Under the new framework, SCA NSW members will transition away from receiving commissions on insurance products. Instead, remuneration for insurance-related services will be structured through fee-based arrangements, developed in consultation with property owner clients. This shift is designed to provide clearer financial dealings and reduce potential conflicts of interest within the industry.
Robert Anderson, President of SCA NSW, emphasized the careful consideration behind this decision, stating, "The decision to replace insurance commissions over this phased transition has not been made lightly, or quickly. Undertaking this reform is about delivering transparency, trust, and showing leadership."
The move comes in response to growing concerns over the lack of transparency associated with commission-based models in strata insurance. By adopting a fee-for-service approach, the industry aims to align more closely with the interests of property owners, ensuring that strata managers act in the best interests of their clients without the influence of commission incentives.
For property owners, this reform is expected to deliver several benefits:
- Enhanced transparency in financial transactions related to insurance.
- Improved trust and accountability from strata managers.
- Simplified pricing structures, making it easier to understand and compare costs.
Strata managers, on the other hand, may experience:
- Greater clarity in their remuneration structures.
- Strengthened credibility and trust with clients.
- Potential for more sustainable business practices without reliance on commissions.
While the transition may present challenges, such as adjusting to new fee structures and renegotiating contracts, the overarching goal is to create a more transparent and equitable environment for all stakeholders involved in strata management.
As the January 2026 implementation date approaches, SCA NSW plans to provide guidance and support to its members to facilitate a smooth transition. Property owners are encouraged to engage with their strata managers to understand how these changes will impact their specific arrangements and to ensure that the new fee structures align with their expectations and needs.
This proactive step by SCA NSW sets a precedent for other regions and industries, highlighting the importance of transparency and trust in professional services. It reflects a broader trend towards consumer-centric practices, where the interests and rights of clients are placed at the forefront of business operations.
