ASIC is reviewing how mortgage brokers comply with the best interests duty, and it expects to report before the end of the year. If you run a broker network you have probably already had two thoughts about that. The first is that your brokers are fine. The second, quieter one, is whether you could prove it if someone asked.
The review is in its final stages. It is the first time ASIC has examined the best interests duty since the obligation began on 1 January 2021, and it lands in a market where, according to the MFAA, brokers settled a record 81% of all new residential home loans in the March 2026 quarter. A bigger share of the market means a bigger share of the responsibility, and ASIC has been clear that this is where its attention sits.
Speaking at the MFAA conference in July, ASIC commissioner Alan Kirkland set out what the regulator expects to see: brokers doing their work well, keeping a consistent focus on quality and putting things right when they go wrong. None of that is a surprise. What is worth sitting with is the middle one, because focusing on quality is a licensee obligation before it is a broker one, and it is the part most small networks have no real way to evidence. This is a plain-English overview of what the review is asking, not legal or compliance advice.
What the review is actually looking at
ASIC began the review in mid-2025 by issuing information requests to large aggregation groups, and it has run in two phases. The first gathered the data: loan flows, commission structures, clawback rates. The second examined the frameworks: how licensees supervise and monitor their brokers, how compliance processes operate and how complaints are handled. For the current review ASIC analysed hundreds of complaints made to licensees about brokers and the best interests duty.
That two-part shape matters for how you read what is coming. The review is not only testing whether individual brokers made good recommendations. It is testing whether the licensees above them would know if they had not. Those are different questions, and the second one is the one that sits with you.
The bar ASIC set on documented reasons
Kirkland was specific about what doing the work well looks like on a file, and his description reflects the approach ASIC set out in Regulatory Guide 273. A recommendation should fit the customer's circumstances and priorities, carry features they actually want or need and sit at a price that makes sense against the other offers available. The reasons for it should be documented and explained to the customer so their decision is an informed one, and the steps taken to educate the customer about their options should be recorded too.
Then he drew the line that matters. Documenting the reasons is not enough on its own. They have to be personalised and meaningful. If a file's reasons are, in his words, "boilerplate factors that could apply to anyone", it is hard to demonstrate the recommendation was in that customer's best interests.
Read that from the licensee's chair. It is not a claim that your brokers are writing bad recommendations. It is a warning that a file can pass a documentation check and still fail the duty.
A file can be complete, tidy and fully documented, and still not show that the recommendation was in the client's best interest.
The test is not whether the reasons are on the file. It is whether they are specific to the person in front of you. The same sentence copied onto every file is documented. It is not personalised, and Kirkland's point is that a regulator can tell the difference.
There is a second edge to the same point. Acting in the customer's best interests is not the same as taking the order. Kirkland was blunt that a professional's job is to tell a customer what they should hear, not simply to arrange what they asked for, and that a broker who processes a request they know is not right for the client is exposed, not protected. A file that records a genuine recommendation reads differently from one that records a transaction, and that difference is visible on the page.
Where this lands on the licensee
Kirkland was equally clear that this is not only a broker-level obligation. Licensees have the benefit of seeing the whole network, and the obligations that come with it, including the requirement under the National Credit Act to take reasonable steps to ensure their representatives comply with the credit legislation (section 47(1)(e)). In practice that means knowing, not assuming, that the recommendations going out under your licence would stand up.
His guidance on how was concrete. Identify the metrics that suit your business, monitor them regularly and use the data you already hold to detect and address problems before they spread. Take extra care when reviewing recommendations, to check the reasons make sense for the specific client. The through-line is that supervision is an evidence exercise, not a matter of good faith, and the evidence lives in the files.
This is the gap most small networks cannot close from where they sit. The data ASIC is describing already exists inside every brokerage, in the settled files. What is usually missing is anyone whose job it is to read a sample of those files after settlement, systematically, and ask whether the reasons on them are personalised or boilerplate. The principal is stretched, often the Responsible Manager as well, and there is no hour in the week that belongs to reading the back-catalogue. So the files sit unread, and the answer to whether your brokers' recommendations would stand up stays a matter of trust rather than record.
To be fair to your brokers, a thin file note is a prompt, not a verdict. A recommendation can be sound and the reasoning for it recorded poorly, and the point of looking is to ask the question and record the answer, not to assume the worst. But you cannot ask the question if no one is looking.
Why low complaint numbers are not the all-clear
The complaints side is the other half of the same test, and ASIC has made it a live focus. The standards for internal dispute resolution in Regulatory Guide 271 are enforceable, and ASIC has said it is prepared to enforce them through litigation. It treats internal dispute resolution as an early-warning system: the first sign of a wider problem often shows up in how a complaint was handled, or whether it was recorded as a complaint at all.
And complaint volumes are not the only signal it watches. Over the past five years ASIC has used its administrative powers on 17 occasions to remove or restrict mortgage brokers and brokerage firms. Broker-related complaints to AFCA remain low, which on the face of it is a good thing, but Kirkland was pointed that low numbers are not, on their own, evidence that a network is sound. A complaint that never gets logged as a complaint does not show up in the count.
The question most ACL holders cannot answer
When the report lands it will describe, in ASIC's own words, what good looks like. Most principals will read it, recognise the standard and agree with it. Agreeing with it is not the hard part.
Here is the hard part. Take your last 20 settled files. Could you show, on each one, that the reasons your broker recorded were specific to that client and not a template that could sit on any file in the drawer? Not whether you trust the broker who wrote them. Whether you could put the files in front of someone and let the files answer.
If you are confident you could, the review holds no surprises. If you are not sure, that uncertainty is the thing worth closing, before ASIC, an aggregator or a complaint closes it for you.