has done is enhance my customer service experience and I’ve got my team members doing the things they should be doing, which is serving clients and adding value to their financial well-being.
Has your business seen an increase in profitability since transitioning to Floify? If so, how much of an increase (in percentage terms)?
At the time, my intention was not to grow. My intention was to enhance the customer service experience. I will be going into a growth phase; however, I’m waiting until probably the early part of next year, but before I went into Floify I was averaging more than $100 million of production and I’ve done $2.5 billion. Of course, that’s only $2 billion American dollars, so hopefully it’s still acceptable [laughs]. Nonetheless, I want to point out to you guys that I’ve gone up 65-percent or more in one year. I mean, you don’t require an advanced business degree from a fancy school to realize that’s pretty astounding, especially when everyone else was going down.
Since transitioning to Floify and reducing direct contact with borrowers via phone and email, has their level of satisfaction with your services changed? If so, in what way?
We do client satisfaction surveys, however; to me, the ultimate measure of actual client satisfaction not a survey, it’s do you come back to me, and do you refer your friends and family? Because in the absence of doing that, people will get on the phone right away and tell you they’re satisfied, so when you have more than 70% of your business coming from repeat clients, and they’re primarily high-net-worth, high income borrowers, yes, our client satisfaction has gone up. And the irony is its sort of like the client card experience within the banking world, where people didn’t want to use it for getting people to sign in with their travel documents and people found it very painful. Now it weirds people out of they don’t do it that way. So, when I point out that we might have a little bit of a resistance with borrowers, but if you’re looking for repeat clients, if you think about it from an end-user experience, not only am I able to take them through the process at the beginning and get them up on it, but I tell them their future borrowing needs are really easy with me. All I do is reactivate their documentation and they get their own secure borrower portal again. And in fact, it’s a great value-add because my clients know I’ve got their documents in order. So, a lot of times they’ll reach back out to me because they know I’ve got their documentation in order and I’ve got the opportunity to talk about how organized we are, how proficient we are, and how much we would love the opportunity to serve them again.
If we think about the actual globalization of technology in conjunction with the financial service industry, what we have to be mindful of is the fact that everyone is time pressed. I don’t know about you, and obviously there are various parts of Canada and the US that are less time-pressed, but I’m in Toronto and Toronto has a very similar corporate culture to Chicago or New York, so I don’t know anyone who doesn’t seem time pressed. You know, if there’s a lineup at Starbucks, that causes people stress here. And so even when you look at that, to me, when I look at the idea of Starbucks, I mean, if I’m going to Starbucks I use the app on my phone, they have my Starbucks order ready and waiting for me, and I just pick it up. I still say hi to the people there because they interact with me and I’m sociable, but I think to myself, wow, that timesavings was worth more than the entire cost of my Starbucks coffee.
And so, people have to be mindful. You’ve got to be uber-uber focused on making things incredibly easy for your consumers. Borrowing is stressful enough. The last thing they need to do is worry about whether or not you’re organized with documents. Whether you receive the email or whether in fact, you’ve had a chance to review it. The fact that people have not caught on that this is just a better more profitable way to do business that enhances customer service experiences is just unfathomable to me.
From a lender's perspective, what do you think is the most valuable aspect of Floify?
For me, this is one of those things where it’s the ultimate protection of my reputation because there’s absolutely no chance I’m actually ever going to pass off a fake document. We’ve got digital confirmation that I never received it or it was received in the portal. I’ve got digital confirmation that I reviewed it electronically. There’s actually this amazing user interface that preserves document integrity in a world where we’ve got all kinds of document fabrication that becomes very critical. So, the borrowers just love that fact because they hear horror stories about the mortgage lending process and mortgage people potentially modifying documents. There’s a general distrust or lack of comfort with a lot of people using these documents and then sharing them with financial advisors. I tell people all the time, that financial records are considered in the same type of manner as medical records. People view them as uber private. And so, when you’re asking a client to send a document in for the second time to your email or your processing has lost it, along the way you are compromising your trust. And along the way you’re also chancing the fact that a document could be compromised. So, borrowers just love the fact that they actually know there’s no way a document’s integrity is brought into question.
That’s one of these things that people got to get real with, because whether you are a very professional, polished, high-end originator or someone who’s just starting out, I will point out to you the idea that people know to secure a portal, it’s no different than if you look at a private health care experience where you’re going in, you know the documents, they are never given to you in print anymore. Everything is electronic, so the fact that people are not more mindful, not only to the end user experience from a trust component, but also the very real future where paper documents are probably going to disappear.
So, yeah, clients love it.
In your opinion, why do you think technology, including mortgage point-of-sale solutions, is so important for the future of the mortgage industry?
There are two foundational rules of business, which are always make it profitable and always make it enjoyable for people to do business with you. And so that lender experience, when they know documents haven’t been modified, the client experience, and then of course the fact it’s more cohesive. We all have to be focused on the fact that margins for lenders have gone down dramatically, and so for us to make sure that lenders look at us as financial intermediaries, as a profitable source of business, we’ve got to make it more efficient for us to do business with them. And so, when we look at the actual trend towards fintech and other things, it would be unrealistic for us to think as third-party independents or intermediaries, whatever you want to call them, for us to believe that they want to spend a lot of money paying us for mortgage loans or financial assets, which is one of our related companies, because they can go consumer-directed a lot cheaper. So, when we actually look at the future digital market, I think we should also be really mindful of the fact that we are in partnership with our lenders. We don’t want them to lose money. We want them to have margin and at the same time for us to be adding margin or making money, we have to be focused on making money for clients. And so, I think enhancing the actual digital side of it allows us to spend more time. So, I’m not studying document processes anymore. Instead, I’m reading more financial books. I mean, just look on my desk behind me or on my bookshelf. The fact I can spend that time getting better at my financial knowledge is a very big deal because when you look at a situation like the US, which is clearly going into recession soon, and Canada, which is a little closer if you looked at the credit cycle and things like that. We have to be mindful that in recessionary times, lenders are going to be looking at alternative distribution.
And while the actual high paid commissioned sales people, some of them will be eliminated the most profitable people who make it enjoyable for those lenders to do business together ensures our long-term viability as mortgage originators or financial advisors.
What advice would you give loan officers who are on the fence about using a point-of-sale solution like Floify?
My advice would be simple. Accept and embrace digital or become obsolete.
That’s all there is.
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