Commissions are everywhere in Australia’s financial landscape, shaping the way we buy property, invest, and even choose our insurance. But in 2025, as regulations evolve and transparency demands grow, understanding how commissions work—and how they impact your bottom line—has never been more important.
How Commissions Work: The Basics and Beyond
At its core, a commission is a fee paid to someone for facilitating a transaction or providing a service. In Australia, commissions are most commonly seen in:
- Real estate: Agents earn a percentage of a property’s sale price—typically between 1.5% and 3% for residential sales.
- Financial advice: Some advisers receive commissions from product providers for recommending investments or insurance products, though recent reforms have tightened these rules.
- Insurance and lending: Brokers may receive upfront and ongoing commissions for arranging loans or insurance policies.
While commissions can incentivise professionals to help you, they can also create conflicts of interest if not disclosed or regulated properly.
2025 Policy Updates: Cracking Down on Hidden Costs
The Australian financial sector has seen major changes in how commissions are regulated. As of 2025, the following updates are shaping the industry:
- Financial advice: Following recommendations from the Quality of Advice Review, product commissions on superannuation and investment products remain largely banned, with further tightening on life insurance commissions. Advisers must now provide clearer fee disclosures and demonstrate that commissions don’t compromise client interests.
- Mortgage broking: The Royal Commission’s legacy continues, with trail commissions under scrutiny and new reporting requirements for brokers on how commissions are calculated and disclosed.
- Real estate: State-based reforms have introduced tougher disclosure requirements for agents, including mandatory written agreements outlining commission rates and any potential conflicts of interest. Several states have also cracked down on “kickbacks” and referral fees.
These changes are designed to boost transparency and ensure Australians can make informed choices, free from hidden incentives.
Real-World Impact: What Commissions Mean for You
Commissions can add thousands of dollars to the cost of buying or selling a home, arranging a loan, or investing in managed funds. Here’s how it plays out in practice:
- Buying or selling property: On a $900,000 home, a 2% agent commission means an $18,000 fee—before marketing costs. Always compare agent rates and ask about service inclusions.
- Choosing a mortgage broker: Brokers are legally obliged to act in your best interests, but be aware of how commissions might influence lender recommendations. Ask for a breakdown of all payments received.
- Financial advice: If an adviser receives a commission for recommending a product, they must now tell you—upfront and in writing. Don’t hesitate to ask if a fee-for-service model is available instead.
For consumers, the key is transparency. The more you know about how your adviser, agent, or broker is paid, the better positioned you are to judge the value of their service—and to negotiate if necessary.
Looking Ahead: Navigating Commissions in 2025 and Beyond
As the Australian financial sector shifts towards greater transparency and consumer protection, commissions are becoming less hidden—and more hotly debated. With regulators tightening rules and technology making fee comparison easier, the power is increasingly in the hands of the consumer.
Whether you’re buying property, seeking financial advice, or shopping for insurance, always ask how your adviser is paid. Don’t be afraid to compare options, negotiate fees, and demand full disclosure. In 2025, an informed approach is the best way to ensure commissions work for you—not against you.
