Former bank road rep shares controversial practices

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Another banking veteran, now a broker, is criticizing the increasingly close relationship between Realtors and some of the big six banks, suggesting it comes at a disadvantage to clients.

A former top-producer at one of Canada’s largest banks and current Toronto-based mortgage broker spoke with on condition of anonymity and revealed a number of controversial practices that were rampant when he was a road rep.

“The bank pays realtors 50bps to send deals to road reps but in 99 per cent of cases the Realtors are not disclosing this to their clients and in over 80 per cent of deals the rates and products are far worse than that in the broker channel,” the broker told “Also all mortgages are collateral charges and the road reps do not disclose this in the mortgage commitments.” recently ran a story revealing a number of bank rep secrets, one being that many who transition to the broker channel eventually return to the banks.

“Many road reps who go over to the broker channel often come back to the bank,” the bank source said, “and it’s not because they can’t make it without a big bank name behind them. No, it’s because the deals that come to them as brokers aren’t generally of the quality that we see in the bank… the prestige isn’t there.”

It’s a claim the anonymous broker refutes, believing many who have made the transition to the broker side stay due to the objective nature of the job, which allows brokers to provide unbiased advice and product recommendations, as opposed to being tied to one institution’s products and services.

According to the broker, his former bank employer required 70 per cent insurance penetration, as well as incentives for tied selling.

“They would allow lower rates if you sold the client insurance and or a bank account,” he said.
  • Chris Murphy on 2015-04-02 12:37:59 PM

    Glad to see this brought out in the open although this is common knowledge. Where is CAAMP and the Provincial regulatory bodies on this? No disclosure to the realtor's client is unethical. Realtors are supposed to give out three names at times but it's the first one they lead to the customer. If I helped the realtor go to conferences or sent them a big screen TV, I would have to disclose to the client but the realtor doesn't. Clients are getting treated badly with this practice.

  • Ron Butler on 2015-04-02 2:06:04 PM

    Couple of points, CAAMP has absolutely nothing to do with bank reps, we really need to stop wasting our typing on that issue and Realtors ABSOLUTELY need to disclose any form of income or any form of compensation they receive that is tangential to every transaction. I am not saying that they do every time but it's a fact they have to. We need to keep the facts straight. Bank reps are Federal Law nothing to do with FSCO or CAAMP and realtors have just a tough or tougher disclosure as mortgage brokers.

  • Chris Murphy on 2015-04-02 3:40:59 PM

    I knew that but we should expect CAAMP to ensure a level and ethical playing field. They are working the Federal Finance Minister as well as provincial regulatory bodies. If the realtors disclosure is as tough, we aren't they filling in they get points or BBQ's or TVs. The referral points are significant enough to disclose.

  • Broker on 2015-04-02 7:13:42 PM

    Interesting how this guy now has a problem with road rep practices yet he was good with it when he had the opportunity to do such. What a complete Hippocrates.

  • Chris Murphy on 2015-04-02 7:38:29 PM

    Been an independent broker 13 years. Check your facts before you make accusations. Check your spelling too.

  • Tammy on 2015-04-03 6:20:31 PM

    Far worse products and rates? No. All mortgages are collateral? No again. Realtors MUST disclose any incentive to their client and they will not receive any incentive until a form is signed by home buyer indicating they are aware of any incentive. Brokers and bank reps both get paid for selling mortgage protection insurance, so whats your point? Percentage penetration is a guideline. An ethical broker OR bank specialist will not sell their client insurance they don't need. Offering a discount to the interest rate is NOT tied to insurance or bank accounts. Who did you interview for this article?? Poorly written, misinformed and highly inflammatory.

  • Mortgage Delivery Guy on 2015-04-04 5:56:30 PM

    Notice how once again Collateral mortgages is under spot light.

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