Powered by MOMENTUM MEDIA
the adviser logo
Broker

Lendi backs move to expand broker powers

by Charbel Kadib5 minute read
Lendi

The online broking platform has expressed support for a revision to ASIC’s responsible lending guidance that would enable brokers to provide product suggestions to clients prior to verification.

Appearing before the Australian Securities and Investments Commission (ASIC) in its second round of public hearings regarding a proposed update to its responsible lending guidance (RG 209), Lendi co-founder Martin Lam called for further clarification relating to what level of assistance a broker can provide to a consumer before verifying their financial position.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

Mr Lam acknowledged the need for verification prior to the recommendation and facilitation of a particular credit contract but highlighted the need for better guidance relating to what services a broker can offer to clients prior to verification.

“We see there being an asymmetry in those requirements between credit assistance providers and credit providers,” he said.

Advertisement
Advertisement

“Credit providers are able to provide additional approvals subject to verification, whereas credit assistance providers can’t.”

Mr Lam noted that in the current guidance, there is a reference to what requirements a credit assistance provider has to meet before providing a “suggestion” to a customer, which includes inquiring about their needs and objectives and their financial circumstances before verifying their financial position in order to make an assessment.

“What we’re looking for is further guidance as to what that ‘suggestion’ means,” he said.

“The plain English understanding of a ‘suggestion’ is a very low bar. It’s the comparison of one with another, saying that its better.”

The Lendi co-founder noted the benefits of enabling a broker to provide clients with product suggestions prior to verification, adding that the industry “should have the opportunity” to do so under RG 209. 

“In a digital age when consumers come online to look for information from us, wed like to be able to [tell] them that ‘based on the information youve provided us, [this] is what might be suitable for you’ or ‘this product is better than this’.

“[But] for us to be able to do that, wed have to complete all steps of inquiry and verification, whereas a credit provider does not necessarily have the same bars.”

He continued: “Were looking for further clarification between ‘suggestion’ and ‘recommendation’ and assisting a consumer into a credit product.”

ASIC’s second round of public hearings have now concluded, with the corporate regulator expected to publish its new guidance before the end of the calendar year.

[Related: Complainants ‘very unclear’ about broker duties]

lendi ta

Charbel Kadib

Charbel Kadib

AUTHOR

Charbel Kadib is the news editor on The Adviser and Mortgage Business.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

ABA finalists

Finalists for 2022 Australian Broking Awards revealed!

Run with the support of principal partner NAB, the Australian Broking Awards – which is now in its 12th year –...

READ MORE
Anthony Albanese new ta

Home owners in flood regions offered cash payments

Speaking at a press conference on Wednesday (6 July), Prime Minister Anthony Albanese confirmed that residents in the...

READ MORE
Sam Henley

Fifo invests further into BDM team

According to Fifo Capital (Fifo), Sam Henley joined the lender as its senior business development manager –...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more