Governance Duties Under an Australian Credit Licence (ACL) – Part 2

Reasonable Steps Standard:
The law requires “reasonable steps” to ensure compliance by reps. What is reasonable can depend on the size and nature of the business. A one-person sole trader with no other reps obviously doesn’t need a complex system – but they would need to self-monitor and perhaps have an external audit periodically. A large aggregator with hundreds of representatives will need a well-resourced compliance team. ASIC’s guidance indicates the nature, scale, and complexity of the business should dictate the intensity of compliance measures. So, assess your business: How many reps? How geographically dispersed? What’s the risk profile of your clients or products? Use those factors to design your supervision program. As a rule of thumb, more reps and more complex business = more formal and frequent oversight mechanisms.

Technology in Monitoring:
These days, many firms leverage technology for supervision. For example, some use loan processing platforms that have in-built compliance checks and flags. If a rep tries to submit an application without all required fields or documents, the system can block it or flag it for manager approval. Data analytics can identify outliers – say one representative consistently has debt-to-income ratios at the upper threshold, which might warrant a closer look for potential reckless lending. Additionally, maintaining an electronic compliance dashboard can help track open issues, audit completion rates, training status, etc., to ensure nothing slips through cracks.

Outsourcing and Third-Party Representatives:
If an ACL holder authorises third parties as credit representatives (common in aggregator models where one entity holds the ACL and many independent brokers operate under it), the licensee must be very diligent with oversight. This can include requiring those representatives to periodically attest compliance, running regular audits across the network, and even providing mandatory training. Some aggregators require their brokers to use approved software and processes to ensure standardization. It’s also prudent to conduct background checks and due diligence before taking on a new representative (checking their past conduct, verifying qualifications) – a sort of “onboarding supervision.” Remember, you can outsource some functions and have contractors, but as RG 205 puts it: you cannot outsource your responsibility. If an external representative breaches the law, ASIC will still come to the licensee asking why your supervision failed.

Global Perspective – Supervision Requirements:
The need to actively supervise is echoed abroad. In the United States, for instance, FINRA (the Financial Industry Regulatory Authority) has Rule 3110 (Supervision) which mandates that broker-dealer firms establish and maintain a system to supervise the activities of their associated persons that is reasonably designed to achieve compliance with laws and regulations. Firms must have written supervisory procedures, designate supervisors, review communications, inspect branch offices, and so on. FINRA frequently takes enforcement action against firms for “failure to supervise” when a broker’s misconduct (like selling unsuitable investments or, analogously, steering clients into inappropriate loans) was not prevented or detected by the firm’s oversight. Such enforcement often results in fines and sanctions for the firm and sometimes the managers.

Similarly, in the UK, under the FCA’s regime, there are principles and rules requiring firms to have effective systems and controls (SYSC rules) and to oversee their staff. The UK SMCR specifically assigns a Senior Manager Function for Compliance Oversight in many firms (the person in that role can be held accountable if the firm’s systems fail). Moreover, under SMCR’s Duty of Responsibility, if a breach occurs in an area of a Senior Manager’s oversight, that manager can be penalized if they didn’t take reasonable steps to prevent or stop the breach.

These global frameworks reinforce what ASIC expects: set up a proper system, diligently execute it, and hold supervisors accountable for doing their job.

Case Example: To illustrate the consequences of not supervising, consider a hypothetical scenario that mirrors real cases: A credit licensee has 10 loan brokers. One broker starts cutting corners – he fails to verify clients’ expenses properly and submits loans with false information to get approvals faster. The licensee’s management doesn’t catch it because they have no file review program. Eventually, a few borrowers default and complain that they were given loans they couldn’t afford. ASIC investigates and finds the licensee did not take reasonable steps to ensure compliance (no audits, no training refreshers, etc.). The outcome could be ASIC imposing an enforceable undertaking (where the firm must take remedial actions under ASIC’s oversight), or even suspending or cancelling the licence if the failures are grave. The rogue broker might be banned, but the firm’s reputation and licence are also on the line. All this could have been mitigated by a strong supervision system.

In summary, monitoring and supervision is how you turn paper compliance into real compliance. It’s about vigilance – “trust but verify” when it comes to your representatives doing the right thing. Effective supervision not only prevents breaches but can also improve business outcomes (through mentoring reps to improve quality of advice and service). Managers should document their supervisory activities and be able to demonstrate to ASIC, if asked, that “these are the reasonable steps we take to ensure our people follow the law.” When done well, supervision fosters a compliance-oriented team and minimizes the risk of nasty surprises.

Compliance Systems and Controls: Implementing Effective Governance

Beyond individual roles and training, a licensee must embed compliance into its business through robust systems and controls. Think of this as the framework or architecture that supports all the obligations and oversight discussed so far. ASIC expects ACL holders to have formal compliance arrangements – essentially a compliance management system – that is proportional to their business but effective in ensuring obligations are met. This section explores what a good compliance system looks like, aligning with ASIC guidelines and best practice frameworks (including international standards for compliance management).

Compliance Program and Plan
At the core, an ACL holder should develop a Compliance Program – a structured set of policies, procedures, and actions designed to achieve compliance with all licence obligations. A useful way to organise a compliance program is to follow a cycle such as Plan – Do – Check – Act (PDCA), a common approach in standards like ISO 37301 (the international standard for Compliance Management Systems). Key components include:

• Policies and Procedures: Start with clear documentation of policies addressing each obligation area:
• Code of Conduct/Ethics: A high-level policy expressing the firm’s commitment to integrity, client-centricity, and compliance with law. This sets the tone for the organisation’s culture.
• Credit Operations Procedure: Step-by-step procedures for how credit applications are processed, including checkpoints for compliance (e.g., verifying ID, doing serviceability calculations, providing required disclosures at each stage, etc.).
• Responsible Lending Policy: Detailing how the firm ensures compliance with responsible lending obligations (making reasonable inquiries, verifying financial information, assessing suitability of loans, and documenting the assessments).
• Conflict of Interest Policy: (to be detailed in the next section) Explaining how to identify, manage, and disclose conflicts within the business.
• Training and Competence Policy: Outlining how the firm maintains competence (CPD requirements, training schedules, etc., much of which we covered earlier).
• Monitoring and Supervision Procedure: (as discussed) explaining how representatives are supervised, by whom, and what records are kept.
• Incident/Breach Reporting Procedure: Steps for staff to report issues, how management will assess and escalate them, including criteria for when ASIC is notified of “reportable situations” under the law.
• Complaint Handling Procedure: How the internal dispute resolution process works – timeframes, responsibility, logging of complaints, and when to involve AFCA if unresolved.
• Risk Management Policy: If required (for non-APRA regulated, which most ACL holders are), describing how the firm identifies and manages key risks. This can be a simple risk register listing risks (e.g., risk of fraud by a client, risk of economic downturn affecting loan portfolio, compliance risk of breaches) and controls in place for each.
• Outsourcing Policy: If any functions are outsourced (say you use an external loan processing center or outsource compliance reviews), document how those providers are selected, what service standards are in place, and how you monitor their performance.
• Technology/Cybersecurity Policy: Since much of credit business is digital, having procedures to protect client data and system security falls under good governance (and legal obligations like privacy).

Each policy should assign ownership (who is responsible for executing it – by role/title) and be version-controlled and updated at least annually or when laws change.

• Compliance Plan: ASIC often refers to having a written plan that documents compliance arrangements. This can be a consolidated document (sometimes called a Compliance Manual or Plan) that summarizes all the above and lays out a calendar of compliance activities. For instance, the plan might include a compliance calendar for the year – listing key tasks and deadlines: “Quarterly compliance committee meetings in March/June/Sept/Dec, Annual Compliance Certificate due by a certain date, AFCA membership renewal by date X, Professional Indemnity insurance renewal by date Y, Annual training day in July,” etc. The plan makes it easier to ensure nothing is forgotten and demonstrates a systematic approach.
• Adequate Resourcing of Compliance Function: Even the best plan is useless if there aren’t people and resources to implement it. ASIC expects that the compliance function (which might be a dedicated person or just one of the RMs wearing a compliance hat) has enough time, authority, and budget to do its job. In practical terms, if you are a larger firm, having a Compliance Manager/Officer is wise – someone whose primary duty is to coordinate these compliance efforts. That person should have direct access to senior management and be listened to in decision-making. In smaller entities, the RM or director playing this role must consciously allocate time for compliance duties (not let them be perpetually deferred by day-to-day sales pressures). Adequate resources also include technology tools (like compliance monitoring software, incident databases, training platforms) and possibly external advice (some firms retain external compliance consultants or lawyers to periodically review their systems or provide updates on new requirements).
• Compliance Committee and Reporting: Establishing a Compliance Committee (even if informal) was recommended earlier, and we reiterate it here as a vital control. The committee (or at least periodic management meetings on compliance) should review compliance reports prepared by the Compliance Manager or RMs. Typical reports might cover: number of incidents in the period, results of any monitoring reviews completed, training activities done vs planned, any regulatory changes upcoming, status of key obligations (e.g., “are we on track to renew insurance?” “Did we submit all required reports to ASIC?”). Documenting these meetings (minutes) is crucial as it evidences that the firm is actively checking and improving its compliance posture. It also provides an audit trail if down the line ASIC queries something – you can show, for example, that when an issue was found, the committee discussed it and directed a fix.
• Internal Control Activities: Borrowing concepts from broader risk management, the compliance system should have internal controls at various points:
• Preventive controls: e.g., automated system validations to prevent non-compliant actions (like can’t proceed if certain fields blank, or interest rate outside allowed range), segregation of duties (the person approving a loan is not the same who prepared it, to add a check), requiring dual sign-off for exceptions.
• Detective controls: e.g., the audits and monitoring reviews we discussed, reconciliation checks (making sure data submitted to lenders matches internal records, to catch any tampering), review of complaints to identify any patterns of misconduct.
• Corrective controls: e.g., a protocol for promptly correcting errors (if a disclosure document was left out, immediately send it and note the file), and a disciplinary policy if staff deliberately flout rules.

Adaptability and Continuous Improvement:
Compliance systems should never be “set and forget.” They need continuous improvement. Solicit feedback from staff – they often know where processes might not be working or where front-line challenges are. If, for instance, representatives say a certain form is confusing and causing mistakes in completion, refine it. After any compliance incident, do a root cause analysis: why did this happen and what in our system failed to prevent or catch it? Then adjust the process or training accordingly. Additionally, keep an eye on ASIC’s focus areas. ASIC publishes enforcement outcomes and areas of concern; if ASIC is, say, cracking down on fraudulent documentation in loan applications, enhance your controls around verification of documents to ensure your firm isn’t exposed.

Documentation of Compliance Measures:
A recurring theme: document what you do. ASIC has explicitly noted that it’s difficult to show compliance if you haven’t documented your measures. That means keeping your compliance manual up to date, maintaining records of monitoring, keeping copies of committee minutes, etc. We will elaborate more on documentation later, but within the system itself, make sure there’s a paper (or electronic) trail for every compliance activity completed.

Use of External Frameworks and Standards:
Many ACL holders find value in benchmarking their compliance systems against external standards or frameworks. For example, the Australian Standard AS ISO 19600:2015 (now superseded by ISO 37301:2021) provided guidelines for compliance management systems. These standards echo much of what’s described above, emphasizing principles of good governance, proportionality, transparency, and accountability. They encourage:

• leadership commitment (tone at the top),
• compliance risk assessment,
• integrity in business conduct,
• communication and training on compliance,
• monitoring and measuring compliance performance,
• and continual improvement.

While pursuing formal ISO certification might be beyond the needs of a smaller licensee, being aware of these frameworks can ensure no major component is overlooked. For instance, ISO 37301 highlights the importance of whistleblowing systems – having a channel where staff (or even external parties) can report misconduct confidentially. Implementing a simple whistleblower policy (required by law for public companies, but a good idea for any financial firm) can bolster your compliance architecture by enabling early detection of issues that normal line management might miss.

Regulatory Reporting and Interaction:
An often under-appreciated part of compliance systems is managing regulatory interactions. ACL holders have ongoing reporting obligations: e.g., lodging an Annual Compliance Certificate to ASIC (where you attest each year that you have complied with your obligations or disclose any issues), submitting financial reports if required, and, as of the 2021 reforms, lodging breach reports for significant breaches or misconduct by representatives. A compliance calendar should track these deadlines to ensure timely submission. Additionally, if ASIC makes inquiries or requests (like a notice to produce documents, or a thematic review via a questionnaire), the firm’s system should be prepared to respond accurately and promptly. Good record-keeping greatly facilitates this.

Global Comparison – Compliance Systems:
In many jurisdictions, regulators require formal compliance programs. For example, the U.S. SEC’s Rule 206(4)-7 under the Investment Advisers Act requires registered investment advisory firms to adopt written compliance policies and procedures, review them at least annually, and appoint a Chief Compliance Officer to administer them. The SEC expects firms to tailor these programs to their business and has taken action against firms that had “paper programs” not implemented in practice. They even require an annual written report of the review’s findings to management. Similarly, FINRA’s rules (as mentioned, Rules 3110, 3120, 3130) create a comprehensive compliance structure: annual certification by the CEO of adequacy of controls, annual testing of supervisory procedures, and requiring designated compliance officers. In the UK, the SMCR regime requires documentation like a Responsibilities Map and Statements of Responsibilities for senior managers, which clarifies who is responsible for compliance in each area – an approach that ensures accountability is mapped out.

All these global practices reinforce the same idea: compliance must be systematized and actively managed, not left to chance. By establishing a solid compliance framework, Australian credit licensees not only meet ASIC’s expectations (and thus protect their licence) but also gain business benefits – efficiency, consistency, and trustworthiness in the eyes of clients and partners.

In the next section, we will zero in on one particular area that every compliance system must address: conflicts of interest. Given that conflicts can subtly undermine fair treatment of clients, regulators place special emphasis on identifying and managing them properly.

Managing Conflicts of Interest

Conflicts of interest are situations where personal or financial incentives could compromise one’s duty to clients. In financial services – including credit advice and lending – conflicts are common and must be carefully managed to ensure clients are not harmed. Under the ACL obligations, licensees must have arrangements to ensure clients are not disadvantaged by conflicts that may arise wholly or partly in relation to credit activities. For financial planners and credit advisers, being vigilant about conflicts is part of ethical practice and good governance.

What Constitutes a Conflict of Interest?
A conflict of interest occurs whenever an adviser or firm has a motive or interest that could diverge from the best interests of the client. Some typical examples in a credit context include:

• Commission-based remuneration: This is perhaps the biggest conflict area for mortgage and finance brokers. Brokers commonly receive commissions from lenders for loans they arrange – both upfront commissions and ongoing (trail) commissions. There is an inherent conflict: a broker might have an incentive to recommend a loan that pays a higher commission over one that pays less, even if the latter might be slightly better for the client. Similarly, an incentive might exist to encourage a larger loan than necessary (to increase the commission), or to refinance loans more often than needed. This doesn’t mean brokers act on these conflicts most do put clients first – but the potential exists.
• Affiliations and Ownership ties: If a credit adviser is associated with a lender or owns a stake in a credit provider, they may be conflicted in recommending that provider’s products. For instance, an aggregator might have “white label” products (their own branded loans funded by a particular lender) which give them higher margins – brokers might feel pressure to sell those. Or a financial planning firm might get referral fees for steering clients to an affiliated mortgage business.
• Campaigns and Competitions: Lenders sometimes run incentive campaigns (e.g., “broker of the quarter” rewards, volume bonuses if certain loan volumes are achieved). Such incentives can conflict with the duty to provide credit that is most appropriate for the customer’s needs, as they can unconsciously or consciously bias the broker’s recommendations.
• Conflicts in Credit Assistance vs. Credit Provision: Some firms both provide credit and give advice (e.g., a non-bank lender that also has agents advising clients). The firm’s interest is to write loans (as that’s how it earns money), which could conflict with the duty to only assist in loans that are not unsuitable for the customer. A similar conflict arises if an adviser has to choose between the firm’s own product or another lender’s product for the client.
• Personal relationships: If a representative has a close personal or family relationship with a client or with a third-party service provider (like an appraiser, lawyer, etc.), it could impair objectivity. For example, using a property valuer who is a friend might raise questions if valuations consistently come in favorably.

Conflict Management Obligations and Strategies:
The goal is not to eliminate all conflicts (some are structural in the industry), but to manage them such that clients do not suffer disadvantage. Key strategies include:

• Identify and Document Conflicts: The licensee should conduct a conflicts identification exercise – think through your business model and list where conflicts might arise. Maintain a Conflicts of Interest Register that logs each identified conflict, who it affects, its potential impact, and what measures are in place to manage it. This register should be a living document, updated when new conflicts emerge (e.g., if you start a new incentive scheme or partner with a new referral source). Holley Nethercote’s compliance tips (recall earlier) suggest updating the conflicts register regularly and even discussing with industry peers to identify less obvious conflicts. This proactive approach ensures no blind spots.
• Avoidance for High-Risk Conflicts: If a conflict is too severe to manage, the best strategy can be to avoid it entirely. For example, after the Royal Commission, volume-based bonus commissions for brokers were largely phased out in Australia due to their misalignment with customer interests. A licensee might decide not to participate in certain lender campaigns, or to ban gifts above a token amount from any lenders to its staff. By removing those temptations, you align more closely with client interests.
• Disclosure to Clients: Transparency is a fundamental tool. If a conflict exists, clients should be clearly informed. Credit licensees in Australia must provide a Credit Guide and (if offering credit assistance) a Quote and a Proposal Disclosure Document (Credit Proposal). These documents can carry disclosures about fees, commissions, and associations. For instance, a broker’s Credit Guide should disclose that they receive commissions from lenders and can even include the range or the fact that different lenders pay different amounts. The proposal document given when presenting a recommended loan often details the exact commission for that loan. While disclosure alone doesn’t solve a conflict, it at least ensures the client is aware of potential influences. It’s important that disclosures are meaningful – clearly written (avoiding boilerplate jargon) and provided early enough for the client to digest.
• Informed Consent (when applicable): In some cases, it might be appropriate to obtain the client’s consent after disclosing a conflict. For example, if you will earn a fee from a referral to a mortgage insurer or a debt consolidation service, tell the client and get their acknowledgment that they’re okay with that arrangement. Note: Consent doesn’t absolve you if the action is not in their best interests, but it is part of being transparent.
• Implement Chinese Walls or Separation: If your firm has different divisions (say lending vs. advising), consider structural separation to minimize conflicts. For instance, if a financial planning arm might otherwise direct clients to your credit arm even when not ideal, ensure that the financial planners are still obliged to consider a panel of lenders and not exclusively your in-house option. Some firms physically and IT-separate departments handling conflicting functions, and limit information flow, so that each acts independently in the client’s best interest.
• Decline to Act in certain scenarios: If a conflict can’t be managed to a client’s advantage, you may have to decline or end a client engagement. For example, if a client needs a type of credit that you can’t arrange without a conflict influencing (like a loan from a lender you have strong ties to, but maybe that lender isn’t the best for the client), it may be better to refer them elsewhere. Always putting the client’s interests first – even if it means losing some business – ultimately upholds your duty and reputation.

Conflicts and Best Interests Duty:
It’s worth noting that as of early 2021, mortgage brokers have a legal best interests duty in Australia. This duty, introduced via the Financial Sector Reform (Hayne Royal Commission Response) Act 2020, elevates the standard of conduct: brokers must act in the best interests of consumers and, in case of conflict between the consumer’s interests and the broker’s interests (or those of a related party), give priority to the consumer’s interests. This is a statutory hammer against conflicts of interest. In practice, complying with the best interests duty means, for example, if lender A pays a higher commission than lender B, but lender B’s loan is better for the client’s needs, the broker must prioritize the client and recommend lender B’s product. Brokers should document why the chosen loan is in the client’s best interest, which provides evidence that they weren’t swayed by conflicts.

Even outside of mortgage broking, other credit licensees should emulate this approach – always align recommendations with the client’s objectives and requirements, regardless of your own incentives. Many financial planners under AFSL have operated under a best interest duty for advice on financial products and have learned to manage conflicts by shifting to client-centric fee models or robust advice justification. Similar professionalism is expected in credit advice.

Monitoring and Reviewing Conflicts Management:
As part of your compliance system, regularly review how conflicts are being managed:

• Check that disclosures are being given (e.g., perform audits of client files to see if the Credit Proposal document with commission info was provided).
• Review the conflicts register to see if any new conflicts emerged, or if any mitigation needs strengthening. For instance, if a new incentive program led to a noticeable shift in product recommendations, that’s a red flag to address.
• Seek client feedback occasionally – if clients indicate they felt pressured toward a particular product or didn’t understand fee arrangements, that signals a conflict handling issue.
• The compliance committee or leadership should get reports on conflicts (maybe an annual conflicts review) to ensure visibility at the top.

Global Perspective – Conflict of Interest Standards:
Managing conflicts is universally recognized in financial regulation. The UK’s FCA has specific rules on conflicts of interest (for example, in the Investment sector, firms must have a conflicts of interest policy and take all reasonable steps to identify and manage conflicts, disclosing them to clients where necessary). The concept of fiduciary duty in many jurisdictions (like in the US for investment advisers) fundamentally is about avoiding conflicts or, where unavoidable, disclosing and managing them in the client’s favor. Even outside regulatory requirements, professional codes emphasize conflicts: the CFA Institute Code, for example, instructs members to make full and fair disclosure of all matters that could impair independence or objectivity and to subordinate their own interests to clients’.

For financial planners in Australia reading this, note that the FASEA Code of Ethics (Standard 3) explicitly states: “You must not advise, refer or act in any other manner where you have a conflict of interest or duty.” While that applies to financial product advice under an AFSL, the spirit of it is instructive – ideally avoid conflicts or manage them so effectively that the client’s interest is unquestionably dominant.

In short, conflict management is about aligning your interests with your clients’ interests as much as possible, and where they diverge, being upfront and fair such that the client does not come out worse. By doing so, you protect clients and also protect your own reputation and business in the long run – trust is the currency of advisory businesses, and nothing erodes trust faster than clients feeling you might not be acting solely for their benefit.

With conflict of interest strategies in place, another critical governance task remains: ensuring everything is properly documented and evidenced. We turn to that next, as good documentation practices tie together all aspects of compliance, from training to supervision to conflict management.

Documenting Processes and Evidence of Compliance

There is a saying in compliance and audit circles: “If it isn’t documented, it didn’t happen.” While this might sound extreme, it reflects the reality that regulators and courts give little weight to informal assurances; they rely on records and written evidence. For ACL holders, maintaining thorough documentation of processes and compliance activities is not only a good practice – it’s often a direct requirement (for example, having a documented compliance plan, providing certain written disclosures, etc.). Good documentation serves multiple purposes: it guides staff in what to do, it preserves institutional knowledge, and it demonstrates to regulators (or internal reviewers) that you are meeting obligations.

Policy and Procedure Documentation:
As covered in the compliance systems section, every key process should be documented. But beyond just having the documents, ensure they are accessible and kept current:

• Maintain a central repository (could be a shared drive, intranet, or even a physical manual) where the latest version of all policies and procedures can be found. Old, outdated procedures can be dangerous if staff accidentally follow them, so implement version control and archive superseded versions properly.
• Write procedures in plain language and include checklists or templates if possible. For instance, a procedure for loan file completion might include a checklist of all forms and checks needed – staff can then use it to self-review their files.
• Include regulatory references in your documentation so it’s clear why something is required. E.g., note that “as per s47(1)(h) of NCCP Act, we must have internal dispute resolution – see IDR procedure below.” This not only educates staff on the legal impetus but also helps if documents are reviewed by regulators to show you’ve linked practice to law.

Client File Documentation:
For each client or credit transaction, maintain a comprehensive file (physical, electronic, or both) that captures the entire customer journey and advice process. This typically includes:

• Needs analysis or fact-find documents detailing the client’s financial situation, requirements, and objectives.
• Credit quotes provided and the Credit Guide (with version given and date).
• Records of inquiries made into the client’s requirements and capacity (e.g., income verification documents, expense statements, credit checks).
• The assessment of unsuitability or serviceability (show how you concluded the loan was not unsuitable – calculations, buffers used, etc.).
• Documented product comparisons or why a particular lender/product was chosen over alternatives (especially important in demonstrating you acted in the client’s best interest).
• The Credit Proposal Disclosure document outlining key features of the recommended loan and commissions – ideally signed by the client to acknowledge receipt.
• Any conflict of interest disclosures or consents if applicable (like a form where client acknowledges you receive commission).
• File notes of any discussions or advice given (date-stamped). For instance, if over the phone you discussed why a fixed rate vs variable rate, note it down or send a follow-up email to the client summarizing it (which becomes part of the record).
• Copies of all correspondence with the client (emails, letters) and third parties related to the application (like conditional approvals, etc.).
• Copies of final loan offer documents and, if you assisted at loan closing, evidence that you went through the key terms with the client.
• Any client complaints or issues raised during the process and how they were resolved.

Keeping such thorough files is crucial. It allows you to demonstrate compliance with responsible lending obligations and advice quality. If later a client complains or ASIC inquires, you can show exactly what transpired. With increasing digitization, many firms use CRM (Customer Relationship Management) systems or loan processing platforms that store all this information systematically. Ensure your staff know the importance of record-keeping and have a habit of writing detailed file notes – it can feel tedious, but it’s invaluable when memories fade or in contentious situations.