ASIC has been running a high-profile review of mortgage broker conduct under the Best Interests Duty since late 2024. The review has produced a steady stream of press releases, industry consultation sessions, and enforcement noise about broker commission disclosure, complaints handling and audit practice. The 2026 enforcement priorities document leads with broker BID compliance. The media coverage of the broker channel in the mainstream press has been dominated by the ASIC framing.
The review will produce a final report sometime in late 2026. The report will recommend tightening of disclosure language, slightly stricter audit standards, and some enforcement against specific outlier brokers who were always going to be caught regardless. The MFAA and Aggregator Associations will write polite responses agreeing with most of the recommendations. The major banks will publicly support the report. Life will continue.
None of that is the story. The actual story is what the major banks have been doing while the ASIC camera is pointed at brokers. This is, by any reasonable read of the industry data, a deliberate squeeze on the broker channel by the institutions that are losing market share to it.
The market share reality the banks live with
Mortgage broker share of new residential mortgage originations passed 70 per cent in 2022. It passed 75 per cent in 2024. The MFAA reported 76.4 per cent for the March 2026 quarter. The trend is one-directional and has been for a decade.
The Big 4 banks have responded to this in two visible ways. First, they have built out their internal broker-channel businesses (mobile lenders, accredited broker teams, broker-friendly application portals) to reduce friction for the brokers writing volume to them. Second, they have invested heavily in their digital direct-to-consumer channels (CommBank app, Westpac Live, NAB Mobile, ANZ Plus) to give borrowers reasons to bypass the broker entirely.
Neither of those visible responses has stopped the share shift. The banks have responded with a third, less visible move: gradually tightening the commercial terms of the broker channel itself.
The four ways the squeeze actually shows up
In the past 18 months, while ASIC has been talking about broker BID, the major banks have done some combination of the following:
- Reduced or restructured upfront commission rates for new originations. The headline rate has stayed at the standard 0.65 per cent, but the calculation base has shifted (some banks now calculate on drawn balance rather than approved balance for some products, which trims the actual paid commission).
- Reduced or eliminated trail commissions in some product categories. Trail (the ongoing 0.15 per cent annual payment) was always part of the broker income model. Some bank products no longer pay trail at all on new originations.
- Lengthened claw-back periods for cancelled or refinanced loans. If a borrower refinances away within the claw-back period, the bank claws back the original commission from the broker. Banks have quietly pushed these periods longer.
- Tightened accreditation requirements for new brokers. New broker accreditations at the Big 4 now require more documentation, more training, and longer waiting periods than they did three years ago. The effect is to slow new entrants into the broker channel.
None of these moves are individually scandalous. They are all defensible internally as risk management or fair commercial alignment. Collectively they reduce broker income, increase broker friction with the major banks, and gradually make the broker channel less attractive to write Big 4 volume.
The pattern: regulator pressure as cover for commercial pressure
The ASIC review provides convenient cover for the commercial squeeze. Every time the banks tighten a term, they can credibly say "we are responding to ASIC's concerns about broker conduct" or "we are aligning our compliance framework with regulator expectations". The press release writes itself. The MFAA can object but cannot effectively push back because the banks are formally acting on regulator guidance.
This is not a conspiracy theory. Read any of the major bank investor day presentations from the past 18 months and the slides will discuss broker channel "discipline" and "alignment" as part of the cost-to-income management strategy. The investor framing is honest. The customer-facing framing is "compliance with regulator expectations". Both are true; the second one provides the political cover for the first.
Why this matters for borrowers
For now, broker share at 76 per cent means most Australian borrowers still access mortgages through the broker channel. For now, the broker channel still produces meaningfully more competitive outcomes than the direct-to-bank channel for most file types. The empirical evidence on broker channel outcomes (sharper rates, broader credit policy access, better service for complex files) is consistent and well-documented in industry data.
The medium-term concern is that if the Big 4 squeeze continues to compress broker economics, three things start to happen. First, broker volume gradually shifts away from Big 4 products towards non-bank alternatives (which generally pay broker channel reasonable terms and have been the structural beneficiary of major-bank squeeze for years). Second, broker headcount at the long-tail end of the industry (single-operator brokers who write modest annual volume) starts to thin out, reducing geographic and demographic coverage. Third, the Big 4 use the broker channel weakening as evidence that "consumers prefer the direct channel" and accelerate the in-house digital build-out.
For borrowers, the net practical effect is that the channel which currently delivers the most competitive outcomes (broker) gets economically squeezed by the channels which currently deliver less competitive outcomes (direct bank). The endgame is bank pricing power.
What you should actually do about it
Two things, neither of which require waiting for ASIC to publish its report.
First, use the broker channel while the economics still support genuine multi-lender comparison. The current 76 per cent broker share is the market signal that the channel works for most borrowers. The squeeze is real but the channel is still functional. If you have a mortgage to take out or refinance, this is the moment to use a broker on a wide panel rather than walk into a single Big 4 branch.
Second, ask your broker which lenders on their panel pay clean commission terms and which have been squeezing. A broker who is candid about the commercial structure is a broker who is also candid about which lender is the right fit for your file. A broker who refuses to discuss commercial structure is a broker who is selling to commission incentive rather than borrower outcome.
Disclosure (which is the point)
Your Finance Guide partners with Australian Lending and Investment Centre (ALG) ACL 505575 for broker matching. ALG receives commissions from lenders. We get paid for matches that proceed. This piece is editorial commentary on the commercial structure of the Australian mortgage market by people who are inside that commercial structure. We have a direct financial interest in the broker channel continuing to function commercially. We disclose this because that is the correct disclosure to make. The argument in the piece stands on the empirical evidence about broker channel outcomes and the public statements of major bank investor presentations; both can be verified independently of our financial interest.