Do new agents and brokers receive adequate education and training? Are the provincial licensing requirements enough? MortgageBrokerNewsTV gathered a group of experienced and successful brokers from across the country for our inaugural panel discussion to get their thoughts on this topic, which has seen much debate in the industry over the past few months. In the coming weeks the panel will touch on other mortgage industry hot-button issues. Find out on MortgageBrokerNewsTV, your home for the industry’s best news, opinion and analysis.
Video transcript below:
John Tenpenny: Well first of all I’d like to welcome [you all] to our First Annual CMP-MBN Broker [Expert] Video panel. One of the big topics going around the industry right now is around broker education and licensing requirements for new agents and whether they are stringent enough or more needs to be done, so Callum maybe we will start with you on that topic.
Callum Ross, SVP Agent, The Mortgage Centre, Mortgage Professionals Inc.
Callum Ross: Sure, I guess it’s something that’s been a really important part of Ontario’s changes recently. I would point out that I think from what I am seeing on a national level that things are moving in the right direction. It seems that broker educational requirements are getting more stringent. The challenge that I see is that unfortunately there is still a very low barrier to entry and while you know provinces like Ontario and BC do have requirements periods of time when someone needs to be a mortgage agent before they become a broker. There is a very big difference between someone who activates a mortgage agent license and then does her job recreationally for a couple of years versus someone who gets you know mentorship with being properly mentored by a seasoned broker and right now you know the incremental exams, I understand the requirements are maybe not as tightly set as they perhaps could be to ensure improvement. So while it’s happening in the right direction, I think there is a very big gap still between the provinces and ultimately it still falls a fair way short of what we see in the certified financial planning and some of the other financial educations basis.
John Tenpenny: Greg?
Greg Martel, Owner Broker, Dominion Lending Centres, Harbour View Mortgages
Greg Martel: You know I agree with that Callum. I also want to add the fact that most brokers I work with typically they get in the industry and they learn the process of processing a deal, but the fact is that after they get them, the basic ... let’ say the basic systems are in place to submit a deal [and submit] to a lender with the proper notes, the main problem is that, they are not building a business and to be be able to establish start to finish how the process works and how to be able to go from 5 million to 15 million is really important.
John Tenpenny: Right Deb?
Deb White, Owner Broker, Dominion Lending Centres, White House Mortgage
Deb White: Well education is really really important and I think that by coming to camp, going to we have MBABC as an event and this year it’s going to be in May, the speakers that they bring [empanelled,] I think it’s almost mandatory that [I viewed] ownership push, that it’s mandatory that the agents attend because they learn so much, to just like Callum said to just be a part time broker and then all of a sudden be able to be an agent and owner of a brokerage it’s not that easy as it’s made out to be.
John Tenpenny: Right, Dan?
Dan Eisner, CEO, True North Mortgage
Dan Eisner: I think the industry is generally a fair way out where it wants to be in 5 years, it needs to think, do they want to be like lawyers where they have, they have a law test, they pass the bar. Right now we are just in this kind of this in between stage where each province is does something differently, in Alberta it costs $2500 to get through courses to become an agent, whereas in Ontario it’s $300 to $400 and because of the interprovincial licensing you can I can, you could find someone in [Cowley], who could take an Ontario license, get licensed in Ontario and a day later move their license over to Alberta thus saving themselves about $2000. So you really need to see more federally, national regulations and if the industry wants to say we want to be professionals, then we have to look at a GMAT, a LSAT some sort of real test that really puts the barrier up. For me myself, I don’t want that, I want it easy, I want to be able to hire agents and I want to be able to fire agents, I want to be able to [pick] them out at my [own], because I know in the end regardless of what they teach in these courses, my guys have to do at least 60 deals before they become kind of qualified to do a deal on their own.
John Tenpenny: 60 you said?
Dan Eisner: 60, 60 deals. And so whatever happens I certainly require that from my end.
Callum Ross: Unfortunately I think you know building on Dan’s point and Deb and Greg’s points is that the, there is a very big difference between teaching someone how to be broker from a or an agent from a tax book standpoint versus the practical application. We saw a big disparity there when you look at the investment advisor industry and some of it is IROC and which is the securities dealers site and some of it is MFDA, the Mutual Fund Dealers site and you know the reality is that showing someone the basics of mortgages versus being a good mortgage advisor and being a real you know positive source of influence to the industry, is a very big difference. I mean unless you get mentorship and mentorship from the right people, I mean even 60 deals is great training. In reality you know the top producers many of which are doing 60 deals in a month but unfortunately until you get that breadth of experience in the day to day, it really can’t be fast tracked. It’s not something that you could learn in a course, I am not sure how we circumvent that. And there is definitely a big disparity because as long as there is provincial licensing, there is going to be a huge provincial disparity and things like the cost that Dan had brought up, not to mention the accreditation, you know makes the industry as a whole very difficult to have a unified voice.
Greg Martel: I think too also with CMP and provincial associations, you always see the top producers at the events. You know I always go, they always continue to add to their education, they always want to become better brokers, they want to be around other brokers in the industry that are successful and we all learn from each other. You know there is people that you know from my success there is two, there is Deb, with Callum and you guys you have helped me personally. You know so just being around that you always see the same faces at these events because they are always the top producers in the industry and they are always continuing to want to improve their business.
Callum Ross: Yeah and I think that is an excellent point, Greg. You know I have had good conversations about this in the past and that was why when I had the opportunity to meet Dan here and ironically it’s a little bit like self help books I find, the people who need to read them the most unfortunately don’t buy them. And I’m not sure how will you ever fix that, I know that as leaders we always challenged to overcome that disparity but I am not really quite sure how we would legislate it, but I think it’s something we need to look at doing.
Deb White: Well it’s almost like in a mortgage broker business, it’s same as in the real estate business, it’s 80:20 rule. 20% of the brokers are doing 80% of the business, right. And that’s the same in the real estate business. Now Dan you are point about, that on Ontario, I was not aware of course that it only cost a few hundred dollars to get licensing, in BC it’s a couple of thousand as well. So I was you know we have got to take course, then we’ve got to wait a few weeks and you’ve got to take the exam and then you’ve got to work under a brokerage for at least two years.
Dan Eisner: With the new inter provincial regulations between BC and Ontario you actually haven’t seen [prominently Alberta does].
Deb White: Yeah, okay.
Greg Martel: It would be a good idea to actually start out with something like lawyers and doctors where they have, you have to have so many credits and so many years, you have to take at least a camp event once every 2 years to be able to get so many credits towards your licensing on annual basis. Doctors do that, they are always constantly improving their education. You know we do have that, but that’s typically where it’s identified nationally credentially.
Callum Ross: Yeah, I think too the other point that you bring up a really really important element that Greg has said, the you know these courses can’t be just attendance, they need to be tested. Because you have people who come in and they use it as a social venue to go out and socialise with their friends and stay out late night and shop for courses and hey look you know I am a socialist and let’s make no mistake about it, however there is a time and place for it and you know like these tests, these courses where you just show up and you get 8 hours of attendance, you were sleeping throughout the class doesn’t really do a lot to raise the [normal 12 months of discipline].
Deb White: Oh I know in British Columbia we have introduced when after 2 years you have to take some continuing education to get your course. It’s almost like being [a new] designation, you have to get points per year. I know last year I had 47 and you only need 10, but who cares, education, if you stop educating yourself you are never going to succeed. So I think education is the key.
Callum Ross: Yeah and I think the other thing too is that we have to look at you know the status and where things are moving and while we don’t think necessarily the status of the current mortgage industry is necessarily there, I think we would all agree that it is moving in the right direction and it takes you know it takes some time to, to modify that and change that you know Dan had brought a point earlier about law school and MBA school and Gmats and Lsats. Well you know even the toppers in schools will still sometimes [rate] Gmats and Lsats, so I mean it’s progress not perfection, I think overall we are progressing in the right area. Whether it will be perfect? No. But I think it is generally moving in the right direction.
Dan Eisner: So Dan do you think that for a broker, pardon me for an agent to become a broker they should be have to write an exam, is that what you were saying, that you didn’t want to do.
Dan Eisner: I am actually for very high fees actually. I think the annual cost to be an agent or a broker, it should well into the thousands, I would support it if $10,000 a year. If you want to get the low end producer, the people that don’t know what they are doing, who are just in it for part time, if you want to get them out of the industry, charge them $10,000 a year to be licensed, that would get rid of them.
Deb White: My thought on that is just because they can afford it doesn’t mean that they are educated.
Dan Eisner: It means they are probably doing a few deals anyways.
Deb White: Yes, I know because I mean there is people who have money stashed away or they do have money right, but
Dan Eisner: I am not saying it’s perfect.
Deb White: Yeah [or they fail] right yeah.
Dan Eisner: Yeah, we won’t get rid of them at once.
Deb White: Yeah.