Regulator’s first post‑implementation review zeroes in on documentation, monitoring and complaints handling
ASIC’s first review of the mortgage broker best interests duty (BID) since its commencement in 2021 is under way, with a focus on how brokers and licensees are applying the obligation in practice and how their oversight frameworks are functioning. The review is assessing whether brokers’ processes, documentation and compliance systems adequately support consumer protection across regulated credit.
The review began in mid‑2025, when ASIC issued targeted information requests to several large aggregation groups as part of its ongoing supervisory work. It is only the second time the regulator has sought broad, sector‑wide data from mortgage broking since the 2016 Mortgage Broker Remuneration review.
The BID review forms part of a broader program of work across regulated credit. ASIC is also scrutinising debt management and credit repair firms, debt collection practices and motor vehicle finance, with the aim of gauging whether existing consumer protections remain effective.
According to Anja Pannek (pictured top), chief exectuive of the Mortgage and Finance Association of Australia (MFAA), the review had been expected through the association’s regular contact with the regulator. “We anticipated BID would be reviewed, especially as it’s been five years since its introduction,” she said.
“As part and parcel of our ongoing stakeholder and member engagement, we’ve been liaising closely with ASIC and major aggregator groups as the review progressed during the second half of 2025.”
Early messages from the review and related engagement point to several themes relevant to brokers and licensees. First, clear, contemporaneous documentation and record keeping are central to demonstrating how BID has been met on each file. Second, brokers need to be able to show how every recommendation aligns with the client’s best interests, particularly where the recommended loan is not the lowest‑cost product available. Third, licensees are expected to maintain robust, documented processes that allow them to monitor and evidence broker compliance with BID.
At the MFAA’s Looking Ahead 2026 virtual professional development event earlier this month, ASIC senior executive leader Nathan Bourne explained the regulator’s approach. “We look at the way industry is operating, we look for better and poorer practices and then think about ways we can inform broader stakeholder groups on what that looks like,” he said.
“It has been noted that there is a low level of reports of misconduct but we did think now is the right time to come and do some work with the industry.”
As part of the BID review, ASIC has been analysing reportable situations data, complaints lodged with the Australian Financial Complaints Authority (AFCA) and other misconduct reports, alongside information gathered from aggregators and licensees.
Bourne underlined the importance of brokers’ role in major financial decisions. “I think the work that the MFAA does in supporting brokers to make sure they’ve got all the right frameworks in place is very positive,” he said. “We want to make sure those frameworks are applied consistently and, ultimately, that they can be tested by aggregators and licensees for their representatives to make sure that they’re meeting their obligations.
“If there are results coming out of this that require further education and training, [it’s about] ratcheting up the benefits for the industry, getting those lessons and bringing them back into industry. We’re always trying to do better. The education piece for consumers is a key part of the process.”
ASIC expects to publish the outcomes of its BID review later this year. Bourne indicated that, depending on the findings, the regulator may release either a media statement or a short‑form report. Any public communication is likely to set out examples of stronger and weaker practices, which may guide brokers and licensees as they refine their policies and procedures.
Pannek said that, although trust in the mortgage broking industry remains solid, the review is a timely opportunity for further improvement. “This review provides an important opportunity for industry to better understand where practices can continue to evolve and improve.”
While ASIC’s review continues, the MFAA is urging members to further strengthen their understanding of BID compliance. To support this, it is running a one‑hour “Best interests duty in practice” webinar at 2pm on March 17, which is worth one CPD hour.
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