Code of Practice & Disputes Resolution Service

Responsibilities of the Finance Broker to the Client

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A Finance Broker, when acting on behalf of a Client in relation to a Finance Broking transaction will seek to:

General

1. Discharge its responsibilities and duties competently and with integrity and honesty.
2. Act in the best interest of the Client but in a manner consistent with the Finance Broker's appointment document and this Code.
3. Exercise reasonable care and skill.
4. Comply with its obligations to the Client, including:
1. Avoiding conflicts of interest.
2. If a conflict of interest occurs, disclosing that conflict as soon as is reasonably practicable and disclose the existence of any agency arrangements or other commercial relationship with any recommended Credit Provider, valuer, mortgage insurer, lawyer, financial planner, financial advisor, insurer or insurance broker that may be involved in a transaction where the Finance Broker is to receive a pecuniary benefit.
3. Disclose in writing prior to the Client accepting any Credit Facility the source of any fees, trailing commission, other remuneration or benefit to be received by the Finance Broker and in such detail as may be required by law in the lawful jurisdiction of both the Finance Broker and Client.
4. Disclose in writing prior to the Client accepting any Credit Facility, the payment of any fees, trailing commission, other remuneration or benefit to any referrer, subcontractor or third party where such third party gives advice relating to the proposed transaction or otherwise assists or induces the Client to enter into the transaction and in such detail as may be required by law in the lawful jurisdiction of both the Finance Broker and Client.
5. Advise the Client of their eligibility for any government subsidies or other assistance that the Finance Broker can reasonably be expected to be aware of relating to obtaining a Credit Facility or dealing with personal or financial hardship during the term of a Credit Facility.
6. Maintain the confidentiality of Client details and other information in accordance with the Privacy Act 1988 and its amendments during the term of the Finance Broker's appointment and after the conclusion of the appointment.
7. Comply with the provisions of the Trade Practices Act 1974, Corporations Act 2001, Australian Securities and Investments Commission Act 2001 and all state and territory Fair Trading Acts or Finance Broker specific legislation and any amendments thereto.
8. Maintain all records required by law and comply with all requirements for production of, access to, or copying of, such records as may be required by statute.
9. Provide such information as may be lawfully required by any regulatory or other authority.
10. Be familiar with the Code of Practice and Rules of any ADRS that the Finance Broker may be a member of and thereby be able to be assist Clients in understanding and enforcing their rights under such Codes and/or rules.
11. Promptly return to a Client any original documents provided for copying, or on demand by the Client provided that the Client has paid any outstanding amounts owing to the Finance Broker.
12. Unless contrary to any law, a Member may charge non-refundable upfront fees provided the Member first draws to the Client's attention in writing that obtaining a Credit Facility on behalf of the Client is improbable or unlikely.
13. Advise the Client of the need to arrange the discharge of any existing mortgage, other charge or encumbrance over the proposed security for a Credit Facility that is necessary to effect settlement and at such time as is reasonably required to avoid any delay in settlement of the proposed transaction.
14. Advise the Client and Credit Provider of any benefit the Finance Broker may receive as a result of the Client entering into any credit related general or life insurance contract as part of any service or referral provided by the Finance Broker in regard to any Credit Facility arranged by the Finance Broker.
15. Advise the Client of the need to provide the Credit Provider, their solicitor or valuer of any documentation or information that may be required to obtain approval of a Credit Facility, or to facilitate preparation of any loan documentation, including production of certificates of title or ownership, evidence of insurance in a form required by the Credit Provider and to do so in an expedient manner.
16. Advise the Client of the process of arranging any registered second mortgage or company charge and the need for the Client to first obtain the consent of the prior mortgagee or charge in a timely manner to avoid delays in settlement of any proposed transaction.
17. Advise the Client of the types of loan products that the Finance Broker can obtain for the Client, explain the differences between various types of loan products and inform the Client which Credit Providers the Finance Broker deals with.
18. Advise the Client on the process of arranging credit generally including the likely time-frames and problems that could be encountered throughout the process.

Credit Applications and Contracts

1. Assist the Client in understanding its contractual benefits and obligations with the Finance Broker and Credit Provider.
2. Maintain clearly written diary notes or provide written advice of reasons for any recommendations given to Clients and any variation subsequently sought by the Client or imposed by the Credit Provider. Any diary notes or written advice of reasons are to be kept by the Finance Broker in accordance with good business practice.
3. Make all reasonable enquiries of the Client as to their income, assets, actual and contingent liabilities, repayment history with other creditors or Credit Providers, details of any adverse credit or financial events and promptly convey such information, together with a fully completed credit application, to the Credit Provider in the form required.
4. Promptly advise the Client if a credit application is declined or consideration thereof by the Credit Provider is delayed or deferred pending the supply of further information required from the Finance Broker, Client or other party.
5. Promptly make available to the Client copies of any finance approval correspondence, indicative offers of finance, loan contracts or security documentation as may be required by the Credit Provider.
6. Take reasonable steps to obtain from the Credit Provider and promptly convey to the Client, relevant information and documents supplied by the Credit Provider.
7. Advise the Client in writing of the Credit Provider's fees and other charges, showing any fees charged by the Finance Broker separately, prior to the Client accepting an offer of finance from a Credit Provider.
8. Promptly deal with any variation in the Client's requirements and record such instructions, with reasons given, in writing.
9. Promptly advise the Client of any variation in the terms and conditions available from the selected Credit Provider that differ from those originally advised and retain a written record of such variations, with reasons given by the Credit Provider and the Clients reaction and subsequent instruction.
10. Where reasonably practicable, check the accuracy of documentation relating to a proposed Credit Facility supplied by the Credit Provider to the Client and ensure it is in accordance with the Clients recorded requirements.
11. (As permitted by privacy laws and consent held by the Finance Broker and provided that the Client has paid any outstanding amounts owing to the Finance Broker). Co-operating by promptly providing any information or assistance reasonably required by a valuer, lawyer, mortgage insurer or other party necessarily involved in the discharge of the Finance Brokers duties to the Client and/or Credit Provider.
12. When requested by, or previously arranged with, the Client or Credit Provider, providing reasonable assistance with any post settlement liaison between the Client and Credit Provider including communicating any permissible variations in the credit contract, renewal of the term or discharge of security.
13. Not knowingly be a party to or participate in any deliberate non-disclosure or misrepresentation of any facts pertaining to the Client, Credit Provider, the Credit Facility being arranged, and the circumstances of the transaction or the security being taken.
14. Assess the Client's ability to meet their obligations under a proposed Credit Facility in accordance with any Credit Facility affordability calculators supplied by a Credit Provider and advise the Credit Provider of any extenuating circumstances affecting the Client's ability to meet their proposed obligations to a Credit Provider.
15. Explain to Clients the possibility of notations being made on their credit record each time they apply for credit and take steps to avoid unnecessary notations on a Client's credit record.

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