Best Interests Duty and Your Ad Copy

Key takeaways

• BID has applied to mortgage brokers under the NCCP Act since 1 January 2021.
• Advertising is not exempt - a claim that pre-commits your recommendation is the problem.
• "Best rate", "guaranteed approval" and "all lenders" are the three highest-risk claims.
• Your licensee's marketing approval process exists for this. Use it before publishing.

What does best interests duty require?

The duty, introduced into the NCCP Act following the Financial Services Royal Commission and in force since 1 January 2021, requires a mortgage broker to act in the consumer's best interests when providing credit assistance, and to prioritise the consumer's interests where a conflict arises.

It is an outcomes-based obligation rather than a checklist. ASIC's guidance in RG 273 makes clear that it is about the substance of what you recommended and why, judged against the consumer's circumstances.

Crucially, it applies to the recommendation - which means anything that pre-commits the recommendation before you have met the consumer is in tension with it.

Which advertising claims create risk?

The pattern is consistent: a claim is risky when it promises an outcome you cannot know yet, or when it implies your recommendation is determined by something other than the client's circumstances.

The safer framings share a property: they describe your process, which you control, rather than an outcome, which you do not.

How do the advertising rules interact with BID?

They stack. Your marketing must satisfy the general prohibition on misleading or deceptive conduct under the Australian Consumer Law and ASIC's advertising guidance in RG 234, and separately it must not undermine your ability to comply with BID.

Comparison rate obligations are the trap most often missed: advertise a rate for a credit product and you generally must display the comparison rate with equal prominence and state the assumptions. That applies to a social media post exactly as it applies to a billboard.

Practically, run every piece through your licensee or aggregator's marketing approval before it goes live. They carry the licence, they have seen the claim before, and pre-approval is far cheaper than a correction after a complaint.

Frequently asked questions

When did best interests duty start for mortgage brokers?

It commenced on 1 January 2021 under the NCCP Act, following the Financial Services Royal Commission. ASIC Regulatory Guide 273 sets out how ASIC administers it.

Can I advertise that I find the best rate?

It is a high-risk claim. It is difficult to substantiate, and it implies rate is the criterion when best interests requires you to weigh fees, features, structure and suitability. Describe your comparison process rather than promising an outcome.

Do I have to show a comparison rate in a social media post?

If the post advertises an interest rate for a credit product, comparison rate obligations generally apply regardless of the medium, including the required prominence and assumptions. The simplest way to avoid the issue is not to quote rates in social posts.

Does best interests duty apply to my website content too?

Website content is advertising and is subject to misleading conduct and advertising rules. Best interests duty applies to the credit assistance itself, but content that pre-commits your recommendation makes complying with the duty harder, so treat the two together.

Related reading

• NCCP Marketing Rules: What Brokers Can and Cannot Claim
• Comparison Rate: What It Includes and What It Hides
• Asking Clients for Google Reviews

Sources

• Mortgage brokers: Best interests duty (RG 273) — ASIC
• Advertising financial products and services (RG 234) — ASIC
• National Consumer Credit Protection Act 2009 — Commonwealth of Australia