The strata industry is undergoing a long-overdue transformation. With SCA NSW announcing that member agencies will phase out insurance commissions by January 2026, many are celebrating this shift as a win for transparency. And it is, but only if the messaging matches the reality.
Some businesses are now publicly declaring they’ve never taken insurance commissions. That’s admirable. But when the revenue that would traditionally come from commissions is simply rerouted through related-party arrangements – such as brokerages partly owned by the same stakeholders – the ethical foundation begins to crack.
This isn’t about naming names (we know who they are anyway). It’s about raising the bar.
The Illusion of Independence
When a strata management company claims to be commission-free yet benefits financially from a brokerage it owns or is closely tied to, the ethical waters become cloudy. Owners may be led to believe they’re receiving independent advice, when in fact, the revenue model still carries potential conflicts of interest, just under a different name.
This is not transparency. It’s optics.
Ethical Leadership: The Standard We Must Set
Ethical leadership in strata management isn’t just about compliance, it’s about character. It’s about doing the right thing even when no one is watching, and especially when no one is asking.
True ethical leadership means:
-Disclosing all financial interests, not just those mandated by regulation.
-Avoiding structures that obscure revenue flows, even if technically legal.
-Putting owners first, not just in marketing, but in governance and decision-making.
-Creating cultures of accountability, where staff are empowered to question practices that feel misaligned with fiduciary duty.
The industry must move beyond performative transparency and embrace substantive integrity. That means acknowledging that commissions are just one piece of a larger puzzle, and that related-party income, opaque supplier relationships, and shareholder entanglements deserve equal scrutiny.
A Fiduciary Duty to Owners
Strata managers have a fiduciary duty to act in the best interests of owners. That duty extends beyond insurance commissions to any related-party income, whether it’s from brokerages, legal firms, maintenance providers, or debt collection services. If a manager has a financial interest in a supplier, that relationship must be disclosed clearly and proactively.
This also includes preferred supplier arrangements, where certain businesses are consistently selected for quotes or work orders due to informal partnerships or financial incentives. These relationships may not always be disclosed, yet they can significantly influence committee decisions and owner outcomes. If a supplier is being favoured because of a commercial relationship – even if indirect – owners deserve to know.
As Michael Teys wrote in The Strata Professional Newsletter | Edition #61 – 13 September 2025:
“The principles of fiduciary duties apply as much to these opaque revenue sources as to insurance commissions.”
And rightly so.
Questions Owners Should Be Asking
To help owners navigate this landscape, here are four questions worth asking your current or prospective strata manager:
(1) Do you or your company have any financial interest in insurance brokerages or related businesses?
(2) Are there any third-party suppliers you regularly use that are owned or controlled by your company or its shareholders?
(3) How are these relationships disclosed to owners and committees?
(4) Can you provide a breakdown of all revenue sources beyond management fees?
These questions aren’t confrontational, they’re foundational. They empower owners to make informed decisions and ensure their interests are protected.
A Call to SCA NSW
As the industry body, SCA NSW has a critical role to play. Their recent announcement to phase out insurance commissions is a step forward, but it must go further.
While Bettr Strata is not currently a member, I have previously held individual membership and continue to respect the decision SCA NSW has made to eliminate insurance commissions for its members. It’s a bold and necessary move, one that deserves recognition. It is leadership.
That said, I believe the organisation must now go further. From a governance and ethical standpoint, the next step is clear:
(1) Clarify your position on related-party income and ownership interests in adjacent businesses.
(2) Provide guidance to members on how to disclose these relationships transparently.
(3) Ensure the Professional Standards Scheme reflects these evolving expectations.
If the goal is to eliminate conflicts of interest, then the solution must address all forms of conflicted revenue, not just commissions.
Leading with Authenticity
As someone committed to ethical leadership in strata, I believe we must do more than follow the rules, we must lead with integrity and courage.
That means calling out mixed messaging, even when it’s uncomfortable. It means acknowledging that some colleagues – knowingly or not – are allowing disingenuous narratives to persist. In some cases, team members are being left in the dark about how their businesses actually operate, particularly when it comes to revenue derived from third-party relationships.
Transparency must start from within. If a business is benefiting from related-party income, its staff should know. Its clients should know. And the industry should be honest about it.
Putting owners first isn’t just a slogan, it’s a structural commitment. It must be reflected in how we disclose, how we govern, and how we lead.
The Time to Act Is Now
This is a defining moment for our industry.
We can either continue to operate in the grey – where technical compliance masks ethical compromise – or we can choose to lead with clarity, courage, and conviction.
– To SCA NSW: Make transparency your legacy. Ensure your standards reflect not just what’s legal, but what’s right.
– To strata managers: If you’re not in a leadership role, ask the right questions internally. Understand how your business earns revenue and whether any related-party arrangements exist. If you are in leadership, audit your structures. If you benefit from related-party income, disclose it. If you don’t, say so clearly.
– To owners and committees: Ask the hard questions. Demand full transparency. You deserve to know who profits from your property.
“It’s not an easy task to un-ring a bell.”
— State v Rader, 1912, quoted by Michael Teys in
The Strata Professional Newsletter | Edition #61 – 13 September 2025
The bell has been rung. Let’s make sure it’s heard. And answered.
Yours in strata,
JM
Disclaimer: This blog reflects the personal views and professional opinions of me, JM, and is intended to encourage open discussion and higher standards of transparency within the strata industry. It does not constitute legal advice, nor is it intended to target or defame any individual, company, or organisation. All commentary is based on publicly available information and industry observations. Any resemblance to specific entities is coincidental and unintentional. Readers are encouraged to seek independent legal or professional advice before making decisions based on the content herein.