A critical shortage of principal brokers is quietly destabilizing Canada’s insurance industry, choking off new entrants and leaving existing firms exposed at their most vulnerable moments.
Without stronger investment in licensing pathways and leadership development, the industry risks locking itself into stagnation. Principal brokers anchor compliance and firm-wide ethics - but the role is undervalued, leaving some firms one resignation away from collapse.
It’s a challenge Trevor McIntosh (pictured) knows firsthand. As the founder of both coverboo, a retail brokerage, and Principal Broker Services, a consulting firm specializing in short-term principal broker supervision for Ontario brokerages, he’s seen promising firms with strong strategies stall - not for lack of vision, but due to the absence of a qualified principal broker to bring that vision to market.
To him, this isn’t just a talent gap - it’s a systemic failure the industry keeps overlooking.
For many entering the industry, the first goal is licensing and building a book of business. But for those looking to future-proof their careers - and the firms they work for - there’s a more urgent and often overlooked goal: becoming a principal broker.
The role demands a unique mix of emotional intelligence and relentless compliance oversight. But as McIntosh warned, it’s becoming harder and harder to fill. “There isn’t a lot of new firm activity,” he said. “One of the barriers to entry for folks to start insurance businesses is the lack of available principal brokers out there.”
When a principal broker retires, falls ill, or moves on, smaller firms are often left scrambling to meet regulatory requirements. Yet the industry has done little to make this leadership path accessible to the next generation.
“As an industry, we all need to do a better job at promoting that career path for folks to graduate into a Level 3 license,” McIntosh said.
While the licensing shortage is urgent, a deeper challenge lies in how the principal broker’s role is perceived - especially among newer firms. Many treat the position as a regulatory formality rather than a leadership role that shapes firm-wide culture and safeguards both clients and colleagues.
“Supervision isn’t just about micromanagement,” McIntosh said. “It’s about establishing systems and rhythms that protect clients and the brokerage.”
That means regular file reviews, not just verbal check-ins. It means strict procedures around how client funds are handled and clearly defined roles for who is accountable. Too often, small brokerages believe that because they’re small, they’re exempt from oversight standards.
“Whether you’re a tiny little shop or you’re a big brokerage with 300-plus brokers, there should always really be a great supervision plan,” McIntosh said.
What makes the job even harder is that it’s not just about technical accuracy - it’s about ethical leadership. When top producers start to cut corners on suitability checks, disclosures, or documentation, it’s the principal broker who has to call it out.
“You can’t let good performance mask bad ethics,” he said. “You’re not just risking the relationship with the client, but you’re really, really risking the integrity of the entire firm.”
Those gray areas multiply in a multi-jurisdictional environment. Brokerages operating across provinces must interpret and implement compliance frameworks that differ from one region to another - all while integrating automation-heavy business models that add their own layer of risk.
“If you’re a brokerage that’s not just licensed in one province, but across multiple provinces, there’s hoops you kind of have to jump through,” he said. “Every province is a little different.”
That ambiguity doesn’t excuse inaction. It requires even greater initiative. “It’s really our job to build policies that align with protecting the client,” McIntosh said.
Even with guidance from associations, McIntosh believes the industry can’t rely on handbooks alone. Culture is set through action, and what separates an average leader from an effective one is often invisible.
“Leadership as a principal broker is about how you show up when no one’s watching,” he said. “People always say that real culture is defined by what you do when no one’s looking - and I think that’s especially true in this role.”
That means handling a client complaint with integrity, mentoring junior brokers with care, and making the ethical call when there’s a six-figure policy on the table.
“Even if there’s maybe a $100,000 policy on the line… does it make sense?” McIntosh said. “Are you making decisions that ultimately work in the best interest of the consumer?”
But even as he encourages brokers to step up, he’s watching the market move in the opposite direction. The industry is consolidating. Larger, acquisition-focused brokerages - often backed by insurers - are edging out independent startups, and it’s creating a chilling effect on innovation.
“When these insurance companies control these larger brokerages… they’re the ones that ultimately control whether or not new brokerages are even able to start,” he said. “They don’t want to waste their time appointing a startup broker.”
Even firms with $20 million books are struggling to get appointed because they’re perceived as too risky. And without carrier support, new brokerages can’t scale - no matter how solid their strategy or how experienced their staff are.
“That’s really frustrating,” McIntosh said. “Innovation thrives in industries where there’s competition and choice and optionality. But that’s not what’s happening here.”
McIntosh applauds associations that are streamlining the path to becoming a principal broker but believes brokerage owners must do more to support internal talent.
“You need to incentivize your folks to get this level of license,” he said. “There’s got to be some sort of reward for them at the end of the day.”
