The review examined 13 credit licensees across eight large aggregator groups, covering a substantial share of Australia’s mortgage broker representatives. ASIC said more than 80% of home loans are now arranged through mortgage brokers, which makes the quality of recommendations an important consumer issue. Seven of the eight aggregator groups reported that brokers did not recommend the cheapest loan option in more than one in five cases.

That finding does not mean the cheapest loan must always be selected. A higher-cost loan may be appropriate where it provides features or flexibility that are genuinely valuable to the borrower, such as an offset account, redraw access, a particular fixed-rate structure, lender policy fit or repayment flexibility. The issue ASIC highlighted is whether the file clearly explains why the higher-cost option delivers better value for that customer.

For households comparing personal or home finance, the practical lesson is to avoid treating the advertised interest rate as the only decision point. Borrowers can ask what alternatives were considered, what the estimated cost difference is, which fees are included, how comparison rates have been used, and whether particular features are essential or merely nice to have. Understanding how finance brokers work can also make it easier to distinguish between a helpful explanation and a recommendation that needs more detail.

The same discipline is useful for sole traders and SMEs, even though ASIC’s report focused on mortgage broking and consumer credit. Business lending can involve different obligations, security arrangements and pricing models, but the questions remain familiar: why this lender, why this structure, what happens if cash flow tightens, and what is the total cost over the term?

ASIC also noted concerns about complaints handling, including matters being delayed, missed or withdrawn without full investigation. That matters because a complaint process is only useful if borrowers know their concerns will be properly considered. Keeping written records of recommendations, reasons, product comparisons and questions asked can help if a borrower later needs to review a decision or raise a concern.

The broader message is not to distrust brokers or assume that lower cost is always better. It is to expect clarity. A strong loan recommendation should make the trade-offs visible, explain the value of features being paid for, and leave the borrower better informed before committing to a long-term financial obligation.