I want to challenge this assumption. Knowing credit is not the same as knowing how to be a broker. The banker never acted in accordance with the principle of best interests and never subjected his personal file to the scrutiny required of a broker under RG 273. Banks evaluate the client; they do not evaluate an employee’s decision making in the same way that an aggregator’s review team evaluates a broker’s decisions. The whole belief system is different.
It is also worth noting that some of the individuals targeted in recent fraud allegations came into brokerage directly from senior positions at large lenders. This is not a coincidence that the industry can afford to ignore.
What makes good mentoring tick?
A proper mentoring program is about much more than just training on lender policies and niches. When done correctly, this is one of the most powerful fraud prevention tools we have because it forces a structured and ongoing conversation about how the broker conducts its business. A good mentor must understand who the mentee really is: where their leads come from, who is directing them, and – most importantly – who the mentee is really acting for. Is this the borrower? Or is it invisible that the referrer is pulling the strings of the file?
This is where the recent fraud allegations emerged. Suspicious referral channels, packaged applications that arrive “ready to use,” third parties with too much influence over customer files. A mentor who reviews deals one-on-one and asks the right questions about referral sources will see warning signs that are not present in a compliance review and can tell the mentee what those signs look like before they become a problem.
Mentoring standard for former bankers
According to Purple Circle, the industry needs a certain standard of mentoring for former bankers. I’m not suggesting that former bankers go through the same full two-year program as a new banker. Their credit knowledge is real and should be recognized. But they still need to be trained, even on a limited basis, with a focus on best interests, file-level compliance, referral due diligence, and a cultural shift from “bank employee” to “broker acting on behalf of the client.”