Finance Referral Rules for Accountants and Professional Advisers

Quick answer: A professional can often make a simple finance introduction without becoming the credit adviser, but the boundaries matter. For consumer credit, ASIC's referral exemption has specific conditions, including a written agreement, client consent, timely transfer of contact details and disclosure of referral benefits. Accountants also need to consider APES 110 and their own independence obligations.

A finance referral is not automatically the same thing as giving credit advice. The distinction is important because the legal and professional obligations can change when a referrer goes beyond introducing a client.

Do you need a credit licence just to make an introduction?

ASIC says a person who engages in consumer-credit activity generally needs to be licensed, authorised or exempt. It also describes a narrow referral exemption.

ASIC's RG 203 says an upstream referrer relying on that exemption must satisfy conditions including:

• a written referral agreement with the licensee or representative;
• the referral being incidental to another business;
• the consumer's consent to their name and contact details being passed on;
• passing those details within five business days; and
• disclosing any benefit such as commission.

The exemption has limits. A referrer should not assume it covers recommending a particular consumer loan or helping the client choose a specific credit contract.

Commercial finance can be different because the National Credit Act principally regulates consumer credit. The purpose and structure of the transaction still need to be considered.

What does APES 110 add for accountants?

APES 110 treats referral fees and commissions as capable of creating a self-interest threat to objectivity and professional competence and due care.

The accountant's obligations are therefore not solved merely because the credit-law referral exemption is available. The accountant needs to consider the professional code, conflicts, disclosure and any assurance-independence restrictions that apply to the client relationship.

What about assurance clients?

APES 110 contains stronger independence restrictions for assurance work. If a practice performs audit, review or other assurance work for the client, do not assume the same commission arrangement that may be acceptable for an ordinary business-services client can simply be used.

Does the client have to consent?

For the ASIC upstream consumer-credit referral exemption, yes: the client's consent to passing their name and contact details is one of the stated conditions.

Consent is also good relationship discipline more broadly. The client should understand who is receiving their information and why.

Are referral payments subject to GST?

GST depends on the facts. Under the general section 9-5 framework, a supply can be taxable where it is made for consideration in the course of an enterprise, connected with Australia, and the supplier is registered or required to be registered, unless an exception applies.

A professional firm should have its accountant/tax adviser confirm the GST treatment of its specific referral arrangement rather than assuming every payment is treated identically.

Related referral guides

• Do I need a credit licence to refer a client for finance?
• What does APES 110 mean for finance referral fees?
• Do I need client consent before a finance referral?
• Are finance referral fees subject to GST?

Sources and verification

• ASIC — FAQs: Does the credit legislation apply?
• ASIC — Regulatory Guide 203: Do I need a credit licence?
• APESB — APES 110 Code of Ethics
• ATO — GST taxable-supply principles

General information only. Referral, licensing, professional-conduct, tax and disclosure obligations depend on the activity, profession, client and arrangement. This is not legal, tax or accounting advice. Check the requirements that apply to your practice before relying on a referral exemption or accepting remuneration.