The Loan Market Way - Step 6: Approval Moment + Stay in Touch
Annual Check In and Potential Changes to Loans
Loan Market recommends you stay in touch with your client(s) and review their circumstances to ensure their loan remains competitive and suited to their needs. When reviewing your client's circumstances, the Best Interests Duty will apply to any credit assistance you provide at that time. In addition, you must not suggest they remain in a credit contract without considering whether this would be in their best interests.
It’s mandatory that you notify your clients when their fixed or interest only rate is due to expire. This can be done via the Stay in Touch program. All brokers are automatically opted in to these emails however you can opt out in MyCRM if you already have a process in place and can provide evidence of such.
Separately, if you’ve opted in to the annual check-in email, this will be sent automatically to your clients to advise that it may be in their best interests to review their lending situation.
Home Loan Health Check vs Re-pricing
As per RG273, Best Interests Duty will not apply if you’re not providing credit assistance and simply re-pricing an existing loan on behalf of your client(s). However, if you were to recommend that your client(s) remain in a loan that you previously helped them obtain, Best Interests Duty will apply.
Home Loan Health Check
According to RG273.118, if you choose to review your client’s circumstances, or are contacted by a client you previously assisted, then Best Interests Duty will apply to any credit assistance you provide at that time. You must not suggest that a client remain in their existing credit contract without considering whether this would be in their best interests.
For example, a client that you assisted in getting their home loan contacts you and asks if refinancing would be appropriate given they have a goal to repay their loan quickly. You discuss their objectives and financial situation, assess the market and determine that their objectives would best be met by their current loan. You make this recommendation and document it. Best Interests Duty applies in this scenario and you would need to be satisfied that suggesting your client remains in their existing loan is informed by their objectives and circumstances.
When re-pricing your client’s loan with their current credit provider, Best Interests Duty will not apply, providing that you do not provide any credit assistance such as increasing their loan limit or making a recommendation for them to remain in their existing contract. You should always make it clear to your client that you have not made any form of recommendation. You can do this by sending the Email Template for Re-pricing to your clients as a confirmation of the loan being re-priced. This can be located in the Important Documents section in MyCRM. If you don’t use this email template, you should ensure you have another process in place to communicate to your clients that you have not made any form of recommendation when re-pricing their loan.
Loan Market recommends you capture notes within MyCRM whenever interacting with your client(s), including for re-pricing. This will act as a record of the interaction and prove you have acted in your client’s best interests.
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