Referral Service Agreement
Many finance brokers generate business through referral sources. In some cases, a fee is exchanged, especially if the referral results in a successful loan application.
Business to business ‘regulated’ referral partnerships must have a Referral Service Agreement in place prior to receiving the first client referral, regardless of whether a commission is exchanged for the referral.
A regulated referrer maybe a Real Estate Agent, Accountant, Financial Planner, Solicitor - effectively anyone who operates as a business or company and provides you with a lead.
The purpose of having a formal agreement in place is to ensure both parties adhere to obligations with respect to the conduct of these referral activities. The agreement must be prepared on business letterhead and contain the following information:
Date of Agreement
Company - Business Name
Contact within the business who will be referring clients
Business Address
Contact Details - phone number
Business Type i.e. Accountant etc.
The agreement can provide you with some indemnity should the referring party do something outside of what they are permitted to do or not do. As an example, the referring party must:
only tell the client that you can provide a particular type of credit service (i.e. that you are a mortgage broker).
obtain the client's consent to pass on their name, details and the purpose for which the loan is being sought.
not charge the client a fee for passing on this information.
must disclose if they will receive a commission.
must pass on the client’s details within 5 days.
Where do I find the Referral Service Agreement in Mercury?
In the Documents tab, select Merge Templates from the left-hand panel.
Open the Loans - Compliance folder.
Choose MASTER: Referral Service Agreement.doc and click Download.
To Access the Referral Service Agreement in Mercury Nexus
1. In the
, click on the document icon, MASTER Templates
2. Open Loans- compliance folder
3. Choose MASTER: Referral Service agreement.doc and click Download
Annual review
We recommend that you review your referring parties at least annually to make sure that they are still a reputable company (or individual) with whom you would want to be associated. You should also check and make sure that your referrers are only providing you with the client’s information, and are not providing any advice about a loan or lender for which they are unlicensed to do.
ASIC Requirements
It is a requirement under ASIC’s regime that Australian Credit Licence (ACL) holders (and on behalf of their Credit Representatives):
provide a copy of the completed agreement to the referrer (doesn’t need to be executed by parties).
retain a copy of the file.
maintain a Referral Register (detailing referring businesses).
For Credit Representatives appointed under the Connective ACL, you must supply a copy of each of your agreements to the Compliance Team at [email protected] so we can update/maintain the Referral Register on your behalf.