Association says NO to excessive broker kickbacks

by Julia Corderoy16 Apr 2015
The FBAA has called on brokers to protect their professional credibility by not becoming involved in uncommercial kickbacks offered by property developers.

After Australian Broker yesterday reported that an anonymous Melbourne broker told the Sydney Morning Herald that developers are enticing brokers with “unethical” referral fees, FBAA chief executive officer Peter White has responded, saying these reports are  “concerning and potentially unethical”, but it is important to remember that it is only speculation so far.

“There is talk and there are anonymous sources, but I have the confidence that the majority of professional brokers would not be involved,” White said.

“The NCCP is very clear in that it obligates brokers to act in the best interests of clients and to disclose all conflicts of interest and any commissions from other products such as this, where credit is being provided.

“These sort of excessive commissions would appear to any reasonable person to be a clear conflict of interest.”

White says that while there are some instances where the practice may technically be legal, it is important for the industry that associations like the FBAA take a tough and transparent stand.

“Bottom line is that almost half the people who borrow for a mortgage use a broker, and these people rely on our expertise, professionalism, integrity and transparency.

“Anything that could potentially bring into question these core qualities cannot be allowed to flourish.”

White says he was not aware of any FBAA broker who accepted such excessive commissions on property developments.

“I have no doubt it happens with some brokers, but when you carry the FBAA name there is a requirement to be a leader, and you will not be able to carry our name if you put your own interest above that of the client.”


  • by Concerned Broker 16/04/2015 9:07:00 AM

    If that is the case of conflict of intetest.. What is then the difference when an aggregator is also related to a Real Estate entity and places its brokers to support the Real Estate Agents???

  • by Rosemary Johnston 16/04/2015 9:07:42 AM

    Great comments Peter! We are aware of a number of mortgage aggregators who have arrangements like this with hungry property groups so that their brokers can access commissions. The aggregator also benefits and we have seen some post record profits as a result. When the business is driving this behaviour and profiting how does the broker respond?

  • by tina 16/04/2015 9:14:21 AM

    Thank you Peter as I and many others have never received any payment from any real estate agent or property developer nor have I ever paid any one for referring clients to me. Shame if this is going on in the industry as yesterday's comments indicates this is so.