Broker guide
Non-Solicitation Clauses for Broker Exits in 2026
Leaving a brokerage? Understand non-solicitation clauses, restraint periods and the client, trail and data questions to settle before making contact.
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A non-solicitation clause restricts attempts to draw specified clients, staff or other business relationships away from a business. For a departing mortgage broker, its effect depends on the agreement’s wording, the relationships covered and the law governing the restraint. An incoming client call can still raise contractual questions if the agreement also restricts accepting business.
What a Non-Solicitation Clause Restricts
Solicitation means seeking or encouraging the business or involvement of a protected person. A broker’s targeted invitation to refinance through their new brokerage is a practical example. The agreement can also cover encouraging a former colleague to leave or persuading a referral partner to move their referrals.
Find the definition of each protected group in your agreement. It might cover clients you personally dealt with, clients of the whole brokerage, prospective clients, employees, contractors or referral partners. Those groups have different boundaries, so a label such as “former clients” is too vague for deciding whom you can approach.
The Mortgage & Finance Association of Australia (MFAA) explains the distinction between non-compete and non-solicitation clauses. Its example wording extends beyond soliciting clients to dealing with them and accepting approaches. Read the operative verbs and definitions together, even when the heading says only “non-solicitation”.
A clause covering specified business approaches doesn’t automatically prohibit every conversation with anyone connected to the former brokerage. The purpose, content and circumstances of a communication matter. Give your lawyer the proposed message and its intended recipients before treating a social conversation, departure announcement or targeted offer as permitted.
Non-Solicitation, Non-Compete and Non-Dealing Terms
Non-solicitation restricts approaching protected relationships, non-dealing restricts doing business with them and non-compete restricts competing work or involvement in a competing business. An agreement can contain all of these restrictions. Permission to join a new brokerage therefore leaves a separate question about the clients you can serve.
Consider two hypothetical departures involving the same protected client group and a six-month restraint.
Outbound approach: A broker emails a former client offering a loan review through the new brokerage. That invitation raises a solicitation question because the broker initiates the approach. Routing the invitation through a colleague doesn’t settle it if the clause also covers indirect conduct.
Inbound enquiry: A former client independently calls the broker and asks for a refinance review. Who initiated contact matters to the solicitation question. A separate restriction on dealing with clients or accepting approaches can still affect whether the broker takes the work.
The incorrect assumption is that every inbound enquiry is automatically permitted. The useful distinction is between evidence that the client initiated contact and permission to accept their instructions under the full agreement. Keep the original enquiry and obtain advice on the response before progressing the file.
Read the Restraint Period and Covered Relationships
The non-solicitation period starts at the event defined in the contract and runs for its stated duration. That event might be employment ending, an engagement ending or another defined termination event. Read notice and garden leave terms alongside it so you don’t calculate from the wrong event.
Make a short record of the clause’s limits:
- Record the triggering event and how the agreement calculates the end of the restraint.
- Identify the protected relationships and any lookback period used to define them.
- Note any geographic area and which activities it restricts.
- Copy each alternative duration, area or client group if the clause uses cascading restraints.
- Identify the governing law and any written release or variation.
For a hypothetical clause, a six-month restraint might cover clients the broker dealt with during their final 12 months at the brokerage. The six months limits when conduct is restricted. The 12-month lookback identifies which relationships fall within the restriction.
A stated period alone doesn’t establish enforceability. Treasury’s explanatory materials on restraint reform describe the common-law test of reasonableness and protection of legitimate business interests. State law can also affect the analysis.
Give your lawyer the full agreement, your employment or contractor status, your role and the relationships you developed. Include the information you could access, the restriction’s practical reach and any business-sale or shareholder agreement. Those facts help distinguish protection of client relationships or confidential information from a restriction extending beyond the interest it seeks to protect.
Treasury’s 2026 draft restraint legislation proposes restrictions on employee non-competes, co-worker non-solicitation and cascading restraints. Client restrictions require their own analysis. A consultation draft doesn’t itself release you from a contract, and a headline about non-competes doesn’t decide a client non-solicitation question.
The draft’s scope and transition rules also distinguish employment arrangements from other agreements. If reforms become law, their commencement, coverage and treatment of new or varied agreements determine whether they apply. Have your adviser apply the operative rules to your agreement before relying on a reform announcement.
Client Contact, Trail and Data After a Brokerage Exit
A client’s choice of broker, your right to accept work, existing trail payments and permission to access records are separate questions. A client asking to follow you doesn’t release your obligations to the former brokerage. A continuing trail payment also doesn’t establish permission to solicit another transaction.
Match Each Proposed Action to Its Permission
| Proposed action | Agreement check | Consent and access check | Record to retain |
|---|---|---|---|
| Invite a former client to a loan review | Identify protected clients and restrictions on invitations | Establish permission to use their contact details for that purpose | Proposed message, recipient group and written advice or release |
| Accept an unsolicited client enquiry | Identify non-dealing or acceptance restrictions | Confirm authority and client instructions for the new engagement and file transfer | Original enquiry, advice on the response and authorised handover |
| Reconcile residual trail | Establish surviving payment entitlements and applicable deductions or conditions | Confirm which statements or reports you are authorised to receive | Commission statements, reconciliation and written payment decisions |
| Export the old customer relationship management (CRM) database | Identify confidentiality, record-use and return obligations | Confirm the approving person, permitted files and privacy basis for transfer | Written export authority, permitted scope and secure transfer record |
For trail reconciliation, ask the responsible brokerage or aggregator to identify the governing commission schedule. Record the payee, payment calculation, ongoing conditions and any clawback or disputed deductions. Keep those answers separate from the legal advice about approaching clients.
The MFAA’s brokerage discussion of restraint reform explains why departures can affect future trail and upfront-commission clawback exposure. Those commercial consequences help explain the dispute. They don’t decide a particular broker’s payment entitlement or authorise withholding it.
Lender access needs its own confirmation. Ask the responsible licensee, aggregator or lender which accreditation and servicing permissions apply after departure. A working login establishes technical access only, so obtain authority for the intended activity before using the former brokerage’s systems.
Handle Client Records Through an Authorised Transfer
Privacy obligations govern personal information handling separately from a contract’s ownership or confidentiality provisions. For entities covered by the Privacy Act, Australian Privacy Principle 6 generally limits use and disclosure to the collection purpose unless an exception applies. Consent is one possible exception for a secondary purpose.
Client consent to transfer their information doesn’t itself authorise access to the former brokerage’s database or waive its contractual rights. Obtain the client’s instructions and the necessary authority from the record holder. Define which files can move and use the agreed secure transfer method.
Australian Privacy Principle 11 requires reasonable protection against unauthorised access and disclosure. Its destruction rules include exceptions for legally required retention. A departure therefore needs an agreed record custodian and access arrangements for retained files, alongside decisions about authorised copies.
The Australian Securities & Investments Commission (ASIC), in Regulatory Guide 273, expects mortgage brokers to keep records demonstrating compliance with best interests obligations. The guide discusses retention in light of the credit product and circumstances. A record-keeping obligation doesn’t grant unrestricted permission to take the whole database.
Marketing has additional rules. The Office of the Australian Information Commissioner (OAIC) explains direct marketing under Australian Privacy Principle 7, including its interaction with spam and do-not-call legislation. An unsubscribe option alone doesn’t settle the contract or data-use questions for a departure campaign.
Prepare a Departure Record Before Making Contact
Prepare one departure record that lets your lawyer assess proposed conduct and lets the responsible brokerage or aggregator confirm payment and access facts. Keep sensitive material in an authorised location. Retain only records you are permitted to hold.
- Gather the signed employment or contractor agreement and any commission, confidentiality, shareholder or business-sale documents. Include amendments and written releases.
- List the affected relationships and why each might be covered. Record who handled each relationship and the relevant contact history.
- Save proposed announcements and client messages. For an inbound enquiry, preserve the original communication and note who initiated it.
- Record system permissions and the proposed file-transfer scope. Identify the client instructions, approving record holder, transfer method and custodian of retained records.
- List unpaid or continuing commissions and the statements needed to reconcile them. Ask the responsible firm or aggregator to answer each unresolved payment question in writing.
- Give the record to your legal adviser for interpretation of the restraint and proposed conduct. Retain written advice and any agreed release before taking the relevant action.
If the departure also involves switching mortgage aggregators, coordinate the separate notice, accreditation and payment tasks with that move. Before sending a message or opening a client file, match that specific action to the written decision and permission in your departure record.
