MFAA calls on ASIC for clearer broker guidelines in regulatory guide

What is ASIC concerned about in broking?

In it, ASIC puts forward several examples of its concerns regarding how brokers, lenders, and financial planners advertise their services or lending products.

For example, it outlined that it had obtained Federal Court orders against a mortgage broker for contravening the ASIC Act, alleging they misled consumers by using a calculator to claim they could pay off debt sooner without disclosing that such savings required significant additional repayments.

Another concern raised was about brokers advertising that their services will result in a consumer becoming “debt-free”, when they are actually consolidating debt or restructuring repayments for existing loans.

A third was about brokerage using the term ‘100 per cent success rate’, which it said could be construed as meaning that credit would be provided to all applicants (regardless of responsible lending obligations).

However, the MFAA's Naveen Ahluwalia, the association's executive for policy and legal, flagged in the submission that there were a number of areas where the current drafting could lead to consumer confusion or misrepresent the broking profession. It put forward nine recommendations to the regulator for consideration.

Better reflecting what a broker does

One of the primary concerns raised by the MFAA involved a specific example in the draft guidance, which suggests a broker generally only considers one or two main lenders.

The ASIC draft guidance reads: “A mortgage broker may have access to loans from a number of lenders. However, in practice, the mortgage broker generally only considers one or two main lenders when making a recommendation to a client. In this case, it may be misleading if the mortgage broker advertises that ‘a wide range of lenders is available’.”

The MFAA said this contradicts the statutory best interests duty that requires brokers to assess multiple options.

“Stating that a broker ‘generally only considers one or two main lenders’ does not reflect standard broker practice and does not align with the expectations set out in ASIC’s BID guidance of what constitutes appropriate conduct under the duty,” the MFAA stated in its submission.

The association recommended that ASIC update the example to reflect that brokers draw from a broad panel of lenders to meet their regulatory obligations.

Recognising the rise of short-form marketing, the MFAA also requested a “good practice checklist” for social media tiles and Google ads.

The association noted that small brokerages often struggle to fit complex qualifications into tight character limits. It suggested ASIC provide minimum acceptable wording for common claims, such as: “We’ll compare lenders for you” or “We may help you find a better deal.”

The ‘best’ v ‘best interests’ distinction

While ASIC generally views terms like “the best loan” as misleading because they imply a guaranteed outcome, the MFAA said that brokers must be allowed to reference their legal duty.

“References to ‘acting in your best interests’ reflect a clear and well-established legal obligation that applies to mortgage brokers. Where used to describe this statutory duty, and not to promote a particular product as objectively superior, such language is not misleading,” the MFAA stated.

Differentiating mortgage and finance brokers

The MFAA also called for explicit protection of the terms “mortgage broker” and “finance broker” in advertising. The association wants ASIC to confirm that these titles should only be used by those appropriately authorised under the National Credit Act.

“Clear guidance confirming that such terminology should only be used where a person is appropriately authorised to engage in credit activities would help prevent misuse by unlicensed or improperly authorised operators,” the submission noted.

This includes ensuring that support staff or administrators are not presented as brokers in digital biographies or website team pages.

Clarifying liability for third-party calculators

Furthermore, the MFAA sought clarity on the use of third-party calculators, given that many brokers use tools provided by aggregators or lenders that are embedded in their websites.

The association said that brokers should not be held responsible for the underlying assumptions of these tools, provided they do not relabel them or overstate the results.

Other recommendations put forward by the association include clarity on several technical aspects of credit marketing:

• Fee transparency: Asking ASIC to explicitly state that when brokers advertise lender rates, they must ensure the comparison rate is current and includes mandatory warnings. They also urged ASIC to clarify that brokers should “avoid re-framing lender fee structures (e.g. ‘no annual fee’) in a way that understates overall costs.”

• Case studies: The MFAA asked for worked examples on how to use case studies safely. They noted these are acceptable provided “they are factually accurate and not cherry-picked to give a misleading impression.”

• Comparison sites: The submission asked for clearer rules for “Find a Broker” tools and comparison sites, specifically requesting that any “paid featured positions or advertisements” be clearly labelled, so consumers aren’t misled about why a certain broker or lender is appearing first.

• Green loans: The association said that brokers should not be required to independently verify or substantiate lender-designed sustainability claims.

The MFAA concluded its submission by requesting a reasonable transition period to allow broker businesses to update their marketing materials once the final guide is released.

The MFAA is now putting mortgage and finance brokers on notice to review their digital footprints and advertising compliance, and has provided a guide on its broker portal that includes specific guidance for brokers on advertising and marketing. This guide, available in the Broker Toolbox, provides practical examples of how educational content can unintentionally cross the line into unlicensed financial product advice.

Speaking of the guides, MFAA CEO Anja Pannek commented: “We know the use of social platforms is an important element of how brokers engage and attract clients. Consumers are also increasingly using social platforms to educate themselves.

“The guide recognises how marketing and ‘educational’ content, particularly on social media, can stray into misleading conduct or unlicensed financial product advice. This guide provides practical, broker-relevant examples aligned with ASIC’s expectations, helping brokers manage compliance risk while continuing to engage with consumers.”

A crackdown on unlicensed advice

The MFAA’s push for clearer advertising boundaries arrives as ASIC continues a significant crackdown on “finfluencer” behaviour.

The regulator has expressed growing concern that social media posts and articles, often lacking proper licensing or balanced disclosures, may be crossing the line into providing unlicensed financial advice.

It comes amid growing concerns about speculative marketing, conflicted conduct, and unlicensed financial advice emerging in the property investment space.

The Property Investors Council of Australia (PICA), a not-for-profit association representing property investors, has warned that a growing number of mortgage brokers were using “speculative marketing” and opening themselves up to conflicted conduct and potential unlicensed financial advice.

[Related: Warning issued over rise in unlicensed advice]