In a speech to a mortgage broking conference, the Australian Securities & Investments Commission provided an update on its ongoing review of the mortgage broking sector, which is examining how well brokers comply with the best interests duty. ASIC said the review reflects the scale of the market, with brokers arranging 81% of new residential mortgages in Australia, and set out the conduct it expects to see rather than any early findings. ASIC said brokers should recommend loans that fit a customer’s circumstances, priorities and required features, at a price that is appropriate relative to other market offers, and should document and explain the reasons for those recommendations. It stressed that customer education is part of the duty, that brokers should not act as order-takers where a product is unsuitable or a better option exists, and that recommendation records must be personalised rather than boilerplate. For licensees and broking businesses, ASIC highlighted the need for risk-based quality monitoring, use of available data to detect misconduct, clear complaints-handling processes and compliance with internal dispute resolution obligations under Regulatory Guide 271. As part of the review, ASIC analysed hundreds of complaints relating to brokers’ best interests duty, and noted that over the past five years it has used administrative powers 17 times to remove or restrict mortgage brokers and brokerage firms from the industry. ASIC said the mortgage broker review is due to be completed later this year. Separately, it discussed syndicated mortgage fraud, which is not a focus of the current review, and said it is working with the Australian Prudential Regulation Authority, AUSTRAC, police and major banks to assess controls and reminded licensees to report suspected misconduct by other licensees or representatives.
Australian Securities & Investments Commission2026-07-22
Australian Securities & Investments Commission outlines expectations in mortgage broker review of best interests duty compliance
In a conference speech, the Australian Securities & Investments Commission set out what it expects from mortgage brokers in its ongoing review of compliance with the best interests duty. ASIC said brokers and licensees should focus on suitable, well-documented recommendations, risk-based quality monitoring and effective internal dispute resolution, with the review due to finish later this year. It also said it is working with other authorities and banks on syndicated mortgage fraud outside the scope of the current review.