In British Columbia, mortgage brokers often want to build more efficient practices by adding licensed support. That may be true whether the broker operates personally or through a personal mortgage corporation (“PMC”). The commercial goal is straightforward. If a licensed assistant can help manage files, support clients, and assist with mortgage work, the lead broker can scale more effectively.
The legal structure, however, matters.
Under the Mortgage Services Act, a licensed assistant cannot simply be hired directly by a mortgage broker, whether acting personally or through a PMC, to perform licensed mortgage services. If the assistant is licensed and doing licensed mortgage work, that work must be carried out on behalf of the mortgage brokerage the assistant is licensed to and engaged by.
That does not mean licensed support is impossible. It means it has to be structured through the brokerage.
The Basic Rule Under Section 11
The key provision is section 11 of the Mortgage Services Act.
Section 11 provides that a mortgage broker must:
- be licensed in relation to a single mortgage brokerage;
- be engaged by that mortgage brokerage;
- provide mortgage services only on behalf of that mortgage brokerage; and
- accept remuneration for mortgage services only from that mortgage brokerage.
Those rules answer two important questions.
First, if a person is a licensed mortgage assistant, who are they acting for?
Legally, they are acting for the brokerage.
Second, who can pay them for licensed mortgage services?
Again, the answer is the brokerage.
That is why the brokerage, and not the individual broker or the broker’s PMC, is the legal home for licensed mortgage work.
Why Direct Hiring Does Not Work
Because of section 11, a mortgage broker should not:
- directly employ a licensed assistant to perform licensed mortgage services;
- retain a licensed assistant as an independent contractor for licensed mortgage work; or
- pay a licensed assistant directly for work on mortgage files,
whether personally or through a PMC.
Those arrangements suggest that the licensed assistant is working for, and being compensated by, someone other than the brokerage. That is difficult to reconcile with the statutory language.
The issue is not whether the broker needs help. The issue is making sure that the help is delivered through the right legal channel.
The Better Structure: Brokerage Provided Licensed Support
The compliant model is a brokerage support model.
Under that structure:
- the brokerage hires or engages the licensed assistant;
- the licensed assistant performs mortgage services on behalf of the brokerage;
- the brokerage allocates the licensed assistant to support a specific mortgage broker, whether or not that broker operates through a PMC; and
- the brokerage pays the licensed assistant.
This allows the broker to receive the practical benefit of licensed support, while keeping the legal relationship where the Act requires it to remain, with the brokerage.
If the broker is intended to bear the cost of that support, the brokerage can separately charge the broker, or the broker’s PMC if applicable, through an internal reimbursement, support fee, cost sharing, or resource allocation arrangement.
In that case, the economics may be allocated to the broker or the broker’s PMC, but the legal relationship still stays with the brokerage.
Can the Licensed Assistant Be Dedicated to One Broker?
Yes, potentially.
A licensed assistant can be assigned primarily, or even exclusively, to support one lead mortgage broker. That broker may operate personally or through a PMC. Either way, that kind of dedicated support model is not necessarily inconsistent with the Act.
The important point is that the legal structure must remain intact. In other words:
- the licensed assistant must remain licensed to the brokerage;
- the licensed assistant must remain engaged by the brokerage;
- the licensed assistant must continue to act on behalf of the brokerage; and
- the licensed assistant must continue to be paid by the brokerage.
So exclusivity is not the main problem. The real issue is preserving the correct legal relationship.
Where Teams Become Useful
This is where the concept of a team becomes particularly helpful.
A mortgage broker may want clients, referral partners, and the market generally to understand that certain licensed individuals work together and support that broker’s practice. But if those licensed individuals are not legally employed by the broker or the broker’s PMC, how should that arrangement be described?
The answer is to describe it as a brokerage team.
A team allows the brokerage to identify that certain licensed brokers are grouped together operationally and support a particular lead broker. That helps communicate the commercial reality without changing the legal structure.
Used properly, the team concept allows for public identification of the arrangement while avoiding inaccurate statements that the licensed assistant is:
- employed by the broker personally;
- employed by the broker’s PMC;
- contracted directly by the broker or the broker’s PMC;
- licensed under the broker or the broker’s PMC; or
- acting independently of the brokerage.
In other words, the team concept is a practical way to describe the brokerage’s internal organization of licensed personnel. It does not change who the licensed assistant works for in law.
How the Arrangement Should Be Described Publicly
Public facing descriptions should reflect the underlying legal reality.
Safer descriptions include:
- a licensed broker working with a lead broker through the brokerage;
- a licensed member of the brokerage team supporting a particular broker; or
- a brokerage allocated licensed resource dedicated to supporting that broker, or that broker’s PMC if applicable.
The objective is not to hide the relationship. It is simply to describe it accurately.
That matters because a misdescription can make a compliant brokerage support model look like an impermissible direct employment model.
How Compensation Should Flow and Why
If a licensed assistant is involved, the cleanest compensation structure is:
- the brokerage pays the licensed assistant; and
- the broker, or the broker’s PMC if applicable, reimburses or pays the brokerage under a separate internal arrangement.
This is consistent with section 11, which says that a mortgage broker must not accept remuneration for mortgage services from anyone other than the brokerage they are licensed to.
That compensation rule is important for more than just technical compliance. It reflects the structure of the Act itself. The legislation is designed so that licensed mortgage services flow through a single regulated channel:
- the brokerage engages the licensed individual;
- the licensed individual acts on behalf of the brokerage; and
- the brokerage pays the licensed individual.
That creates a clean line of responsibility. It makes it clear who is supervising the licensed work, who is accountable for that work, and where the compensation is coming from.
If a broker or a broker’s PMC paid the licensed assistant directly, that would blur those lines. It would make the arrangement look less like brokerage based licensed activity and more like the broker or PMC was independently operating its own licensed support structure. That is exactly what section 11 is designed to avoid.
For that reason, where the broker wants to bear the cost of the licensed assistant, the better approach is for the money to flow through the brokerage, not around it. The brokerage can then recover the cost from the broker or the broker’s PMC under an internal reimbursement or resource allocation arrangement, while preserving the statutory rule that the licensed assistant is remunerated only by the brokerage.
So if the lead broker wants to fund the support, the answer is not direct payment to the licensed assistant. The answer is a properly documented brokerage level payment flow.
Practical Takeaway
For mortgage brokers in British Columbia, whether operating personally or through a PMC, the practical rule is simple:
- licensed work stays with the brokerage;
- licensed assistants remain brokerage resources;
- dedicated support can be structured through the brokerage; and
- teams can be used to describe that arrangement publicly.
What should be avoided is any structure that suggests the broker, personally or through a PMC, has directly hired a licensed assistant to perform licensed mortgage services.
Final Thoughts
A mortgage broker cannot directly hire a licensed assistant to perform licensed mortgage work, whether personally or through a PMC.
But that does not mean licensed support is off the table. It means the support has to be provided through the brokerage, which may hire or engage the licensed assistant and allocate that person to support a particular broker, even on a dedicated or exclusive basis.
When structured properly, this creates a workable middle ground. The broker gets meaningful licensed support, the brokerage remains the legal platform, and the arrangement can still be identified publicly through the concept of a brokerage team.
Statutory Reference
Mortgage Services Act, SBC 2022, c. 4, s. 11(1), (3) and (5)