Conflict of Interest

A conflict of interest (COI) happens when your personal interests (or those of your company or a third party) could affect the recommends or service you give to a customer.

Examples of COI:

• Recommending a loan by your aggregator

• If you or (your company) are involved in more than one part of the loan process (and could benefit financially from both) e.g you are the Accountant and the Broker, or your company is the Real Estate and the Broker;

• Commissions Payable - higher commissions for the loan recommendation

• You recommend a product that benefits you more than the customer.

You must:

• Identify any conflicts of interest

• Avoid or control them where possible.

• Disclose them clearly to the customer if they can’t be avoided.

If there is a conflict of interests when providing credit assistance, you are required to give priority to the consumer’s interests. You must not prioritise your own interests or the interests of credit providers or third parties

This Conflict Priority Rule was introduced with BID. It means if there’s a COI, you must put the customer’s interests first—ahead of your own, your employer’s, or any third party.

You would demonstrate compliance with this by:

• Matching product features to their needs, objectives and goals

• Ensuring your SOCA comments explain why the recommendation is in their best interests and how it aligns with their needs, objectives and priorities

• Providing a range of options for comparison

• Letting the client choose the product (as long as it’s suitable)

• Disclose and record the conflict in the SOCA