ASIC seeks to expand best interests duty

Alex Burke,  Senior Writer,  No More Practice Education

Following on from a new report, Looking for a mortgage: Consumer experiences and expectations in getting a home loan, ASIC has established several key findings about the mortgage broking industry.

In short, these are:

  • consumers visiting mortgage brokers expect the broker “to find them the ‘best’ home loan”
  • mortgage brokers were found to be inconsistent in the ways home loan options were presented to consumers
  • those buying their first home were more likely to take out their loan using a mortgage broker’s services

Noting that consumers surveyed found taking out a home loan was a “complex” and “overwhelming” experience, ASIC commissioner Sean Hughes said: “Lenders, brokers and aggregators must step up to make it easier for consumers to meaningfully compare loan options and for brokers to communicate how a home loan option has been selected for them.”

To assist in this process, Hughes said ASIC would be developing a “new home loan interest rate tool to improve price transparency for consumers to compare options.”

“We expect this tool will be made available on ASIC’s MoneySmart website next year,” he added.

Crucially, though, Hughes also said the regulator “strongly supports” extending the best interests duty to mortgage brokers. “Importantly,” he said, “the implementation of such a duty will align the role of brokers to the reasonable expectations of consumers.”

ASIC’s comments follow the release of another report, Financial advice: What consumers really think (REP 627). This report, based on a survey of 2,545 participants, found that 35% of respondents said the main barrier to getting financial advice was that it was "too expensive". A further 29% said their financial circumstances were "too limited for it to be worth getting financial advice."


The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice Education Pty Ltd or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here.

Liked this article? Let us know

Want more of the latest in opinions, expert insights and training?

Subscribe to our free eNewsletter now

/ Related content

Is ASIC doing enough?

With consultation on the regulator's new powers now open, it's an impo....

New ASIC powers are incoming

Product intervention powers are now open for consultation. Find out more....

ASIC pulls trigger on remuneration crackdown

A new case sheds light on the regulator's plans.

Chris Todd

10/09/19

Why don't ASIC just take over all advice business and do it themselves. They seem to know what's best for every one

Leave a comment /

Related content /

12 September, 2019

Alex Burke,Senior Writer,No More Practice Education

Is ASIC doing enough?

With consultation on the regulator's new powers now open, it's an important question.

Read now

02 July, 2019

Alex Burke,Senior Writer,No More Practice Education

New ASIC powers are incoming

Product intervention powers are now open for consultation. Find out more here.

Read now

WordPress Lightbox Plugin