Best Interests Duty Under Review: How Brokers Are Tightening Their File Notes

ASIC has begun delivering updates from its review of how mortgage and finance brokers are meeting their Best Interests Duty obligations, with thousands of brokers hearing the first briefing directly. The review is ongoing, and the early signal is consistent with what compliance teams have said for years: the duty itself is unchanged, while the standard of evidence brokers need to hold is under closer scrutiny than it has been.

What ASIC’s Review Is Actually Looking At

Best Interests Duty requires brokers to act in a client’s best interests, prioritise the client’s interests over their own, and avoid recommendations shaped by conflicted remuneration. Those obligations are established and familiar. ASIC’s review is examining how well brokers can actually demonstrate them: whether the file shows a genuine comparison of suitable products, whether the client’s stated objectives are documented clearly enough to justify the final recommendation, and whether the reasoning for ruling out alternatives is on the record rather than assumed.

Where Files Usually Fall Short

The gap between a broker who has genuinely acted in a client’s best interests and a file that proves it is common. A broker might have compared five products mentally, weighed the client’s stated priorities correctly, and landed on the right recommendation, while the file itself only records the product chosen.

That gap becomes a problem the moment a file is reviewed, because ASIC and the client both rely on the file as the record of what happened, whatever the broker actually remembers of the conversation.

What a Complete File Actually Contains

A file that holds up under review typically includes a documented client fact find covering income, expenses, goals and risk tolerance; a record of every product actually compared against those objectives; a clear note of why alternatives were ruled out; and a signed acknowledgement from the client of the recommendation and reasoning. Each of these exists as a discrete document or entry, captured at the time it happened rather than reconstructed from memory afterwards.

What Can Be Prepared Ahead of the Broker’s Recommendation

Fact-find data entry, initial product comparison packs built from the client’s stated criteria, document collection and verification, and consent form tracking can all be prepared by someone other than the broker, working from the client’s intake information and the firm’s product panel. This is the bulk of the paperwork volume in a typical file, and it’s process work with a clear standard of correctness.

A comparison pack prepared this way pulls the client’s stated criteria (loan amount, purpose, preferred structure, rate sensitivity) and lines them up against the panel’s relevant products, with the numbers calculated and the standard exclusions applied. The broker then reviews that pack, applies their judgement to which product actually fits, and documents why. What used to take a broker an hour of manual comparison work per file becomes a review task measured in minutes.

What Stays With the Broker

The actual product recommendation, the reasoning for why it best serves the client’s stated objectives, and the final sign-off on the file stay with the broker, because that’s the professional judgement Best Interests Duty is actually testing. Someone else can build the comparison pack. The broker still decides which product wins and still owns the reasoning behind it.

Where Offshore Support Fits

A trained offshore file documentation assistant can build the comparison pack, track outstanding client documents, prepare fact-find summaries, and assemble the file into a consistent, review-ready format, all before the broker sits down to make the recommendation. File preparation stops being something squeezed in around client meetings and becomes a task that’s done properly every time, regardless of how busy the week is.

If your files would tell ASIC the full story of how a recommendation was reached, that’s a strong position. If they’d need reconstructing from memory, the gap is worth closing before a file gets pulled for review.

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