ASIC Found 6.9% of Best-Interests Complaints Resolved Same Day Against 48.7% of All Others. The Five-Day Fix You Never Logged Still Had to Be Recorded

Most of the coverage of ASIC’s Report 840 went where you would expect. Seven of the eight aggregator groups reviewed reported that brokers did not recommend the cheapest loan option in more than 20% of cases, and the industry spent the day explaining — correctly — that the cheapest loan is not always the right loan.

That is one half of the report. The other half is about what happens when a client is unhappy, and it is the half with the sharper operational edge for anyone running a broking business.

REP 840, released on 13 October, is titled Mortgage brokers: Review of best interests duty and complaints handling practices. ASIC reviewed 13 credit licensees making up eight large aggregator groups — collectively responsible for approximately two-thirds of mortgage broker representatives in Australia — examining both the duty itself and the internal dispute resolution obligations that sit alongside it. It reviewed more than 7,000 documents, sampled 1,600 loan recommendations, and pulled complaint register extracts comprising more than 400 best-interests complaints from March 2023 to May 2025.

The finding that should get your attention is not a percentage. It is a line about licensee policy documents. ASIC observed guidance suggesting that complaints received by credit representatives and resolved within five days did not need to be recorded and reported, and said the practice “is inconsistent with RG 271.179, which says that licensees must record all complaints that they receive.”

The five-day shortcut is not a shortcut

This one is worth separating out, because the confusion behind it is understandable.

RG 271 — ASIC’s internal dispute resolution guide — does contain a five-business-day provision. RG 271.71, an enforceable paragraph, says a firm does not need to provide a written IDR response if it closes the complaint by the end of the fifth business day after receipt, because it has either resolved the complaint to the complainant’s satisfaction or given them an explanation or apology where it can take no further action.

What that provision switches off is the formal written response. What it does not switch off is the record. RG 271.179, also enforceable, says firms must record all complaints that they receive, and must have an effective recording system that lets them track the progress of each one. REP 840 puts the two together in a single sentence: “While some complaints resolved within five days do not require a formal IDR response, all complaints must still be recorded and reported.”

And a complaint that never reaches your licensee cannot be recorded by your licensee. That is the mechanism ASIC was describing when it found that IDR complaints about mortgage brokers are being underreported, both by credit representatives to licensees and by licensees to ASIC.

Best-interests complaints are a slow burn

The resolution data is where the report stops being a paperwork problem and becomes a management one.

Across the licensees reviewed, best-interests complaints made up around 7.5% of the total number of IDR complaints they reported to ASIC. A small share — but they behave nothing like the rest of the queue.

Only 6.9% of best-interests complaints were resolved the same day, against 48.7% of everything else. Most — 62.1% — took between six and 30 days, against 24.1% of other complaints. At the long tail, 2.7% ran past 91 days, against 0.3% of other complaints.

“Our review found complaints being missed, withdrawn without being fully investigated, or delayed. When complaints are not handled properly, confidence in the complaints process can be undermined.”

ASIC Commissioner Alan Kirkland, media release 26-240MR, 13 October 2026

The practical reading is not complicated. A complaint about a rate or a fee is a fact question somebody can close on the phone. A complaint about whether the recommendation was in the client’s best interests is a judgement question that needs the file, the shortlist, the recorded reasoning and usually the broker’s own recollection — and it cannot be closed quickly if the reasoning was never written down. That is the thread connecting the two halves of REP 840: thin file notes do not only create a best-interests exposure, they create a complaints-handling exposure, because they make the complaint unanswerable inside the timeframe.

Nobody was checking

Then there is this: none of the licensees had conducted any assurance process in the two years before the review to identify complaints that may have been missed.

During the review, two licensees surveyed their credit representatives. One of them turned up a range of unreported complaints that had been resolved within five business days. ASIC called that a modest improvement, and noted that a voluntary survey of representatives does not carry the same rigour and reliability as a dedicated assurance process.

Which left AFCA doing the detecting. ASIC saw multiple examples of complaints made to representatives that were not reported to the licensee in a timely manner — weeks or months, in some cases — and cases where the licensee only learned of a complaint when AFCA referred it back. It also noted that licensees were not always proactive in asking, when AFCA referred a complaint they had no IDR record of, whether a complaint had gone to a representative and never been passed on.

For scale: external dispute resolution complaints about mortgage brokers sit at around 5.4% of all home loan complaints AFCA considers, and AFCA reports just under 10% of those relate to best-interests duty obligations. The numbers are low, which is part of why nobody built the assurance process.

Who handles the complaint

Four of the eight licensees allowed their credit representatives to attempt to resolve a complaint within five business days, referring it to the complaints team only if that failed. The other four required all complaints to be referred to them.

ASIC was direct about which worked better: complaints handled centrally by licensees were managed better than complaints handled by credit representatives. It gave three reasons — improved transparency and consistency, access to expertise and advice from dedicated complaints staff, and more objective assessment by a person not directly involved in the circumstances giving rise to the complaint.

That third reason is the uncomfortable one, and it is not an accusation of bad faith. If a client complains that your recommendation was not in their best interests, you are the least well-placed person in the business to assess it fairly.

The report also sets out the information problem from the licensee’s side. Licensees handling complaints directly often did not have direct access to what they needed and relied on brokers and complainants to provide it. ASIC observed licensees asking representatives multiple times before receiving the information, which cut into the time available to respond, and said issues arose when brokers disengaged from the process altogether. Licensees told ASIC they had rights they could exercise to obtain documents from uncooperative brokers — and ASIC “saw no examples of this.” Where licensees ran centralised file management systems, that dependency largely disappeared, which matters most when the broker is no longer a representative of the licensee.

What ASIC found in the responses themselves

Three findings about the responses are worth knowing, because they attach to enforceable paragraphs rather than better practice.

Complaints treated as withdrawn

A small number of complaints were treated as withdrawn because the complainant did not provide requested information, and were never fully investigated. ASIC’s position is that unless the licensee has explicit confirmation from the complainant that the complaint has been withdrawn, it should still issue an IDR response based on the information available.

AFCA escalation rights

ASIC observed IDR responses that failed to tell complainants of their right to escalate to AFCA and failed to give AFCA’s contact details and the reasons for rejecting or partially rejecting the complaint. RG 271.53 is an enforceable paragraph requiring all three: the outcome, the right to take the complaint to AFCA, and AFCA’s contact details.

ASIC pointed licensees to the Federal Court’s decision in ASIC v Telstra Super Pty Ltd [2026] FCA 527, where Justice Neskovcin held at paragraph 189 that the requirements of RG 271.53 and RG 271.66 are mandatory, with no implied exception to the requirement to tell a complainant of their right to complain to AFCA and to give AFCA’s contact details — and at paragraph 208 that the complainant must be told of that right regardless of whether AFCA had jurisdiction. ASIC also said licensees must not disengage from the complaints process simply because they believe a complaint falls outside AFCA’s jurisdiction.

Timeframes

RG 271.56 requires an IDR response no later than 30 calendar days after receipt for standard complaints, subject to the exceptions in the guide. ASIC found some licensees did not always comply, and in a small number of cases no final response was provided at all. It also warned against leaning on the RG 271.65(b) exception for circumstances beyond the licensee’s control where the delay is really the licensee’s own lack of action, or where the outcome is already known and only the process has become drawn out.

Money and staffing

On compensation, the eight licensees split. Five always paid the complainant directly and then recouped the funds from the credit representative, through an insurance claim or by withholding commission; one generally paid first unless the amount was significant. The remaining two would in some cases wait on the professional indemnity insurance claim before paying — which in one case produced a 12-week delay between the complainant accepting an offer and being paid. ASIC called that poor practice and contrary to RG 271.165, which requires resolution outcomes to be implemented in a timely manner. That licensee has since changed its practice.

There is a commercial read for brokers in the split: under a licensee that pays the client first and recovers after, the recovery route runs through your professional indemnity excess or your commission.

On resourcing, four licensees had only one or two designated complaints handling officers, and only two of those four had contingencies to cover leave or increased workload. ASIC said those four generally dealt with complaints fairly and effectively within the maximum timeframe — but described one case where the dedicated officer went on leave, support staff could not properly handle an IDR complaint, and the representative told the licensee they felt unsupported and unsure of their role. RG 271.143 requires staffing sufficient to deal with complaints fairly and effectively within maximum IDR timeframes, including resourcing for intermittent spikes.

What clients actually complain about

Table 1 of the report is the most immediately useful page in it, because it is a list of the things that generate complaints in this channel. ASIC grouped more than 400 complaints into these themes:

• The loan recommended — a loan that was ultimately declined by the proposed lender, a loan the consumer was ineligible for, or a loan the broker was unable to apply for because they lacked accreditation.
• Failure to act on instructions — the client missing out on a requested rate lock, fixed rate, offset account or interest-only repayments; delays in application or settlement that hit the client financially or caused them to miss out on a property purchase.
• Poor communication — brokers not explaining or disclosing relevant information; clients having to constantly chase the broker to find out what was happening or to make sure required actions were followed up.
• Miscalculation errors — errors in the funds required for settlement or disbursed under the loan, and errors in repayment amounts after settlement.
• Cashbacks — not receiving an expected cashback because the client was ineligible, or receiving less than expected.
• Unexpected fees and charges — annual fees and risk fees on new loans, and break costs on a refinance.

Consumers also complained about scams, fraud, privacy concerns, breaches of confidentiality and credit report inquiries.

Read that list as a pre-settlement checklist and most of it disappears. Four of the six themes are set at the point of recommendation or application and only surface at settlement: whether you are accredited to lodge it, whether the client is eligible, whether the features they specifically asked for made it onto the application, and whether the cashback and the fee structure are what they were told.

What the industry said

The industry response ran mostly to the cost findings rather than the complaints findings.

“Price absolutely matters. Consumers should have confidence that their broker has considered the available options and can clearly explain why a particular loan is in their best interests. At the same time, the lowest-cost loan is not necessarily the right loan for every borrower.”

Anja Pannek, chief executive, MFAA, as reported by The Adviser

FBAA chief executive Leo Gagic likewise told The Adviser that competitive pricing matters and brokers will always consider it, but that every customer’s circumstances differ.

Complaints did feature in the aggregator responses. Lendi Group co-founder and chief executive Sebastian Watkins told The Adviser the group would give its Aussie and Lendi broker network detailed guidance on the findings and build them into ongoing training, “reinforcing our expectations for customer-specific recommendations, documented reasoning and prompt referral of all complaints to our dedicated complaints team.” LMG executive director and chief executive Ewen Stafford encouraged referral to LMG’s complaints team, and AFG is assessing the findings against its documentation and complaints practices, The Adviser reported.

Translated for brokers under those licences: expect the self-resolution pathway to narrow, and expect the referral expectation to be restated.

What to review this week

Five things, none of which take long.

1. Get your licensee’s complaints policy in front of you. Two questions: does it let you attempt resolution first, and does it require you to log and notify the complaint anyway? REP 840 found policy documents that implied the answer to the second was no. If yours reads that way, raise it rather than rely on it.
2. Decide where a complaint gets recorded in your own systems. Not the licensee’s — yours. A CRM field, a note category, anything consistently searchable. RG 271.180 contemplates that a firm receiving few complaints might reasonably use a spreadsheet.
3. Notify immediately, rather than after you have tried to fix it. The two can run in parallel. The delays ASIC described — weeks or months — are what turn a manageable complaint into an AFCA referral your licensee hears about from AFCA.
4. Check that your file notes would survive a complaint, not just an audit. The test is narrower than it sounds. If a client said in six months that the recommendation was not in their interests, would the recorded reasoning answer them?
5. Ask who pays, and when. If a complaint results in compensation, does your licensee pay the client and recover from you, or wait on the professional indemnity claim? Both models exist among the eight groups reviewed.

Where this lands

REP 840 does not say the broker channel has a complaints crisis. Volumes are low, external dispute resolution volumes are lower, and ASIC found the licensees generally had processes designed to support compliance with their legal obligations. What it says is narrower and harder to dismiss: the channel has a visibility problem. Complaints are raised at the broker’s desk, which is where clients naturally raise them, and a proportion never make it into a record. You cannot audit what was never written down — and ASIC’s own detection in this review often ran through AFCA, the one point in the chain where a missed complaint becomes unmissable.

ASIC said all mortgage broker licensees should use the findings to assess whether they need to change their own practices, and the eight groups reviewed covered only around two-thirds of representatives. Expect those groups to push changes down to their networks over the coming months, through policy updates and training rather than announcements. The brokers who come out of that well are the ones already treating a client’s expression of dissatisfaction as something that gets logged, not just something that gets fixed.

Sources: ASIC Report 840 Mortgage brokers: Review of best interests duty and complaints handling practices (released 13 October 2026); ASIC media release 26-240MR; ASIC Regulatory Guide 271 Internal dispute resolution; ASIC Regulatory Guide 273 Mortgage brokers: Best interests duty; ASIC v Telstra Super Pty Ltd [2026] FCA 527 as cited in REP 840; industry reaction as reported by The Adviser, 14 October 2026.