An estate agent who refers a buyer to a finance broker and is paid a finder’s fee for it is likely, in ASIC’s example, to be acting as an intermediary between the buyer and a lender, which is a credit activity. ASIC’s guide sets out referral exemptions an agent can rely on only by meeting every requirement, one of which is telling the buyer about any commission.
General informationThis page summarises ASIC’s Regulatory Guide 203 and Moneysmart’s guidance. Whether a particular referral was exempt is a legal question about its facts. Moneysmart is the place to check, and ASIC’s professional registers list credit licensees and their representatives.
A finder’s fee makes a referral credit activity
ASIC’s Example 9 is an estate agent who sends someone to a finance broker to arrange a loan for a house and receives a finder’s fee from the broker. ASIC says the agent is likely to be acting as an intermediary, because the referral was made to secure credit for the buyer, and that it makes no difference that the buyer has not yet chosen a lender.
Acting as an intermediary is one of the credit activities the licensing scheme covers, alongside giving credit assistance; the two can happen at once. ASIC’s note to the example adds that some referrers can rely on exemptions from licensing.
Two ways to refer, and what each exemption asks
The guide describes two kinds of referral. In a downstream referral the agent tells the buyer that someone else provides credit and gives the buyer that person’s contact details, or a link to them. In an upstream referral the agent passes the buyer’s name, contact details and what the loan is for to the broker.
| Question | Downstream: the buyer gets the broker’s details | Upstream: the broker gets the buyer’s details |
|---|---|---|
| What must be disclosed | Any benefit the agent may receive, such as a commission, in the same form as the contact details: written if they were written. | Any benefit the agent may receive for the referral, such as a commission. |
| Other conditions | The agent may only inform and pass on details; going further brings the activity outside the exemption (see the last row). | As downstream, the agent may only inform and pass on details. Also: a written referral agreement with the broker; the referral incidental to another business; the buyer’s consent; the details passed on within five business days. |
| What rules it out | Suggesting the buyer apply for a particular loan with a particular lender. | Suggesting the buyer apply for a particular loan with a particular lender; having been banned from credit activity; charging the buyer for passing on their details; a business mainly in the trade of passing on people’s details; approaching people face to face from non-standard premises, such as a temporary stall. |
| ASIC’s example | At an inspection, the agent tells the buyer to contact a named broker, gives the details and a website link, and says the agent will be paid a commission if the buyer takes a loan through the broker; the website says so too. ASIC says this is likely covered. | The agent, with a referral agreement, passes the buyer’s details to the broker with consent and within five business days, having told the buyer about the commission. ASIC says this may be covered, but not if the commission was not disclosed when the agent offered the referral, or the details went late. |
ASIC’s Example 16: the stall
One of ASIC’s examples is set squarely in investment property. An agent marketing off-the-plan investment homes runs pop-up stalls in airport lounges and shopping centres, tells visitors it can connect them with a lender offering residential investment loans, and passes their details on. ASIC says the upstream exemption does not cover this agent even if every other requirement is met, because the people were approached face to face from non-standard premises.
Without an exemption, ASIC’s guide is direct about the consequence: engaging in credit activities without a licence is an offence under the National Credit Act, and so is a licensee doing business with unlicensed people.
Circles of referrers
Moneysmart’s land banking page describes a circle of referrers: promoters may send investors to advisers they already do business with, some with a personal interest in the development; the land banking guide sets that out.
Paid to promote
Moneysmart’s page on investment hype covers promotion online. Celebrities and influencers may be paid to promote investments, and their posts are not always reliable or unbiased. It describes fake experts who pose beside flashy cars or properties and claim they can double your money quickly, and notes that high returns usually come with a higher risk of loss.
One item on its checklist is about money changing hands. In our words, it asks:
- Is the post sponsored?
- Does the person promoting it earn a commission?
- Do they gain anything if you sign up?
Moneysmart sums the item up as a single question about what the promoter stands to gain. It is the question a referral exemption answers in writing: ASIC’s guide asks the agent to disclose the commission, so the buyer knows who is paid for the referral.