In my weekly blog scan I came across this question on the HouseHuntVictoria site:

“What exactly is the difference between a mortgage broker, a mortgage planner and someone who sells proprietary mortgages in the role of financial advisor?”

In the spirit of sorting out our industry’s jargon, I’ll take a stab defining each of them.

In the strictest sense, a mortgage broker is a firm or person licensed to deal in mortgages and employ mortgage agents.

A mortgage agent is an individual authorized to deal in mortgages on behalf of a mortgage broker.

A mortgage planner is basically another name for a mortgage agent or individual mortgage broker.

The term “mortgage planner” is largely a matter of semantics. It’s like comparing the difference between a financial advisor and a financial planner.

People who call themselves a mortgage planner, however, (like me) do generally intend for it to have a distinct meaning. I would distinguish between “mortgage planner” and “mortgage agent” as follows.

A mortgage agent is generally someone who finds the best mortgage for each client based on that client’s income, credit, and property profiles.

A mortgage planner does the same thing but attempts to add additional value by:

  • Evaluating the client’s short-term AND long-term goals, and designing custom financing accordingly
  • Developing various strategies for clients to become mortgage-free and save as much interest as possible after they get their mortgage
  • Employing more advanced technology to help the client meet their real-estate-related financial goals.
  • Providing debt counseling when needed
  • Doing everything possible in the interests of building a strong long-term relationship

Do mortgage agents sometimes perform the same functions as a “mortgage planner”? Absolutely; but mortgage planners should generally hold themselves to higher standards of fiduciary responsibility if they are indeed worth their salt.

Now. How do these definitions compare to someone who sells proprietary mortgages in the role of a financial advisor? The key phrase is “proprietary mortgages.”

I have a good friend who works for Investors Group (an excellent firm by the way) and sells mortgages only through them—i.e. he only sells Investors Group’s proprietary mortgages. In many cases, these mortgages meet the client’s needs; but in other cases, mortgages from other lenders would better serve the client.

A mortgage planner or agent has a duty to compare the best mortgages from ALL available lenders, and pit them against one another to get you the best deal. That’s the big difference.

So hopefully by now the distinctions are a touch clearer, and hopefully you haven’t pressed the snooze button! The mortgage industry in Canada is changing fast. I’m sure as things evolve so will the definitions of these mortgage professionals.