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Top tips for staying across your legal obligations

by Annie Kane13 minute read
Top tips for staying across your legal obligations

The heads of a lender, aggregator and brokerage have shared their top three tips for brokers looking to stay across their legal obligations and regulatory change.

On Tuesday (14 April), The Adviser hosted a live webinar on Regulation and the Best Interests Duty, in partnership with NAB and Connective.

NAB’s general manager of broker distribution, Steve Kane, joined Connective executive director Mark Haron and Mortgage Success broker and director Katrina Rowlands to outline how lenders, aggregators and brokers are working to ensure compliance with the regulation in this space and their top tips for preparing for change.

Bringing together leaders from the three pillars of the mortgage industry (brokers, aggregators and lenders), the webcast focused on how new rules – such as the incoming best interests duty – will impact the mortgage broking space this year and what brokers need to know to prepare.


While discussions are reportedly still being held to confirm whether government and regulators will hold the industry to the 1 July 2020 implementation date – given that ASIC is yet to release its final guidance on the new duty, associated training is yet to be delivered, and businesses have been dramatically impacted by the COVID-19 pandemic – the industry is still working under the assumption that the obligation will take hold from this date. 

The broker perspective

When asked what brokers can do to stay across their legal obligations and understand the regulation that is set to come in, Mortgage Success broker and director Katrina Rowlands offered the following three tips.

Read every piece of information that comes through

“Whether it be articles, whether it be guidance papers, take the time to read the full paper so you can gain a really good clean understanding of aspects and different avenues that people are seeing that is relevant to the BID,” she said. 

Ask more questions

“Whether it be of your aggregator, whether it be of your lender, whether it be of your client, whether it be your team, peers, anyone... Just keep asking and asking for clarity so you can create processes and formulate your own ways of ensuring you cover as many aspects as you can,” Ms Rowlands offered.

Document everything

“I’ve taken a task on [since] having my team working remotely… I’m calling for the last file they did and seeing if what they think they’re recording is what I will [actually] see if I’m remote from the transaction. That, in effect, is what an auditor would do (or a checker [from] APRA or ASIC). They would call for a file as a remote person and review exactly what was in the file, because that is all that will survive [of the process] and they’ll have a look at what you’re actually recording and documenting. 

“It’s a little bit horrifying, because you realise how many gaps are left. You assume conversations were held, you assume people hear and understand [but] it doesn’t make it to paper,” she outlined.

“So my three [tips]: Keep reading; keep asking more and more questions, and [keep] documentation to the maximum,” Ms Rowlands added.

The lender perspective

NAB’s general manager, broker distribution, Steve Kane, agreed with Ms Rowlands that brokers should “continue to research, read and understand the legislation, and where you don’t, seek guidance and ask questions”, adding that now was also an opportune time to review their business processes.

Review your processes

“This is an opportunity for brokers to review their processes in line with the changes that the legislative environment will bring,” Mr Kane said.

“Each broker has a different methodology of doing things in their office. One of the things we’ve noticed [as a lender, is that] you can go from one broker to another in a similar market, but they do things very differently. So here’s the opportunity to understand the documentation, understand your processes and how your processes are going to support you, as a broker, in meeting your best interests duty obligations,” he said.

Work with your aggregator 

Mr Kane also suggested that brokers lean on their aggregators “because they will be very interested and very supportive in making sure that you have all the tools necessary in relation to how you organize your business, helping you with business process re-engineering, [and] using the available technology”.

He added that he believed the “facilities and the tools that are available through the majority of the aggregators in the provision of the support services don’t get fully utilised today. 

“[So] use the opportunity to understand all of those and to make best use of them to ensure your business is watertight should the regulator come knocking,” Mr Kane said.

The aggregator perspective

Like Ms Rowlands and Mr Kane, Connective executive director Mark Haron echoed their sentiments while emphasising that reading materials and information provided, whether from industry media, aggregators and associations, was key.

“There’s a lot of information that’s provided into the industry, and I find it sometimes frustrating that brokers are obviously not reading any of the information or [they’re] asking questions that have been answered many, many times before,” he said.

“I know you’re busy, but this is too important. You’ve really got to take the time to understand it and read this information and stay up to date,” Mr Haron said.

The Connective director outlined that aggregators “understand [their] role is vitally important to enabling brokers meet this specific journey” as it was in their own interests to ensure that brokers are meeting the best interests duty, as it would impact their own licences.

Mr Haron added that Connective’s compliance team had held more than 50 group webinars and sessions, providing regular updates to broker members in the past year alone, concluding: “So, it’s important that you make use of every little bit of information you possibly can, and make sure you’re reading the information.”

You can find out more about the best interests duty and the regulatory space in The Adviser Live - Leadership series: Regulation and the Best Interests Duty webcast – available online now.

[Related: Calls for BID introduction to be delayed]

katrina rowlands mark haron steve kane ta
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