FICOM publishes open letter

FICOM publishes open letter

FICOM publishes open letter The B.C. regulator has released an open letter to the industry, outlining its plans for future compensation disclosure while also inviting further broker comment prior to implementation.

The letter, which was sent to MortgageBrokerNews.ca by a FICOM representative, explains its proposed plan to require brokers to disclose, in dollar terms, commission and volume bonuses earned on deals, as well as other rewards the broker may earn from the lender.

It also explains the reasoning behind the additional disclosure requirements.

“A declaration that the broker is paid by a lender does not go far enough in describing, in a meaningful way, the interests that the broker and related parties receive from the transaction,” FICOM writes in the letter. “It masks the nature of those interests and keeps them hidden from the consumer.”

FICOM explains that the changes are a pre-emptive measure.

“FICOM's primary job is to anticipate risks and take action before they can become problems for the public and the economic well-being of the province,” FICOM writes. “We take that assignment seriously.”

FICOM says it has not yet scheduled an implementation date.

FICOM has also invited industry stakeholders to contact it directly at brokerconsultation@ficombc.ca to share their input by February 20.

To read the letter in its entirety, click here.
 
14 Comments
  • Tony Piattelli 2016-01-06 3:38:55 PM
    What I still don't understand is that they claim the following: "“FICOM's primary job is to anticipate risks and take action before they can become problems for the public and the economic well-being of the province,” FICOM writes. “We take that assignment seriously.”", yet fail to identify the risks that they are anticipating that will affect the well being of the province? If these risks are so significant, then why aren't they disclosing them? Sounds like a lot of administrative blarney to me. Sure sounds nice, but I'm quite sure that if broker's didn't disclose full compensation per FICOM, that the province of BC will still doing fine. Are we to speculate what the volume bonus is as this may vary depending on volume?
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  • Mary Blackmore 2016-01-06 3:45:51 PM
    This is discrimination on brokers. Does other salesman and women such as financial advisor and car salesman and women disclose. We explain we are paid by commission and that should be disclosure enough.
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  • Leslie 2016-01-06 4:28:53 PM
    Why are mortgage brokers so afraid to tell the consumer how much they make? What is the big secret? My stock broker discloses his commission to me, as does my independent financial planner.

    What sounds fishy to me is that brokers are fighting this so much. There is only one reason to do it... because you have something to hide.
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