HUB Capital Inc. (HCI) has an agreement with Manulife Bank of Canada Mortgage Products (Manulife) to allow clients of HCI to have access to a Preferred Rate Mortgage Program and an asset/liability management product known as Manulife One. HCI Reps are not registered or licensed to offer mortgage products; therefore, HCI has entered into a referral arrangement with Manulife which allows you to refer your clients to Manulife for this product and service. A referral fee is paid to HCI and subsequently to the Rep for those clients that are referred.
A referral arrangement means that you may “introduce” your client to Manulife by explaining the basic concept of Manulife’s mortgage products; however, you may not assist in the completion of an application form, compare mortgage products of Manulife with other industry mortgage products or in any other way conduct the business of a mortgage broker without being licensed as a mortgage broker. All activity that requires registration or licensing resulting from this referral will be provided by Manulife.
MFDA regulations (MR‐0030) require that clients be made aware of the relationship between HCI and Manulife and the services and products they may purchase through Manulife. Included in this disclosure are the following required items:
- The name of the entities involved in the referral arrangement.
- The products and/or services offered through the referral arrangement.
- The amount of the fee that is paid to HCI as a result of this referral.
- The name of the entity paying the referral fee and the name of the entity receiving the fee.
Disclosure also must be made to the clients that any attempt on the Representative’s part to enter into any activity that requires registration or licensing (other than mutual fund securities) is illegal.
Effective immediately, all clients that are referred to Manulife for the purpose of purchasing the Manulife One product must sign a Client Disclosure. A copy of this disclosure is attached for your reference, and will also be posted to the HUB Capital website under Forms.
The referral arrangement between HCI and Manulife has been in place since 2010; however, HCI has not been actively monitoring the compliance with this regulation. We are now requesting that you obtain client disclosures for all your clients who are currently participating in the Manulife One program. These clients are listed on your monthly commission report from Manulife under the heading: “Referral Fees” (and Product = Manulife One). Clients listed under Bank Products do not require this disclosure. You will have 6 months to provide us with the Client Disclosure for all of these clients. Any clients who are no longer in the program do not need to sign this disclosure. This requirement applies to all current clients only.
When you have the client disclosure signed by your client, please forward the original to your Regional Office. This will be maintained on file in the Regional Office. Compliance with this requirement will now be strictly monitored. Occurrences of non‐compliance could result in a hold being placed on the referral fee.
If you would like further information about this referral or other Manulife products and services, please contact your Regional Sales Team.
If you have any questions about this policy, please contact your Regional Compliance Officer or Branch Manager.