Canadian Underwriter

Feeling more like a career counsellor than a broker these days? That’s not a bad thing.

December 14, 2020   by Adam Malik

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Based on estimates of 160,000 Canadian small businesses at risk of closing due to the COVID-19 pandemic — or even as many as 225,000 closures, per the Canadian Federation of Independent Business — brokers have a part to play in helping clients both save and reshape their companies, a senior broker leader says.

Helping teetering companies revive their businesses can cement the broker’s value as a trusted advisor, says Karim Chandani, Vancouver-based Hub International vice president of hospitality.

“I’ve got to be on the same level playing field as your lawyer and accountant, where you need to trust me and what I’m doing to help your business,” Chandani told Canadian Underwriter in a recent interview. “Because, at the end of the day, I’m going to look after their best interests. That’s what all brokers need to do. That’s what I think is our role is at this time.”

Key to this role is asking clients if they are in the right kind of business to survive the economic impact of the global pandemic. Chandani uses the example of a pizza store. Say there are seven in the area. He’ll ask his client how many of those seven will survive the crisis and actually be profitable. If the answer is three or four, that creates an opportunity for a broker and a client to discuss realistically what should happen next.

“The [businesses] that worry me the most — and with whom I have these frank discussions — are the smaller hotels,” he said. “The reason I say that is, [banks] are not going to foreclose on the very large 200-, 300-, 500-room hotels. There’s too much at stake and too much money tied up. [But] with some of these smaller hotels and motels, banks could [foreclose] and get their money because they could sell off the property.”

Smaller hotel owners might consider entering into government programs to convert their hotel into, say, a retirement home, a low-income housing complex, or a centre for the homeless — things that governments are looking for, Chandani said. That could turn their fortunes around.

“You’re actually selling that property to the government,” he explained. “We’re starting to see more and more of that. So I have these frank discussions with clients to say, ‘Have you thought of other opportunities because you cannot survive this downturn?’”

For Chandani, the COVID-19 pandemic has created the opportunity for him to get to know his clients’ businesses better and be someone his clients can truly call a trusted advisor. “I have felt their pain, they have shared their pain, and we have developed such trust,” he said. “The opportunity is to stay in touch with your client, advise your client, and be honest with them.”

That honesty means giving clients all the information you have. It means ensuring the information is what they need to hear. “You shouldn’t be sugarcoating anything,” Chandani said. “You need to give them the reality of what we’re seeing for the next few years. You’re not just telling them, ‘Oh, your rate’s going up this year. Hopefully next year we’re going to bring it down.’ There’s no such thing as, ‘Next year it’s coming down.’”

Instead, brokers are talking about how to keep the inevitable increase from being too high, he said. “That’s the conversation. This is the time to be there to support all of our clients in any sector. All us brokers who do that are going to come out on the positive end and are good to have long-term client relationships.”


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