Forget eight per cent!
CAAMP President Jim Murphy is suggesting Ontario could lose as much as 15 per cent of its brokers and agents with new re-licensing requirements, effectively erasing gains made since the last major cull.
“In the last license renewal period in March 2010, 15 per cent of Ontario licensees – agents and brokers – did not renew their license,” he told MortgageBrokerNews.ca. “In the 18 months since ….They have made up for the 15 per cent loss. Brokers and agents in Ontario this time must also take a re-licensing course, which they did not have to do last time (and) my guess would be (the loss could be) 10 per cent to 15 per cent.”
That kind of chop would likely result from discouraged and inactive brokers opting to exit the business rather than submit to new education requirements introduced this year and taking effect next March.
Murphy’s estimate is, in fact, larger than the five per cent to 10 per cent loss estimated by brokers earlier this month as part of a MortgageBrokerNews article examining the possible effects of new re-licensing requirements for Ontario mortgage professionals.
Come April 1, 2012, brokers and agents must prove they’ve completed a re-licensing course, designed to improve compliance with provincial laws. The education requirement also brings Ontario professionals in line with their counterparts in Alberta and British Columbia, who already submit to similar education mandates as a condition for licensing.
If Murphy’s estimate prove correct, the industry could lose as many as 1,830 of the current 12,200 brokers and agents now registered in Ontario. Their numbers have actually grown since March by about 700, that despite a slower economy and its effects on the real estate market.
Those new agents are most susceptible, a relative newcomer told MortgageBrokerNews.ca in September.
“I think re-licensing requirements may be the thing that pushes a large number of new agents who have been struggling or are already inactive over the edge,” said Leon Blackman, with Verico The Mortgage Practice. “Having to pay for the course and having to take it may be just enough to discourage agents who are ambivalent about the industry from renewing. But that loss may be a good thing in the sense that those people are obviously not committed, otherwise, they would take the re-education.”
Blackman is pegging that possible loss at eight per cent to 10 per cent of Ontario’s current roster of mortgage professionals. That number stood at 11,581 in April, representing a 27 per cent jump from the year-ago period. It’s from those ranks of new agents that the industry is most likely to see shrinkage, he said.
Blackman’s number is in line with the estimates of seasoned broker Peter Majthenyi, the lead planner with Mortgage Architects telling MortgageBrokerNews.ca that the slowing, yet increasingly competitive Canadian market will not only cull the number of new entrants to the broker industry, but thin the existing ranks by as much as five per cent.
Still, there are real signs that an increasing number of mortgage professionals are strengthening their connection to the industry, not pulling up their stakes.
“An interesting note,” said Murphy, “is the number of brokers in Ontario has increased noticeably to over 2,700 of the 12,200 total.”