What the review is
It is a thematic review. ASIC looks across a sector, tests how firms are meeting an obligation, and then publishes what it saw. ASIC Commissioner Alan Kirkland described the approach in a speech to the Mortgage and Finance Association of Australia (MFAA) National Conference in Melbourne on 22 July 2026: ASIC uses these reviews to assess how well firms are complying with the law, and when it publishes its observations it uses them to show what is good and what is not so good.
The MFAA has told its members this is the first time ASIC has reviewed the best interests duty since it began in 2021. According to the MFAA's summary of 23 February 2026, the review began in mid-2025 with information requests sent to large aggregation groups, and it covers four areas:
- Documentation. How brokers record their recommendations, especially where the loan recommended is not the lowest cost product.
- Licensee monitoring. How aggregators and licensees supervise brokers and test that the duty is being met.
- Complaints. How complaints about the duty are handled through internal dispute resolution.
- Remuneration and conflicts. How conflicts of interest are managed.
At the MFAA's Looking Ahead event on 10 February 2026, ASIC senior executive leader Nathan Bourne said ASIC had been looking at brokers' lender product recommendations, and in particular the information supporting them, according to the MFAA's report of the session. The same report says ASIC considered reportable situations, reports of misconduct and external dispute resolution information, and asked aggregators for data on product recommendations, monitoring programs and complaints.
Timeline so far
| When | What happened | Source |
|---|---|---|
| 1 January 2021 | The best interests duty and conflict priority rule start for mortgage brokers | ASIC RG 273.4 |
| Mid-2025 | ASIC begins the review with information requests to large aggregation groups | MFAA, 23 February 2026 |
| 10 February 2026 | ASIC gives brokers its first public update at the MFAA's Looking Ahead event | MFAA |
| 22 July 2026 | Commissioner Alan Kirkland's speech, "The best interests duty: A blueprint for building trust". He says it is too early to talk about observations | ASIC |
| 22 July 2026 | In questions after the speech, Mr Kirkland says ASIC expects a report in the final quarter of the calendar year | The Adviser's report of the session |
| 6 October 2026 | No report published yet | ASIC newsroom, checked on this date |
What ASIC has said so far
In the July speech Mr Kirkland said: "We're not due to complete our mortgage broker review until later this year, so it's too early to talk about our observations." He then set out what ASIC expects to see. These are expectations. They are not findings.
Reasons that belong to this client
It's not enough just to document them. They have to be personalised and meaningful. If the reasons for a recommendation are boilerplate factors that could apply to anyone, then it will be hard to demonstrate that the recommendation was in that customer's best interests.
That passage was directed at licensees reviewing broker recommendations. "Competitive rate and suitable features" could sit on any file. A reason that names what this client said they needed, and how this loan delivers it, cannot.
A record of the options you explained
Mr Kirkland said doing the work well means "documenting the reasons for your recommendations - and explaining those to the customer", and added: "you should also record the steps you have taken to educate customers about the options available to them." He gave two examples of that education: explaining that the lowest interest rate does not automatically mean cheapest or best value, and explaining why a feature the customer asked for may not be in their best interests.
Advice, when the client asks for the wrong thing
ASIC's words were that acting in the customer's best interests "emphatically does not mean" simply taking orders when you know a product is not right for them or there is a better deal to be had. If a client arrives set on one lender, the file should show you still looked, and what you told them.
Complaints
ASIC said it analysed hundreds of complaints made to licensees about the best interests duty, looking at whether things were put right and how quickly. It also said there is always a danger that complaints are not identified as complaints, and that the standards in ASIC Regulatory Guide 271 are enforceable. See our guide to file notes and AFCA complaints.
See what a finished file note looks like.
Pick your line of work and we'll send a sample note written from a mocked call. No account, no card, and nothing from your own client files.
One sample note, plus the occasional CallNote update. Unsubscribe any time by replying. We never ask for your call recordings or client files.
The law the review is testing
The duty is in Part 3-5A of the National Consumer Credit Protection Act 2009 (NCCP Act). ASIC's guidance on it is Regulatory Guide 273, published in June 2020.
| Provision | Who it applies to | What it requires |
|---|---|---|
| NCCP Act s 158LA | A licensee who is a mortgage broker | Act in the best interests of the consumer in relation to the credit assistance. Section 158L applies this to credit assistance in relation to a credit contract |
| NCCP Act s 158LB | A licensee who is a mortgage broker | Where the licensee knows, or reasonably ought to know, of a conflict between the consumer's interests and its own or those of an associate or representative, give priority to the consumer's interests (the conflict priority rule) |
| NCCP Act s 158LE and s 158LF | A credit representative acting within its authority, where the representative or its licensee is a mortgage broker (s 158LD) | The same duty and the same priority rule. The licensee must take reasonable steps to ensure the credit representative complies (s 158LE(2), s 158LF(2)) |
| ASIC RG 273 | Guidance for all of the above | ASIC's view of how to comply, with worked examples. It is not a safe harbour (RG 273.13) |
Three points from RG 273 line up closely with what ASIC has been saying in 2026.
- Cost comes first, and a dearer loan needs evidence. RG 273.54 says a failure to consider cost and investigate the lowest cost options may suggest non-compliance, and that any recommendation of a higher cost loan needs to be supported by evidence of why it is in the consumer's best interests. RG 273.56 adds that the lowest interest rate is not always the lowest cost option, for example where an offset account saves the client more in interest.
- The client should understand the options. RG 273.93 says consumers should be presented with options and understand why those options were selected, why others were not presented, and why one was recommended.
- One-size-fits-all is a warning sign. RG 273.17 says the risk of non-compliance is substantially increased if a broker's processes typically lead to a one-size-fits-all outcome.
You cannot contract out of any of this. RG 273.14 says the obligations cannot be avoided by a notice or disclaimer signed by the consumer. For a full walk through, see RG 273 and the best interests duty explained.
What to have on file now
RG 273.21 says ASIC expects evidence of compliance to come predominantly from the broker's records. RG 273.165 lists what those records generally include. The checklist below combines that list with the points ASIC has stressed this year.
| On the file | Why it matters | Where it comes from |
|---|---|---|
| The client's priorities in their own words, ranked | Every reason you give later is tested against these | RG 273.91 |
| The shortlist you presented, with rate, fees and key features of each | Shows you investigated cost and gave real options | RG 273.54, RG 273.92 |
| What you explained about each option, and what the client said back | The record of educating the client that ASIC has asked for | RG 273.104(b), RG 273.165(f), Kirkland speech |
| Why the recommended loan suits this client over the others | The reason has to be personal to the client and make sense on their facts | RG 273.90, RG 273.165(g), Kirkland speech |
| If it is not the cheapest: the non-cost reason and the numbers behind it | A higher cost loan needs evidence | RG 273.54 to RG 273.57 |
| If you showed only one option or one lender: why | The client should know why the list is short | RG 273.93(b), RG 273.95 |
| Any conflict, and how the client's interests came first | Disclosure or consent alone does not satisfy the rule | s 158LB, RG 273.165(h) |
| What the client decided, including if they went against your recommendation | You should record the recommendation and the alternatives not chosen | RG 273.103 to RG 273.104 |
| Notes made at the time, plus a short summary that ties the file together | Notes written at the end are less reliable | RG 273.169, RG 273.170 |
You do not have to explain why you rejected every product on the market. RG 273.171 says distinguishing the type of product or feature is likely to be enough. Our best interests duty file note guide goes through each element in more depth, and the NCCP file note compliance checklist lets you score a note against it.
Worked example: options explained, and why this loan for this client
This fictional note covers a recommendation that is not the lowest rate on the shortlist. The clients, lenders and rates are invented.
- What the clients want
Priya and Daniel are buying their first home for $800,000 and borrowing $640,000, a loan-to-value ratio (LVR, the loan as a share of the property's value) of 80 per cent. They ranked their priorities in this order: keep their savings within reach because they plan to have a child in the next two years and Priya will drop to part-time work, keep the cost of the loan down, and be able to pay extra when Daniel's yearly bonus arrives. After settlement they will have about $45,000 in savings.
- Options presented
- Option 1, Lender A basic variable loan: 6.54 per cent, no annual fee, redraw but no offset account.
- Option 2, Lender B variable loan with an offset account: 6.69 per cent, $395 annual fee, unlimited extra repayments.
- Option 3, Lender C two-year fixed loan: 6.49 per cent, no offset account, extra repayments capped at $10,000 a year.
- What was explained
Explained that Option 3 has the lowest rate and Option 1 the lowest rate of the two variable loans. Explained how an offset account works: savings held in it reduce the balance interest is charged on, and the money can be taken out at any time. Explained that money paid into a loan and taken back by redraw is at the lender's discretion and can take longer to reach. Explained that a fixed loan can carry a break cost if they sell or refinance during the two years. Priya asked whether the lowest rate was simply the cheapest. Went through the numbers below with her.
- Recommendation and why
Recommended Option 2. It costs about $1,355 a year more than Option 1 before the offset is counted ($960 in extra interest on $640,000 plus the $395 fee). With $45,000 in the offset account it saves about $3,010 a year in interest, so the clients are about $1,650 a year better off than on Option 1 while that balance stays there. Told them the offset stops paying for itself if their savings fall below about $20,000. It keeps their savings available for the period Priya is on reduced income, which was their first priority, and it lets Daniel pay in his bonus without a cap.
- Why not the others
Option 1 is cheaper only if their savings sit outside the loan earning less than the loan rate, or are paid into the loan and relied on through redraw. Option 3 has the lowest rate but no offset, a cap on extra repayments, and a possible break cost. Daniel said they may upgrade within a few years if a second child arrives, so they did not want to be locked in.
- Conflicts
Checked commission on all three options. Upfront and trail rates are the same for Lenders A and B and slightly lower for Lender C. No related party or ownership link with any of the three lenders. Told the clients how the broker is paid.
- Client decision and next steps
- Priya and Daniel chose Option 2 on the call.
- Broker to email the comparison of the three options and the offset calculation today.
- Clients to send two recent payslips each and three months of bank statements by Friday 18 September 2026.
- Broker to review the offset balance with them at the 12-month check-in and raise Option 1 again if it has fallen below $20,000.
Boilerplate reasons and how to fix them
| Reason that could apply to anyone | The same reason, written for the client |
|---|---|
| Competitive rate and low fees | Lowest total cost of the three shortlisted loans over the first five years at the client's loan size, including the $395 annual fee |
| Client wanted an offset account | Client will hold about $45,000 in savings after settlement and needs it within reach while on parental leave. Offset saves about $3,010 a year in interest at that balance |
| Client preferred this lender | Client asked for their existing bank. Showed two cheaper options and the dollar difference. Client chose to stay because their business accounts are there. Recommendation was Option 1. Client's decision recorded |
| Meets requirements and objectives | Delete it and write which objective, and how |
If you run a brokerage or hold the licence
Licensee oversight is one of the areas under review. In the July speech ASIC said licensees should choose metrics suited to their business and monitor them regularly so that potential misconduct is found before harm spreads, and that reviewers of broker recommendations should take extra care that the reasons make sense for the specific client. RG 273.177 says the reasonable steps obligation is about preventing breaches, so sample settled files regularly, read the reasons first, and look closely at any file where the recommended loan was not the lowest cost on the shortlist.
Our mortgage broker compliance audit checklist covers what an aggregator file review usually asks for.
Where the conversation record comes from
Most of what ASIC is asking for happens out loud, on a call. RG 273.167 lists file notes, including records of conversations, among the accepted forms of record, and RG 273.169 favours notes made as you go.
This is where CallNote fits. If your calls already produce a transcript, through Aircall, Dialpad or Microsoft Teams, or a file you upload or paste, CallNote turns it into a file note under your own headings, such as options presented, what was explained and why this loan. It never records calls or stores call audio. You review the note and publish it. It is then sealed with a checksum and locked, and later changes are added as amendments. It has no native link to Mercury Nexus, MyCRM or Salestrekker, so the note goes across by copy and paste or as a PDF. It does not check serviceability, compare products or decide what is in a client's best interests. That part is yours. More on our mortgage brokers page and in AI note takers for mortgage brokers.
What we do not know yet
- What ASIC found. No observations have been published.
- The form of the output. The MFAA said in February 2026 that ASIC may report through a media release or a short-form report.
- The exact date. The only public guidance is Mr Kirkland's reported comment about the final quarter of 2026.
- Whether any enforcement action, guidance update or change to RG 273 will follow. ASIC has not said.
When the report is out we will update this page with what it says.
Common questions
Has ASIC released its best interests duty review report?
No. When we checked ASIC's newsroom on 6 October 2026, no report or findings had been published. ASIC Commissioner Alan Kirkland said on 22 July 2026 that it was too early to talk about observations, and The Adviser reported him saying in the question session that ASIC expects a report in the final quarter of the 2026 calendar year.
What is ASIC's best interests duty review looking at?
According to the MFAA, the review covers how brokers document recommendations, particularly where the loan is not the lowest cost product, how aggregators and licensees monitor brokers, how complaints about the duty are handled, and how remuneration and conflicts are managed. It began in mid-2025 and is ASIC's first review of the duty since it started on 1 January 2021.
What is the best interests duty for mortgage brokers?
Section 158LA of the National Consumer Credit Protection Act 2009 requires a licensee who is a mortgage broker to act in the best interests of the consumer in relation to credit assistance for a credit contract. Section 158LB requires the licensee to give priority to the consumer's interests where it knows, or ought reasonably to know, of a conflict. Sections 158LE and 158LF apply the same rules to credit representatives, and make the licensee take reasonable steps to ensure they comply. ASIC's guidance is Regulatory Guide 273.
Do I have to recommend the cheapest home loan?
No, but cost is a priority factor. ASIC RG 273.54 says any recommendation of a higher cost loan needs to be supported by evidence of why it is in the consumer's best interests. RG 273.56 recognises that the lowest interest rate is not always the lowest cost option, for example where an offset account saves the client more in interest than the rate difference costs.
What does ASIC mean by boilerplate reasons?
Reasons that could apply to any client. In a July 2026 speech ASIC Commissioner Alan Kirkland said reasons have to be personalised and meaningful, and that if they are boilerplate factors that could apply to anyone it will be hard to demonstrate the recommendation was in that customer's best interests. A reason should name what this client needed and how the recommended loan delivers it.
What records does RG 273 expect a broker to keep?
RG 273.165 says ASIC generally expects records that include the responsible lending assessment, the credit guide, information given to the lender, outcomes of applications, relevant conversations with the consumer, information showing you acted in their best interests including efforts to educate them, the options and recommendation you gave with reasons, and any conflict of interest and how you prioritised the consumer.