training in the canadian mortgage industry

When a person starts a new job, they expect some training. That person may have gone to school to “qualify” for that job, but when they start, there is usually someone who explains the duties and responsibilities of the job itself, the computer systems, and the daily routine. 

To become a licensed mortgage broker in Canada, you have to meet the specific educational requirements set by your home province. These courses contain important and valuable information, but they are not job training, nor are they meant to be. Successful completion doesn’t prepare a person to jump right into the real life job of mortgage broker. Basic training is needed first, just like with any new job, as soon as a person is licensed. 

In the mortgage business though, training is a complicated topic. 

The mortgage brokering industry as we know it in Canada today is in fact quite new. National brokerages got started only about 25 years ago, when independent mortgage lenders began offering brokers “volume bonuses”. The new national brokerages focused on “volumes” and began recruiting everyone and anyone who could pass their provincial licensing course, telling them: “Training isn’t needed because you learn the job as you go.” Why did they believe that?

Before the rise of the national brokerages in Canada, people who became independent mortgage brokers didn't need training because they came from banking, real estate, or financial service backgrounds. They saw an opportunity to be their own boss and have control over their own income potential. They already had experience with credit analysis and lending, and they’d had training from previous employers when they started their careers. This might be how the “training isn’t needed” mindset originated.

There is definitely an element of “learning as you go” for mortgage brokers because every lender, every client, every financial situation, and every scenario is different. This is why having a mentor or supervising broker is very important for new brokers. But before that, how can a newly licensed broker prospect for clients, or even start talking mortgages with anyone, before they know what they’re talking about? 

Other factors that make training a complicated topic: 

Mortgage brokering is a commission-based job. Active mortgage brokers are busy earning a living for themselves, as they should be. Expecting them to also help newly licensed brokers learn the basics, with no compensation, isn’t realistic. And it’s not their responsibility.  

Brokerages aren’t “employers” and individual mortgage brokers aren’t “employees”, so many brokerages don’t feel obligated to provide basic training. From this point of view, the job of mortgage broker has more in common with the job or real estate agent than it does with a banking job. Brokerages might be responsible for the professional conduct of their licensees, but that doesn’t mean they must provide basic training. 

Brokerage owners have told me there is no money available for training because brokers demand the highest possible commission splits. I would ask them to review their upper management salaries first, but also (1) newly licensed brokers are in no position to demand anything, and (2) if their current busy, successful brokers are getting the highest possible commission splits, is the brokerage operating at a loss? If so, why do they continue operating?

Brokerage owners have also said to me: “Why should we spend money on training new brokers when most of them will leave the business within a year anyway?” and I'd say yes, anyone would leave a job they have no idea how to do, because no training or help is provided and none is forthcoming. 

To me, it seems more about priorities than anything else, but I can't change the industry all by myself. What I can do though, is offer the training material here with the hope that it might make a difference for any struggling, newly licensed mortgage broker, and their future clients.