Aggregator Connective urges mortgage brokers to strengthen BID documentation
Mortgage aggregator Connective has urged mortgage brokers to strengthen their Best Interests Duty (BID) documentation as regulatory scrutiny intensifies in 2026.
The Australian Securities and Investments Commission (ASIC) is conducting an ongoing review of brokers’ compliance with BID, requesting extensive data from national aggregators and analysing broker file samples.
“Best Interests Duty is now five years old and ASIC have left the industry alone. They are now reviewing progress and have collected a lot of data as part of this exercise. The next step is now for them to publish their findings,” said Daniel Oh (pictured), group legal counsel at Connective.
“From their initial comments, the message is simple. It is not enough to act in your client’s best interests. You must be able to demonstrate it clearly and convincingly in your file notes and BID commentary.”
Key compliance concerns
At the Mortgage and Finance Association of Australia’s (MFAA) Looking Ahead 2026 event, ASIC senior executives outlined current monitoring work and expectations for broker conduct under BID, describing the period as “critical” for industry compliance practices.
ASIC confirmed it is analysing data from multiple aggregators, including broker files, supervision systems a nd complaints records as part of its first major BID review since the duty took effect in 2021.
The Finance Brokers Association of Australia (FBAA) has also reminded members to ensure all public communications and advertising adhere to ASIC’s financial services advertising standards.
The association emphasised accuracy and factual substantiation of claims in public statements in light of ongoing regulatory consultations on advertising guidance.
During Connective’s annual Compliance Outlook webinar, 280 brokers were surveyed about compliance issues for 2026.
- 41% identified BID and responsible lending obligations as a top concern.
- 39% cited cyber security and privacy.
While 96% of brokers felt their BID commentary demonstrated compliance, almost half acknowledged that their files could include more detail.
Oh said generic statements such as “better turnaround time” or “valuation considerations” were unlikely to satisfy a regulator auditing files in isolation.
Areas of scrutiny
Connective highlighted that ASIC is focusing on situations where the cheapest lender was not selected or only one lender option was presented.
“ASIC understands that there are legitimate reasons why the lowest rate is not always the best option for a client,” said Amanda Stirling, head of governance at Connective. “What they expect to see is a clear narrative explaining how the recommendation aligns to the client’s stated needs, objectives and circumstances.”
Generic commentary has been a consistent theme in files that attract follow-up questions. Stirling said, “If a regulator can pick up your BID notes in isolation and understand the reasoning, you are in a much stronger position.”
Connective provided over 860,000 lines of data to ASIC, including loan flow data, commission information, product comparison samples, and details of internal monitoring and supervision frameworks.
Oh said the volume of data indicates that BID documentation will remain a central compliance focus in 2026.
“We are expecting ASIC to publish either a media release or a short-form report outlining better and poorer practices across the industry,” he said. “Brokers should not wait for that publication before improving their documentation. Documentation discipline will define this year.”
