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Beyond the Handshake

Structuring Legally Compliant and High-Performance Referral Agreements

Referrals aren't just a bonus; they are the engine of the Australian mortgage industry. Yet, many brokers operate on informal understandings that expose them to significant regulatory risk. It’s time to formalize.

Referrals: The Core Driver

Source: Industry Analysis (Existing Clients & Partners)

Compliance Warning

Why Informal Deals Fail

Reg 9AB(6) Risks

Failure to disclose financial benefits in writing before acting creates immediate regulatory exposure.

Privacy Breaches

Sharing client data without formal consent mechanisms violates Australian Privacy Principles (APPs).

Disputed Revenue

Lack of clarity on "successful referral" definitions (lodgement vs. settlement) leads to lost partnerships.

Mandatory Disclosure Tool

Ensure you meet Regulation 9AB(6). Use this script before proceeding with any referred client.

Copy this script:

Please be advised that [Referrer Name] may receive a financial benefit from us for this referral. 

This benefit is [Choose: a one-time payment of $X / a percentage of upfront commission]. 

You are under no obligation to use our services, and this arrangement does not affect the cost of your loan.

The Formal Agreement Blueprint

Defining "Successful Referral"

Ambiguity here causes the most disputes. Your agreement must specify exactly when a referral counts.

✓ Settlement vs. Approval: We recommend linking payment to settlement to align costs with revenue.
✓ Exclusivity Period: Define a timeframe (e.g., 90 days) where the referrer owns the lead.

Payment & Remuneration Details

Clear invoicing and clawback terms protect your cash flow.

✓ Timing: "Payable within 14 days of settlement and receipt of valid tax invoice."
✓ Clawbacks: Explicitly state that referral fees must be refunded if the lender claws back commission within 12-18 months.

Privacy & Data Handling

Mandatory for APP compliance.

✓ Warrant of Consent: The referrer must warrant they have client consent to share details.
✓ Purpose Limitation: You agree to use data only for mortgage services, not marketing unrelated products.

Term & Termination

How do you break up professionally?

✓ Notice Period: Standard is 30 days written notice by either party.
✓ Pipeline Protection: Ensure referrals lodged before termination are still paid upon settlement.

Systematize for Scale

Don't rely on memory. High-performing brokers use portals and CRMs to track every lead.

1. Centralize

Use a dedicated form (Jotform/Typeform) for partners to submit leads. No more random texts.

2. Automate

Trigger auto-updates to referrers at "Application Lodged" and "Unconditional" stages.

3. Report

Send quarterly ROI reports to partners showing commission earned. Prove your value.

Ready to upgrade your referral network?