A Principal Broker observes that one of his mortgage agents consistently recommends a specific subprime lender to clients, even when traditional A-lenders might be viable. The Principal Broker is concerned about potential conflicts of interest. What is the Principal Broker's obligation regarding this agent's conduct in BC?

Question: A Principal Broker observes that one of his mortgage agents consistently recommends a specific subprime lender to clients, even when traditional A-lenders might be viable. The Principal Broker is concerned about potential conflicts of interest. What is the Principal Broker's obligation regarding this agent's conduct in BC?

Answer options: ✅ To review the agent's files to ensure the recommendations are suitable for each client and that all disclosures, especially regarding conflicts of interest, have been properly made.

• To immediately terminate the agent's registration without further investigation.
• To advise the agent to vary their recommendations at random to avoid suspicion.
• To assume the agent has good reasons for their choices and take no action.

Correct answer: To review the agent's files to ensure the recommendations are suitable for each client and that all disclosures, especially regarding conflicts of interest, have been properly made.

Explanation: The BC Mortgage Brokers Act and BCFSA regulatory guidance require Designated Individuals (Principal Brokers) to supervise agents, monitor their conduct, ensure suitability of recommendations, and address potential conflicts of interest through proper disclosure and advice.