The best interests duty, often shortened to BID, changed the bar for mortgage brokers. Before 2021 the test was "not unsuitable". Now you also have to act in each client's best interests, and be able to show it. RG273 is ASIC's guide on what "acting in the client's best interests" looks like and how ASIC will assess whether you got there.
The duty itself sits in Part 3-5A of the National Consumer Credit Protection Act. RG273 is the guidance layer on top of it. This article explains both in practical terms, and then gets to the part that matters day to day: the record you keep. General guidance only, not legal or compliance advice. Your licensee and aggregator will often expect more than the minimum, so check their policy too.
What RG273 and the best interests duty actually are
The best interests duty is an obligation to act in the consumer's best interests when you provide credit assistance in relation to a credit contract. It is an outcomes-based standard, not a checklist you can tick and walk away from. RG273 is the ASIC regulatory guide, published June 2020, that explains what ASIC looks for when it assesses whether you met the duty and how to reduce the risk of getting it wrong.
There is no safe harbour. You cannot satisfy the duty by disclosure alone, and you cannot get the client to sign it away. A form that says the client consented to a conflict does not discharge the duty. ASIC has been clear on this: the duty is about what you actually did, not what the paperwork says.
Who it applies to
The duty applies to mortgage brokers, and to the credit representatives and licensees who provide credit assistance through them. It came into effect on 1 January 2021.
It does not apply to loan officers employed directly by a bank or lender, and it may not apply where a party steps into the shoes of a lender. The point of the reform was to lift the standard for the intermediary the client trusts to shop the market for them. If you are a broker arranging finance for a consumer, it applies to you.
What "acting in the client's best interests" requires
RG273 frames the duty as a process. Gather the right information, work out what is genuinely in the client's interests, then present and recommend on that basis. In practice it comes down to a few things you can actually do and record.
- Gather enough information about the client and their situation to understand what they need. How much depends on the client, but it has to be enough to form a genuine view.
- Assess what credit assistance and which products would be in that client's best interests, based on what you gathered.
- Present the options in a way the client understands, including why you selected the options you did and why you recommended the one you recommended.
- Prioritise the client where there is a conflict between their interests and yours or a related party's. This is the conflict priority rule.
The record-keeping obligation: your file note is the evidence
Here is the part that turns the duty into daily work. ASIC expects brokers to keep good records of how they acted when providing credit assistance, so they can demonstrate compliance. That means records of the inquiries you made into the client's circumstances, and the consideration, investigation, and assessment of the products you recommended.
In other words, the duty is invisible unless you write it down. If a complaint, an audit, or an AFCA dispute lands two years from now, nobody can see the good conversation you had or the careful thinking you did. They can only see the file. A thin note that says "discussed options, recommended Lender X" does not show you acted in the client's best interests. A BID-ready note does.
What a BID-ready file note captures
A file note that supports the best interests duty needs to answer, in the client's specific situation, what they wanted, what you considered, and why your recommendation was in their interests. The table below maps each part of the duty to what your note should record.
| Part of the duty | What your note records |
|---|---|
| Client's needs and circumstances | Employment and income, dependants, existing debts, plans that affect the next few years, and anything that shapes what the client needs from the loan |
| Requirements and objectives | What the client actually wants and why, in their words: purpose, amount, features they care about (offset, fixed portion, redraw), term, and how they ranked priorities |
| Options considered | Which products and lenders you looked at, and which you set aside. Enough to show you genuinely searched, not just picked the easy one |
| Why this recommendation | The specific reasons this product is in the client's best interests over the alternatives: rate, features, serviceability, settlement timing, or a feature they needed |
| Conflicts and priority | Any conflict of interest or related-party relationship, and how you prioritised the client. If a cheaper option existed, why the recommendation was still in their interests |
| Instructions and next steps | What the client decided, what they instructed you to do, and the agreed actions |
Common failure points
- No record of options considered. The note shows the recommendation but nothing about what else was on the table, so there is no evidence you searched.
- Reasoning missing. "Recommended Lender X" with no "because". The recommendation is there, the best-interests logic is not.
- Relying on disclosure. Treating a signed conflict disclosure as if it discharges the duty. It does not.
- Thin needs capture. Vague objectives like "wants to refinance" instead of the specific, ranked priorities that drove the recommendation.
- Notes written late. A record reconstructed weeks later carries far less weight than a contemporaneous one written at or near the time of the call.
- Editable notes. A file that can be quietly rewritten later is worth less than one that is locked, with amendments added as dated entries.
How CallNote helps you document your RG273 obligations
CallNote never records your calls and never sits in on them. It receives the transcript your phone or meeting system already made - you paste it, forward it by email, upload a voice memo, or connect a phone system like Dialpad or Aircall - and drafts a structured file note from it in about two minutes.
For brokers, the note is built around the elements above: the client's needs and circumstances, their requirements and objectives, the options considered, the reasoning behind the recommendation, conflicts and priority, and next steps. CallNote pulls what the transcript actually contains into each section and flags where something is thin, so you can fill the gap before you lodge rather than discover it in an audit. It helps you document your RG273 and best interests duty obligations. It does not decide whether you met them - that judgement is yours.
You keep control of the wording, because CallNote uses your own house style and prompt, not a fixed form. The flow is Generate from the transcript, Review and correct on screen, then Lodge and Lock. Once locked, the note is timestamped, SHA-256 sealed, and append-only, so any later amendment is a dated entry rather than a silent rewrite. That is the contemporaneous, tamper-evident record a reviewer wants to see. Your data is stored in Australia (Sydney), encrypted, and never used to train AI models.
For the mechanics of a defensible note, see how to write a compliant NCCP file note, and for a comparison of the tools brokers use, our roundup of file note software for mortgage brokers.
Common questions
What is RG273?
RG273 is ASIC's regulatory guide on the mortgage broker best interests duty, published in June 2020. It explains what ASIC looks for when assessing whether a broker acted in the client's best interests when providing credit assistance, and what steps brokers can take to reduce the risk of non-compliance. The duty it explains sits in Part 3-5A of the National Consumer Credit Protection Act and applies from 1 January 2021.
Who does the best interests duty apply to?
It applies to mortgage brokers, and to the credit representatives and licensees who provide credit assistance through them. It does not apply to loan officers employed directly by a bank or lender. If you are a broker arranging finance for a consumer, it applies to you.
Can I satisfy the best interests duty just by disclosing a conflict?
No. There is no safe harbour and disclosure alone does not discharge the duty. Under the conflict priority rule, if there is a conflict between the client's interests and yours or a related party's, you must put the client first, and if you cannot resolve it in the client's favour you must not provide the credit assistance. Getting the client to consent does not fix it either.
What records do I need to keep to show I met the duty?
ASIC expects records of the inquiries you made into the client's circumstances and the consideration, investigation, and assessment of the products you recommended. In practice that means a file note capturing the client's needs and objectives, the options you considered, and the specific reasons your recommendation was in their best interests, written at or near the time of the call and kept as a locked, contemporaneous record.
Does CallNote decide whether I met the best interests duty?
No. CallNote helps you document your RG273 and best interests duty obligations by drafting a structured note from your call transcript and flagging where a section is thin. Whether you actually met the duty is a judgement for you and your licensee. CallNote never records your calls - it works from a transcript your phone or meeting system already produced.