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While the majority of brokers feel prepared to comply with the BID legislation, many of them would like more support from aggregators and lenders.
According to new research from MyState Bank on mortgage brokers’ preparedness for the implementation of the best interests duty (BID) obilgation, more than two-thirds of brokers feel very prepared or prepared to comply with BID legislation.
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The survey also found that four in 10 brokers believe that the BID legislation would improve customer outcomes, while a further four in 10 believe that the implementation would increase broker market share.
However, despite the delay of implementation by six months, a small minority (one-tenth) reported feeling a little prepared or not prepared at all.
MyState’s research, compiled from a survey of the bank’s network of 346 brokers, also found that 80 per cent of brokers would like more support from aggregators and lenders to help them comply with the obligations of the BID legislation.
The majority of brokers believe this support should come in the form of digital verification tools to make it easier to collect customer documentation and details.
The bank’s new research was conducted in response to the Australian Securities and Investments Commission (ASIC) publishing the long-awaited guidance, Regulatory Guide 273, concerning the application of the best interests duty on mortgage brokers last week.
The guidance contains ASIC’s views on how mortgage brokers may comply with their obligations at “key stages” of the credit assistance process, and sets out specific expectations on how brokers can comply with the legislation. The corporate regulator released the draft regulatory guide on the BID legislation in February.
MyState Bank general manager, banking, Tony MacRae said ASIC’s guidance would provide further clarification for mortgage brokers so that they can comply with the BID legislation.
Commenting on the brokers’ need for more assistance from lenders and aggregators, Mr MacRae said: “As we move towards implementation of BID in January 2021, mortgage brokers are expecting lenders and aggregators to play an even more proactive role in providing them with the right tools and education necessary to navigate this legislation.
“As we adjust to new ways of working, we expect digital enablers will continue to be crucial to promote good record-keeping of customer conversations and ensure compliance.”
Following the release of the guidance, ASIC commissioner Sean Hughes sat down with The Adviser to discuss what brokers need to know about RG 273.
Tune in to The Adviser’s In Focus podcast, released this afternoon (30 June), to hear the full interview.
[Related: ASIC open to providing further BID guidance, if necessary]
