Steadfast today released an update on action taken on strata – and published a report from consultant John Trowbridge on the measures it has introduced.

The update comes as NSW Fair Trading held a forum last week to gain further feedback on “options to transition away from strata insurance commissions”, as the fallout from the ABC’s damaging exposé continues.

In its release to the Australian Securities Exchange, Steadfast says an internal review is ongoing and minimum-standard “operating expectations” on strata will be introduced in addition to its broker code. 

Mr Trowbridge, who was commissioned by Steadfast to report on strata remuneration in 2021, has reviewed the listed group’s work.

His report published today says the operating expectations represent “an important step” towards comprehensive disclosure.

On conflicts, he says there are “no conflicts of interest for any of the Steadfast brokers either upstream (to underwriting agencies) or sideways (to other brokers)”, and he has seen no evidence of “preferential placements”.

Mr Trowbridge repeats the recommendation from his original report that the sharing of commissions and broker fees between brokers and strata managers is a conflict of interest and “should be phased out”.

However, he also makes clear that Steadfast has a different view. 

“Steadfast and its brokers … in acknowledging this proposition, believe these conflicts are manageable and will be assisted in future by the extended disclosures in the operating expectations.”

He told insuranceNEWS.com.au today that “disclosure is a starting point, not an end point. I don’t believe that you overcome the conflict that brokers and strata managers have in sharing of revenue between them by disclosing it.” 

Steadfast CEO Robert Kelly says he believes enhanced disclosure, enforced by legislation already introduced in NSW, “solves the problem” and there is no need to phase out the sharing of commissions.

NSW Fair Trading hosted a “strata insurance commissions forum” on Wednesday, attended by more than 50 stakeholders including brokers, insurers, lawyers, strata owners and consumer advocates.

Some who attended say it was made clear further action on commissions – and how they are shared between brokers and managers – is coming.

“Participants acknowledged that the practice in the strata industry for strata managing agents to receive commissions has evolved over time and become the standard practice for many managing agents,” a communique released after the forum says.

“Many agents charge lower management fees on the basis that commissions will considerably supplement their income stream. 

“Overall, participants generally agreed that the status quo needs to change, noting that a sustainable, viable and trusted strata industry is good for both consumers and managing agents.”

NSW Fair Trading will now provide advice to state minister Anoulack Chanthivong “about options for change and next steps”.

It will continue engaging with stakeholders early next year, the communique says.