A mortgage agent assists a client with a mortgage renewal. During the assessment, the client indicates they are considering using a portion of the renewed mortgage to invest in a high-risk venture. The agent reviews the client's financial situation and determines the investment could severely jeopardize their ability to repay the mortgage. Under professional conduct regulations, what is the agent's MOST appropriate course of action?

Question: A mortgage agent assists a client with a mortgage renewal. During the assessment, the client indicates they are considering using a portion of the renewed mortgage to invest in a high-risk venture. The agent reviews the client's financial situation and determines the investment could severely jeopardize their ability to repay the mortgage. Under professional conduct regulations, what is the agent's MOST appropriate course of action?

Answer options:

• Proceed with the renewal as requested, as the client's investment decisions are outside the agent's scope of responsibility. ✅ Advise the client strongly against the high-risk investment and document this advice, but ultimately follow the client's instruction regarding the mortgage.
• Refuse to proceed with the mortgage renewal unless the client rescinds their plan to invest in the high-risk venture.
• Report the client's intentions to FSRA, citing concerns about predatory lending practices.

Correct answer: Advise the client strongly against the high-risk investment and document this advice, but ultimately follow the client's instruction regarding the mortgage.

Explanation: Mortgage agents have a professional obligation to act in the best interests of their clients and provide suitable advice. While an agent cannot dictate a client's financial decisions, they must thoroughly assess suitability and provide clear, documented advice regarding the risks associated with the client's stated intentions, especially when those intentions could impact their ability to meet mortgage obligations. Refusing the renewal outright due to a client's independent investment plan would exceed the agent's authority.