Understanding the regulations & compliance requirements for mortgage brokers.
(And how Purple Circle helps you stay on track)
Becoming a mortgage broker in Australia offers flexibility, autonomy, and rewarding career potential — but it also comes with a serious responsibility: compliance.
Whether you are brand new to the industry or already qualified, it’s important to understand the regulatory environment and your obligations as a broker. The mortgage industry is tightly regulated to protect consumers, ensure ethical lending practices, and maintain trust in the financial system.
At Purple Circle, we help our brokers navigate this complex space with clarity and confidence, so you can focus on building your business while staying fully compliant.
Why compliance matters in mortgage broking
Mortgage brokers are at the front line of consumer lending. You’re helping clients make one of the biggest financial decisions of their lives — buying a home or investment property. As such, the industry is governed by laws designed to protect consumers and ensure brokers act in their best interests.
Failing to meet compliance obligations can result in serious consequences, including:
- Loss of accreditation with lenders
- Breaches of licensing conditions
- Regulatory penalties or fines
- Reputational damage and lost client trust
Key compliance requirements for mortgage brokers
1. Holding the right licence
To operate legally, you must either hold an Australian Credit Licence (ACL) issued by ASIC, or be a Credit Representative of an ACL holder (such as Purple Circle). Most new brokers choose to operate under an aggregator’s licence — which gives them the protection and structure they need while they build experience.
2. Responsible lending obligations
Under the National Consumer Credit Protection Act (NCCP Act), brokers must:
- Verify the client’s financial situation
- Make reasonable inquiries about their requirements and objectives
- Ensure any loan recommended is not unsuitable for the client
These obligations are part of what’s called “responsible lending conduct”, and they apply to every deal.
3. Best Interests Duty (BID)
Introduced in 2021, BID requires brokers to:
- Act in the best interests of the client (not the lender)
- Prioritise the client’s interests when presenting loan options
- Clearly document the reasons behind recommendations
This duty is unique to mortgage brokers (bank staff aren’t required to meet it), and it’s a major reason consumers are choosing brokers in growing numbers.
4. Record keeping and documentation
Good record-keeping not only supports compliance but protects you in the event of a complaint or audit. You must keep thorough records of:
- Preliminary assessments
- Client conversations and disclosures
- Supporting documents (e.g. payslips, ID, credit reports)
- Loan comparisons and recommendations
5. Ongoing training and CPD
To maintain your accreditation, brokers must complete annual Continuing Professional Development (CPD) — typically at least 20 hours of approved training each year. This ensures you stay up to date with policy changes, product updates, market trends, and regulatory shifts.
How Purple Circle helps you stay compliant
Compliance doesn’t have to be overwhelming. Here’s how we support our brokers:
- Operate under our ACL: As a Credit Representative of Purple Circle’s licence, you get the protection of a strong compliance framework without the stress of running it yourself.
- Automated compliance workflows: Our digital tools and CRM platforms ensure compliance checkpoints are built into your process — from client discovery to settlement. You’ll never miss a step.
- Best Interests Duty support: We help you meet your BID obligations with training, loan comparison tools, and templates to clearly document why your recommendations are right for your client.
- Mentoring & advice: Our in-house team is here to review files, answer questions, and support you whenever needed. You’re never left to figure it out on your own.
- Regular CPD and industry training: Stay ahead of your education requirements with our structured training, CPD opportunities, and regular knowledge sessions from industry experts.
Our philosophy: Compliance is not a burden, it’s your advantage.
We believe that good compliance isn’t about ticking boxes — it’s about building trust, professionalism, and long-term success. When your clients know they’re in safe hands — and your business is protected — everything works better.
Join an aggregator that makes compliance simple.
We’re not just here to help you get started — we’re here to help you grow a business that’s compliant, sustainable, and respected. If you’re considering a career in mortgage broking, or looking for better support from your current aggregator, we’d love to chat.
Contact us to learn more.