Money confessions – My SIL propositioned me
Money messes, meet real talk — straight-up advice on your biggest financial dilemmas
This week's money confession:
My brother's wife works in a similar but distinct industry to me. We sometimes have clients who crossover, and in the last decade or so, we've occasionally worked together on certain projects or with certain brands.
She recently reached out and said she has some clients to refer my way. Great! The problem? She's asked if I can pay her a 20% referral fee on any business that comes off. She suggested I add it on top of my prices, then she'll just invoice me for the 20%.
I would be really uncomfortable with this, for a number of reasons – including the fact that it's not transparent or ethical, and I would feel like I'm ripping my clients off, and it just generally doesn't align with my values. But she's family, so it's awkward, and also those leads would come in really handy. How do I politely but firmly say "thanks but no thanks" to the referral fee, without saying no to the referrals?
Sarah Megginson, Head of Editorial at Finder, says:
Ooh this is a tricky one. I assume neither of you work in financial services of any kind, because those industries are highly regulated when it comes to referrals – you have to clearly and transparently disclose any referral arrangements in writing, and there can't be any conflict of interest at play.
This should be the bare minimum in any industry, but the rules of engagement are different across the board. While everyone should act within a mutually agreed ethical code of conduct, we all have a different idea of what that means.
For instance, in this case, your sister-in-law might have the view that she's doing you a favour; that she could refer the business elsewhere, so you're gaining a material benefit when she refers to you; and that being compensated for her valuable connections is only right and fair. That's not a view I share, but I always try to see both sides of the situation when weighing up a decision.
How to reply in a way where you can access the much-wanted referrals, without paying an obnoxious price? That may not be achievable, but you can certainly give it a red hot try!
I would start by acknowledging the offer ("Thanks for thinking of me!"), then gently explain that you're not comfortable with the lack of transparency in her proposal. Go on to reiterate how much you've enjoyed collaborating on projects in the past, so if she still feels like you're a good fit for her clients, you'll happily accept an introduction. Otherwise, let's keep things clean and separate for the sake of clear boundaries. My guess? She'll withhold her juicy referrals and farm them out to someone who is willing to pay the piper. But at least you can hold your head up high at the next family dinner!