Is it time to regulate road reps?

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Should bank road reps come under industry regulation?

This is the question some brokers are asking as the heated debate on road reps appropriating the mortgage broker title continues to a simmer.

“I think this is the perfect time to look into having road reps licensed and regulated,” said Brian Lambert, broker with Real Mortgage Associates in Barrie, Ont. “Regardless of what name they end up using, this will help ensure that a governing body is overseeing their conduct and the service they provide.”

Like many mortgage professionals, Lambert argues that brokers go through strict education, training and licensing procedures before being allowed to practice. He believes banks should move to have their road reps and mortgage specialists undergo the same rigours to protect clients.

That would ensure the education that road reps get is standardized, he said, “and that the public is assured a governing body is keeping tabs on integrity and quality of service.

Banks encountered a similar quandary with bank employees representing themselves as financial advisers and giving clients investment advice even when they did not have any license or accreditation, recalled Lambert, a former insurance and investment adviser.

“Because of numerous problems and complaints from the public, the banks eventually required these advisers to be accredited,” said Lambert. “I am hoping we will see the day when bank employees giving mortgage advice are fully licensed just like brokers.”

  • Mike Havery on 2012-09-28 4:43:55 AM

    all Road reps and branch reps who do mortgages should be licensed. The provincial regulators should see to it, otherwise the reputation of our industry will suffer.

  • Christopher on 2012-09-28 4:55:39 AM

    I surprised they aren't. I know some banks require it, but I guess not all.

  • Christina on 2012-09-28 5:29:08 AM

    I think it should be required of all who are providing mortgage services- why should the Bank reps be any different?

  • The Banker on 2012-09-28 5:41:14 AM

    Good luck with that!
    They are not paid for selling mortgages, they are paid as bank employees.

  • really?? on 2012-09-28 6:58:47 AM

    If mortgage agents took the time it takes to read these articles, get all worked up, and post their whiny comments, and put that time into taking a course, getting out of the office and networking with referral sources or contacting their past clients for a mortgage review, they'd be too busy to even worry about bank reps. Or strike up a conversation with a bank mortgage rep who needs someone to refer their declines to and make them pinky-swear to not call themselves a broker.

  • Paolo Di Petta | on 2012-09-28 9:33:53 AM

    They absolutely should be regulated! And it's not about being whiny - it's about accountability.

    We have our license on the line with every deal - there's checks and balances, and a duty of care we must provide to our client. A road rep's only responsibility is to their institution. They're selling a limited range of product and essentially, just act as application pushers.

    Imagine the outcry if this were the medical world - where some people could dispense and prescribe prescription drugs without a doctor/pharmacist's license. How can people even trust them? Licensing brings accountability.

  • Island Advisor on 2012-09-28 2:35:52 PM

    I can't speak for the rest of Canada but in BC Mortgage Broker licensing is a JOKE... A course that has no real product or loan structuring content! I am currently a mobile bank rep and can tell you all the in house lending training i have been provided vastly surpases the contect of this licensing exam you hold so highly! I have held multiple broker licences(Insurance, securities, Mutual funds). These courses are merely show that you have enough common sense to pass a test and ensure that if you pass the test you clearly know what fraud is, so you can be held accountable if you break the law.

    I do understand that the entry level bank staff who are employed straight out of university who do not know a mortgage from a credit card should be regulated on who can give advice... but your exam and licensing is not sufficient. For the deals i refer to local brokers i have to teach them regularily about things like how revolving credit affects the Credit bureau, how to read financial statements (cause a tendency locally was to shove all self employed borrowers into stated income deals even when not needed), etc.

    Think about a green broker who has just passed his or her exam they do not have what it takes to provide complex mortgage and financing advice any more than a green banker in an office...

    Better regulations for all and maybe we can weed out more of the many poor mortgage Agents/Brokers out there!!

  • Mortgage guy on 2012-09-29 3:44:57 AM

    Brokers are regulated provincially. Banks by OSFI. I think we are kidding ourselves if we think that having a broker licence means "our industry" is well-regulated. Bank employees go through more compliance, KYC, fraud, and regulatory training in a year than brokers do in a career. That doesn't mean they can do as good a job on advice as a seasoned broker. But let's not overstate how well-regulated the broker industry is....because it's not true.

  • Ron Miller on 2012-09-29 3:52:24 AM

    Island Advisor,"For the deals i refer to local brokers i have to teach them regularily about things like how revolving credit affects the Credit bureau, how to read financial statements". Find a different broker or agent to refer your deals to. Seriously.

  • anonymous on 2012-09-29 4:43:25 AM

    Lenders are all heavily regulated and are regularly audited. There is no need to have individual road reps further regulated, that makes no sense whatsoever.

    The reason why brokers have to be licensed is because they have no other training otherwise.

  • both sides now on 2012-09-29 6:17:36 AM

    Have to agree with Island Advisor, mortgage guy and anonymous. Having been on both sides as a bank rep and a mortgage agent, far more time, resources and money are spent training the bank employees than a new agent. I've completed the licensing course, it's a joke that people are unleashed as 'agents' just because they've passed it.

  • Ex-Broker on 2012-09-29 7:49:27 AM

    As someone who has worked as a branch employee, a mortgage specialist and a mortgage broker, I would tend to agree with some of the comments posted around the training, or lack thereof for mortgage brokers. Yes, you write an exam that shows you have the ability to memorize some information but that gives you little practical experience or training on what to do afterwards.

    Many broker firms will be more than happy to sign you up as a newly 'licensed broker' and take a cut of your income however they fail to provide any training either. As a bank employee, we regularly attend training sessions put on by our institutions as well as participate in coaching sessions, conference calls, and complete online training.

    In addition, all of our files go through regular audit and we are held to a higher standard than brokers. One of my biggest beefs with being a broker is that I dealt with all my files in an ethical manner and nothing bothered me more than turning a client down only to find they had gone to another broker who fudged the numbers to get an approval.

    The mortgage broker licensing course is not the do all end all in being a mortgage professional...and neither is being an AMP...though this lends a bit more credibility. I am not sure what the answer is but I don't think brokers should be giving mortgage reps a hard time...many of them are better trained than you are.

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