• Rob Haynes

Being Ahead of the Game

The Royal Commission into the Banking and Finance Industry was well publicised and we’ve seen some significant changes to bank behaviour since the Royal Commission ended.


Some of the changes have been positive. The banks are now much more aware that they cannot be purely profit driven.


Some of the changes have been less positive. It is now more difficult to get a loan, genuine borrowers are being made to jump through a lot of hoops to get a loan.


In July this year, another significant change is are coming.


From July, a Best Interests Duty is being introduced for Mortgage Brokers (not banks).


It might surprise some people that prior to this time, there has been no legal requirement for brokers to act in their client’s best interests (although with more than 60% of the home loan market, most brokers must have been doing the ‘right thing’).


ASIC are progressively releasing guidelines as to how the changes will affect brokers.


The primary areas that they are highlighting at the moment are:

- Understanding the customers current circumstances and any potential changes to circumstances. Making a loan recommendation that fits the potentially changing circumstances.

- Presenting a range of loan options, with a recommendation (and the basis for the recommendation)

- Making sure that the customers interests are placed in front of the interests of the broker

- Making sure that borrowers are educated on the loan features and the costs of the various features.


As previously mentioned, the Bests Interests Duty only applies to brokers, not banks. This is because the bank is only able to offer it’s own products. A bank employee is unable to tell a client that there is a better product ‘down the road’, therefore the Best Interests Duty does not apply (realistically it can never apply) to banks.


For us, there is nothing contentious in the Best Interests Duty. Our philosophy has always been to ensure that our clients have a loan that they understand, can afford and which is suitable for their current and longer-term needs.


In fact our tagline supports our philosophy and encapsulates what Best Interests Duty is trying to achieve. Our tagline is “Genuine Guidance with your Best Interests at Heart”.


We feel like we are already ahead of the game and we look forward to the formal introduction of this new legislation.

Proteger Financial Solutions

Home Loans and Business Finance Perth

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Proteger Financial Solutions is an Authorised Credit Representative Number 457263 of Your Local Finance Pty Ltd ACN 128 061 067 Australian Credit Licence Number 478761. We are accredited with the Finance Brokers Association of Australia Ltd and a member of the Credit & Investments Ombudsman.

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