A non-bank lender has said its broker incentive of Rolex watches valued at $12,000 does not constitute a conflict of interest.
Chifley Securities has announced an incentive program wherein a Rolex watch will be gifted to accredited brokers who lodge and settle $12 million worth of loans through Chifley within a six month period.
Chifley Securities was founded by finance industry veterans Dominic Lambrinos and Domenic and Joe Morello. Lambrinos said they already have two brokers who are almost at the $12 million mark.
“Essentially I wanted to provide a reward that acknowledges a special type of Commercial Broker,” he said.
“Referring and settling an amount of $12m in 6 months is no easy task - therefore I wanted to provide a gift that was in itself special.”
On potential conflicts of interest from the client’s perspective, Lambrinos said Chifley Securities believe that the ‘integrity of a commercial broker rests in more fundamental precepts than in the payment of rewards’ and the Rolex watches are simply further incentive on top of the broker’s commission.
“This (commission) arrangement is what attracts borrowers to commercial brokers in the first place and it is this arrangement that ensures the commercial broker has the interests of the borrower at the forefront,” Lambrinos said.
“Borrowers know that they will pay little, if any, amounts upfront and that the commercial broker will be rewarded on the successful completion of the assignment.”
“We therefore see the arrangement as the commercial broker being incentivised to complete the transaction on behalf of the borrower, rather than being seen as the commercial being placed in a position of conflict.”
In addition, Chifley Securities advises brokers to disclose their participation in the rewards programme to any clients they may be referring.
Morello said the rewards program is an Australian first.
“We are already delivering brokers and their clients a timely and efficient loan facility, having written more than $150 million in loans since we launched a few months ago.”
In addition to the Rolex offer, the lender said brokers who work through Chifley Securities will generate a stronger flow of commissions at an average of 1% and the chance to earn rewards like travel and holidays.