selfregulation
Suitability
When we look at our registration database
of about 4,300 brokers and sub-brokers, the
average tenure is about eight and a half years.
We also know about 40 per cent of registered
brokers and sub-brokers drop out before
completing four years in the business. So there
is a fair bit of turnover.
Many of you have only ever known
bountiful times in the mortgage business.
ere are people who have been at it much
longer and have seen tougher times. And that's
a good thing – but you are in the minority.
ere is a famous quote by Warren Buff et
during the fi nancial crisis: he said "it's true that
a rising tide li s all boats . . . but it's also true
that when the tide goes out you fi nd out who's
been swimming naked".
A self-regulated industry is one that makes
sure everyone is swimming with their shorts on.
At FICOM we are focused on ensuring
the bar of entry to your industry is high. Not
prohibitively so, as we need to regenerate
the industry, but high enough to ensure that
unsuitable entrants are kept out.
One specifi c area we are focused on related
to broker suitability is bankruptcies. We always
look closely at the facts and circumstances of
every application, but in principle, we believe
that if you demonstrate that you are unable to
take care of your own personal fi nancial aff airs
you ought not to be providing advice to others
on their aff airs.
We also look closely at repeated complaints
or misconduct when reviewing applicants for
licensing or relicensing.
You can play a self-regulatory role fi rstly
by reporting unsuitable individuals who are
acting dishonestly.
A self-regulated industry would also never
front applications to lenders from unregistered
parties and they would not pay referral fees
where unlicensed activity is involved.
Paying referral fees where unlicensed
activity is involved creates an incentive for
this activity and undermines your legitimate
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| spring 2015 mbabc.ca MortgageBroker
SETTING HIGH
STANDARDS
