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Forum: Damned if you do, mad if you don't?

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Australian Broker | 17 Apr 2012, 02:30 AM Agree 0
Australian Broker is asking brokers about how severely clawbacks have impacted them, and so far feedback on clawback clauses is mixed
  • Ray | 11 Apr 2012, 07:52 PM Agree 0
    Not an issue for me. i have a clawback clause in our contract where the client pays.
  • Casey | 16 Apr 2012, 03:28 PM Agree 0
    I believe in and use a clawback provision. Why should I pay for the actions of the other 2 parties in the transaction? If I stuff up or churn the client then I'm happy to wear the cost. If the client decides to sell up early, I pay. If the bank ruins the relationship, I pay. Why are we paying for other peoples actions?
  • Damien | 16 Apr 2012, 04:39 PM Agree 0
    All Brokers should be using a clawback provision, you are simply mad if you don't.
  • Todd | 17 Apr 2012, 10:00 AM Agree 0
    I am interested on how you enforce this Clawback Clause should you need to chase the client? They could easily not pay then making you have to chase it legally which is then not worth it... Look forward to your response as we would like to start this
  • 1martym1 | 17 Apr 2012, 11:06 AM Agree 0
    @Todd it's not really about enforcing it. What it does is remind the client that you dont work for free for a start. What it also does is weed out any clients who are looking for a short term loan. I haven't had to enforce one yet (mine only $550) but I think sending them a copy of the signed agreement and an invoice would be enough. Why wouldnt they pay this? It's the same as a lawyer sending a bill.
  • Casey | 17 Apr 2012, 11:49 AM Agree 0
    As Martym said, it's education. Most clients are astonished to hear that clawbacks exist. But I feel my clause is also fair. It says that if they want to change banks or properties, and re-engage my services, then the new commission is considered payment of the old commission and the clawback provision resets on the new loan. All my clients see this as fair and has educated them that we are not a free service, but also it is important to us to continue to service their needs. It makes sure our original recommendations closely match their needs and desired outcomes.

    As one client said to me, if you don't get it right first time then it's double work for you to get it right the second time. This I feel is fair. Our mistake our cost. But if the client changes the game without telling us then it's their cost.

    Since bringing this into effect 18mths ago, I haven't had a clawback. And it's easier to highlight the need to charge a brokerage fee for short term lending that you get clawed on.

    I have only had one person refuse. We parted ways and he ended up going bank direct. I'm more than happy with that, not the sort of business I'm interested in.
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