MFAA Warns Referrer Reforms Could Catch Brokers in the Net

Treasury is consulting on tighter lead generation rules following two fund collapses — the MFAA wants legitimate broker referrals kept out of the firing line.

When your accountant refers you to a mortgage broker, or a solicitor mentions a finance contact during a property settlement, that introduction is subject to far more regulatory oversight than many Australians realise. And now Treasury is consulting on tighter rules for the broader lead generation industry — prompting Australia's peak mortgage broking body to step in with a clear message: don't catch legitimate broker referrals in the same net.

The Mortgage and Finance Association of Australia (MFAA) has lodged a formal submission to Treasury as part of a consultation on lead generation practices, urging the government to draw a sharp distinction between harmful lead generation and the legitimate professional referrals that connect Australians to mortgage brokers every day.

Why Treasury Is Consulting on Lead Generation

The review was triggered by the collapse of the Shield Master Fund and the First Guardian Master Fund — two investment products that caused significant consumer losses.

[The Adviser](https://www.theadviser.com.au/compliance/48507-mfaa-calls-for-careful-targeting-in-any-referrer-reforms) reported that investors were allegedly contacted by lead generators after responding to social media advertisements or using online superannuation tools marketed as "health check", "find my lost super", or "compare my super" tools. Those consumers were then referred to financial advisers, who allegedly guided them into switching existing super into a choice fund or self-managed superannuation fund (SMSF) to invest in the funds that later collapsed.

Treasury identified that the alleged conduct involved a chain of interconnected entities spanning lead generators, referrers, and advisers — making it difficult to pin accountability at any single point. The consultation paper outlined a range of reform options: enhancing accountability for the conduct of lead generators, extending anti-hawking requirements, targeting remuneration structures that may incentivise poor conduct, and intervening earlier in advertising and marketing practices.

The government has said it will consider feedback from the consultation to determine where the regulatory framework needs strengthening, with the outcomes of ongoing regulator enforcement and litigation also expected to inform the final policy shape.

Why the MFAA Is Concerned — and What It Means for Borrowers

The MFAA told Treasury it supports reforms targeting "high-pressure, product-driven" lead generation — the kind that allegedly drove consumers toward those failed funds. But it warned that reforms drafted too broadly risk creating "unintended consequences" for legitimate broker referral relationships that already operate within a strict legal framework.

In the mortgage context, referrals typically flow from trusted professional relationships — accountants, solicitors, and real estate agents working within tightly governed arrangements. The MFAA noted that under the National Consumer Credit Protection Act 2009 (NCCP Act), the rules around referrals are already strict: referrers cannot provide credit advice or influence product choice, must disclose any referral benefits, and must obtain consumer consent. Crucially, if a referrer moves beyond that limited role, licensing obligations are triggered under the Act.

"Referral arrangements in mortgage broking commonly arise through existing professional relationships between brokers and trusted advisers such as accountants and solicitors, rather than through cold-calling, consumer data harvesting or mass-market lead generation models," the MFAA's submission stated, as reported by The Adviser.

The body's core concern: broad measures such as new licensing requirements or bans on unlicensed communications could inadvertently sweep up low-risk, already-compliant referral arrangements alongside the harmful practices they are intended to address.

The MFAA's Five Recommendations to Treasury

The MFAA put five specific recommendations on the table:

1. Legitimate business-to-business referral arrangements should be treated differently from high-pressure lead generation models. 2. Broad measures — such as licensing requirements or bans on unlicensed communications — could unintentionally capture low-risk referral activity already operating appropriately within the credit sector. 3. Any increase in licensee responsibility should reflect the actual level of control or influence the licensee has over the activity. 4. Remuneration reforms should focus on arrangements that create product bias or lead to poor consumer outcomes. 5. Reforms should remain focused on harmful practices: consumer steering, cold-calling, and mass-market lead generation models.

The underlying logic is clear: existing credit law already draws a line between a legitimate professional referral and regulated credit assistance. New reforms should target the gaps in that framework, not disrupt what is already working.

What This Means for Borrowers Seeking a Broker

For anyone navigating the home loan market, this consultation matters. If reforms are drawn too broadly, they could make it harder — or more cumbersome — for trusted professionals to refer clients to mortgage brokers. That would reduce borrowers' access to tailored lending advice at exactly the moments they need it most: buying a first home, refinancing, or purchasing an investment property.

The flip side is worth noting too: the consultation shows that Treasury and regulators are closely examining the full chain of parties who connect consumers to financial products. That scrutiny is good news for borrowers who want confidence that the advice chain they rely on is properly regulated.

If you are exploring your home loan options, you can get started independently through the [first home buyer hub](/home-loans/first-home-buyer) or compare refinance options directly at [refinance home loans](/home-loans/refinance). If you are working with a broker through a referral, it is worth asking upfront about any referral arrangements and whether they have been disclosed — as the regulations require.

The MFAA's submission signals that the broking industry is actively engaged in shaping the outcome of this consultation, with a clear focus on protecting the referral structures that genuinely serve borrower interests.