The Combined Industry Forum (CIF) has made recommendations that brokers should disclose specific information and data within their compliance disclosure documents. For credit representatives appointed and operating under Connective’s ACL, it is mandatory to use these updated documents and for ACL holders and their authorised credit representatives, we recommend the use of these documents.
The CIF recommends that you provide your customers with the following information:
- The list of residential lenders available via Connective’s panel and, of those residential lenders, which ones you hold accreditation with (in respect of the previous financial year).
- The number of residential lenders you had settled loans within the previous financial year.
- The top 6 lenders and the percentage (%) of your settled business in the previous financial year.
- The implementation and disclosure of the entertainment and hospitality register.
- Disclosure of tiered service arrangements (also known as broker clubs).
The information relates to settled loans from the previous financial year and will require updating on 1 July of each year.
Changes to the Credit Guide
The Credit Guide template now incorporates all the above recommendations. The data provided to you is only based on Connective’s panel of lenders. For any lenders used that are not on Connective’s panel, you will need to ensure that this data is added manually, as we can only provide you with the information held within Mercury.
If you have not been with your current broker business for a full financial year, the data we can provide you will only cover the period which you were with them. If the information is not available from your previous employer or business, then include a statement that you have not been with your current broker business for the full reporting period.
Data requirement 1 - List of lenders available to you via Connective and accreditations held
We will provide you with a table of Connective panel lenders for the previous financial year. Below is an illustrative example of what the table will look like.
The table of the available lenders will automatically populate if you are using the correct Credit Guide. If you cannot see the table on your Credit Guide, please speak to your BSM to check that version of the Credit Guide you are using is correct.
To update your accreditations, please read Managing-your-accreditations-in-Mercury-Nexus
Select each lender you are currently accredited with - this information will be populated into your Credit Guide.
If you have used lenders that are not on Connective’s panel, you can use a table like the one below to capture this information. You will also need to manually enter data for lenders who are no longer on Connective’s panel but who may have been during the reporting period.
Data Requirement 2 - Number of lenders you have settled loans within the previous financial year
This is the number of lenders you have used to settle loans in the previous financial year. This data is automatically populated into the Credit Guide, please see the illustrative example provided below.
Note: Manual change will be required where you have settled loans with lenders outside Connective's panel of lenders in the previous financial year. If you submit loans to or have agreements with lenders who are not on Connective’s panel you will need to manually enter this information. You will also need to manually enter data for lenders who are no longer on Connective’s panel but who may have been during the reporting period.
Data requirement 3 - Top 6 lenders and percentage (%) of loans settled for the previous financial year
This is your top 6 lenders and corresponding percentage (%) of loans settled in the previous financial year. This information is based on the amount settled with each lender.
This data is automatically populated in the Credit Guide, please see the illustrative example provided below.
Note: Manual change will be required where you have settled loans with lenders outside Connectives panel of lenders in the previous financial year. If you submit loans to or have agreements with lenders who are not on Connective’s panel you will need to manually enter this information. You will also need to manually enter data for lenders who are no longer on Connective’s panel but who may have been during the reporting period.
Disclosure 1 – Entertainment and Hospitality Register
The entertainment and hospitality register is to be held on file. A copy should be available and provided to your client on request.
We have disclosed this in the Credit Guide under the ‘Entertainment and Hospitality register’ section. This section now states ‘We hold and maintain an entertainment and hospitality register. A copy can be provided on request.’
- An entertainment and hospitality register must be maintained for all Loan Writers. An example template is provided below
- Records need to be retained for a minimum of 3 years.
- If you attend an event that has at least 80% educational content, then you do not need to record it in the register
- Not sure if the event contains at least 80% educational content? Please speak to the event organiser for confirmation
- All events, gifts or hospitality valued at $100 up to a maximum of $350 need to be recorded in the register
- All Loan Writers attending an event or who are in receipt of a gift or hospitality will need to record the details in their register.
What do you need to do if a client requests a copy of the register?
A copy of the register for the preceding 12 months from the date of the client’s request is to be provided to the client in the manner requested. This can be by email or mail.
A copy of the register is to be provided as soon as possible after the request has been made.
Disclosure 2 – Tiered Servicing
A tiered servicing disclosure is ONLY required if you have a tiered servicing arrangement with a lender.
What is a tiered service arrangement?
Tiered service arrangements, also known as ‘broker clubs’, are arrangements you (a broker) has with a lender where you are receiving some form of non-monetary benefit not available to all brokers accredited with that particular lender. These typically are in the form of preferential services to assist your clients better including, but not limited to, faster response times to applications, direct access to assessors and/or access to upfront valuations. Although the industry is moving away from determining which brokers receive access to these tiered service arrangements solely based on the volume of settlements to considering other quality metrics where volume is just one component, the CIF is of the view that access to such arrangements should be disclosed to your customers
The onus is on you to ensure that if you are part of such arrangements, they are fully disclosed in your Credit Guide and subsequent compliance documents.
If you are not part of a tiered service arrangement, then no action is required.
1. Preferential servicing arrangments - Credit Guide
We have added a new section to the credit guide called ‘Preferential service offerings and programs with the following disclosure;
‘I have access to tiered servicing programs through the credit providers listed below. These programs give you, as my customer access to preferential services. Access to these programs is not based solely on the volume of loans submitted and does not entitle me to any additional commission outside of what I will disclose to you if a loan is submitted to one of these lenders. It should be noted that these preferential services do not provide customer discounts.
If you hold preferential service agreements
The lenders you hold preferential service arrangements with need to be declared on the Credit Guide and can be updated in the Accreditations App. Updating the lenders in the Accreditations App will automatically add them to your Credit Guide.
To update your preferential service lenders, click Updating-your-preferential-service-lenders Guide