Legislation passes to impose mortgage broker best interest duty

Royal-Commission/Josh-Frydenberg/mortgage-broker/

7 February 2020
| By Mike |
image
image image
expand image

The Royal Commission-based legislation changing mortgage broker commission arrangements and imposing a client best interest duty have passed the Parliament.

The Treasurer, Josh Frydenberg, said that the changes were contained in the Financial Sector Reform (Hayne Royal Commission Response – Protecting Consumers (2019 Measures) Bill 2019.

The legislation covers the Royal Commission recommendation that mortgage brokers be required to act in the best interests of consumers when providing consumer credit assistance.

As well, it also covers off the Royal Commissions recommended reforms to mortgage broker remuneration by requiring the value of upfront commissions to be linked to the amount drawn down by the borrowers instead of the loan amount, alongside the banning of campaign and volume-based commissions and payments and capping soft dollar benefits.

The changes bring the regulatory environment for mortgage brokers more broadly into line with those of financial advisers.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

5 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months ago

Commonwealth Bank has formally dropped to zero advisers following LGT Crestone’s acquisition of its advice arm – some six years on from the Hayne royal commission. ...

4 weeks ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

1 week 4 days ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

3 weeks ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
92.15 3 y p.a(%)
3