Advertising Your Mortgage Brokerage Services

A common question RECA gets from mortgage licensees is about who can advertise their services as a “mortgage broker.” This confusion is understandable given that there are two licence classes for mortgage licensees in Alberta: associate and broker.

Mortgage Associate vs. Mortgage Broker

Both mortgage associates and mortgage brokers must meet their respective qualifications and register with a mortgage brokerage to be licensed with RECA.

The difference between the two licence classes, as defined in the Real Estate Act Rules, is in the industry professional’s role in the operation of a brokerage: professionals with the mortgage associate licence class are registered with, and employed within, a brokerage, whereas professionals with the mortgage broker licence class are responsible for the brokerage’s operations.

Who is a mortgage broker?

Fundamentally, any individual who is authorized under the Real Estate Act to broker mortgages can state they are a mortgage broker in their advertising:

According to the Real Estate Act, industry professionals are required to have a mortgage licence to perform the following activities:

• soliciting a person to borrow or lend money to be secured by a mortgage
• negotiating a mortgage transaction
• collecting mortgage payments
• administering mortgages
• buying, selling, or exchanging mortgages, or offering to do so
• holding oneself as a mortgage broker

So, despite the difference in their class of licence, mortgage associates are registered and approved to deal in mortgages. Therefore, they are also technically mortgage brokers and can advertise themselves with this title.

Who isn’t a mortgage broker?

While industry professionals with both the mortgage associate and mortgage broker licence classes are mortgage brokers, there are individuals whose work is related to mortgages who are not mortgage brokers. Usually, these individuals work directly for the lenders and may refer to themselves as “mortgage specialists” or a similar title.

While these individuals may solicit someone to borrow or lend money and may negotiate mortgage transactions, they are not mortgage brokers and cannot refer themselves with this title if they are not authorized by RECA.

Individual who advertise themselves as a mortgage broker without authorization from RECA is in breach of section 17 of the Real Estate Act, which states that no person shall deal or advertise themselves as a mortgage broker who does not hold a licence to do so issued by RECA.

Advertising your services

You can also choose a title other than mortgage broker in your advertising. Keep in mind though, using phrases such as “expert” or “specialist,” or dropping “mortgage” entirely from your title and using only “broker” or “owner,” implies that you have a lot of experience or hold a high position in your brokerage. If the title you are considering using in your ads exaggerates your level of experience or knowledge, your position in your brokerage, or could otherwise mislead consumers, you should replace it with a more accurate option.

Basically, if you hold a mortgage industry licence with RECA, you may use the title of mortgage broker, or any title you prefer as long as the title isn’t false or misleading and your brokerage approves your advertisements.

Social Media Incentives: What you need to know!

Social media accounts have become one of the most frequently used advertising platforms for real estate and mortgage brokerages. These platforms are appealing to industry professionals as they offer cost-effectiveness and a wide audience. They also provide opportunities to offer creative incentives to potential clients through industry professionals’ personal social media accounts.

Incentives are a significant part of social media advertising in the industry and include extras like travel miles, gifts, contests, gift cards and trips. Any incentive offered by one industry professional within a brokerage must be offered by all industry professionals registered with the brokerage.

Being able to offer creative incentives is a great way to attract new clients. However, advertising is advertising, whether online or off, and the rules that apply to traditional advertising apply to social media advertising.

All advertising must be done on behalf of your brokerage. Industry professionals must clearly indicate their brokerage name in all advertisements and marketing materials. A brokerage name is “clearly indicated” when a reasonable consumer, under normal circumstances, can clearly distinguish the name of a brokerage in an advertisement.

Industry professionals should make sure they are familiar with their brokerage advertising policies and procedures before creating any marketing materials or posting ads online. And, if an industry professional’s social media profile clearly promotes their services or their brokerage, and may include marketing tactics such as the incentives above, their profile is considered a professional profile, and it also falls under RECA’s Advertising Guidelines.