Show download pdf controls
  • Commission agents

    When applying the PSI 80% rule, you can treat the clients of a principal as your own clients.

    As a commission agent, you can include a principal's clients if you meet all of the following:

    • you're an agent of the principal, but not the principal's employee
    • you receive income from the principal for services that you provide to customers on the principal's behalf
    • at least 75% of that income from the principal is commissions or fees, based on your performance in providing services to the customers on the principal's behalf
    • you actively seek other clients to provide services on the principal's behalf
    • unless you enter into an arm's-length arrangement, you don't provide any services to clients on the principal's behalf if you're using premises:      
      • owned by the principal (or their associate), or
      • in which the principal (or their associate) has a leasehold interest.

    You can use the principal's premises to negotiate, organise or administer arrangements solely between yourself and principal, such as:

    • negotiating agency agreements
    • receiving training
    • attending strategy meetings.


    Alice is a sole trader and the only financial planner contracted to work for Iked Insurance Company Ltd. More than 75% of her income comes from commission she receives from the company. She is an agent for the company and provides financial advice and maintenance on investments for clients. Alice actively seeks new clients through word of mouth and advertising in local financial newspapers.

    Alice can treat Iked Insurance Company Pty Ltd.'s clients as her own clients when working out the source of her PSI for the 80% rule because:

    • she is an agent of the company, not an employee
    • she receives income from the company for services she provides to customers on the company's behalf
    • at least 75% of her income from the company is commissions
    • she has her own premises that is not associated with Iked Insurance Company Pty Ltd

    Alice provided services to 40 clients (where many are unrelated) on behalf of Iked Insurance Company over a 12 month period.

    End of example

    Next steps:

    Last modified: 07 Aug 2019QC 46016