What should an MSP disclose to clients about vendor referral fees?

The short answer for MSPs

Tell the client in writing, before they decide, who pays you, how the payment is worked out and whether it changes their price. For private advice to a business client, that duty usually comes from your MSA, the vendor's partner program terms and the client's procurement policy. When you recommend in public, the FTC's guidance on endorsements applies, and undisclosed payments for steering a client can raise state-law questions as well.

A data licensing introduction runs the other way from a typical agent commission. The client receives a one-time license payment, and your reward is a share of SourceX's fee, never deducted from what the company receives. That makes the disclosure easier to write, but it still needs writing.

What does the FTC say about paid recommendations?

The FTC expects a clear disclosure whenever a paid connection would change how your audience weighs a recommendation. Its Endorsement Guides, 16 CFR Part 255, include section 255.5 on disclosing material connections between an endorser and the company being recommended. The current text follows revisions the FTC announced in June 2023. The Guides interpret Section 5 of the FTC Act rather than acting as binding rules themselves, but the FTC can investigate practices that are unfair or deceptive.

The staff FAQ, FTC's Endorsement Guides: What People Are Asking, is the practical part for an MSP that publishes content:

• A connection that a significant minority of your audience would not expect, and that would affect how they weigh the recommendation, should be disclosed clearly and conspicuously.
• The disclosure belongs close to the recommendation, on each platform where it appears, not buried in comments or a footer.
• A plain statement such as "I get commissions for purchases made through links in this post" works; the label "affiliate link" on its own may not be understood.
• No specific wording is mandated.

That covers your website's recommended-tools page, client newsletters, webinar slides and LinkedIn posts. A recommendation made privately in a quarterly business review rests mainly on your contract and the client's trust. Payments the client never hears about raise the separate questions covered in whether an undisclosed referral fee is commercial bribery.

How does a data licensing introduction differ from an agent commission?

The money moves in the opposite direction, and that is the first thing a client should hear.

With a vendor commission, the client buys something and you benefit. With a data licensing introduction, the client may be paid for records it already keeps, and you benefit from the intermediary's fee.

How disclosure applies in common MSP situations

What should the MSA say?

A standing clause means every later disclosure points back to something the client already signed. Adapt this with your counsel:

Then add a one-off note when you raise SourceX:

Why your admin access stays out of it

You hold credentials to exactly the systems a buyer would value, which is why your role has to stop at the introduction. Do not pull sample exports, screenshot a ticket queue or describe a client's records to anyone. The company completes its own data inventory with SourceX, de-identification and redaction requirements are agreed with the company before any work begins, and data is delivered only after an executed agreement and the company's authorization.

The client also has its own promises to check. FTC staff have warned that promises not to use customer data for undisclosed purposes, such as training models, are enforceable whether they appear in privacy policies, terms of service or marketing. That review belongs to the company and its counsel, not to its IT provider.

Your disclosure checklist

• Our MSA or proposal template mentions third-party compensation.
• I have read the client's supplier code of conduct, if it has one.
• The written disclosure names the payer, the calculation and the effect on price.
• It is dated before the client decides.
• Public recommendations carry a disclosure next to each link.
• I have shared only basic fit facts: headcount at peak, years operating, systems in use.

How the SourceX reward is calculated

Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company. Rewards are payable only after the buyer pays and SourceX receives its fee; no reward is guaranteed.

This is general information, not legal, tax or financial advice. Confirm with your own counsel before relying on any clause above.

Next step

Check fit before you raise it: the company fit checker is a preliminary, non-binding screen that needs no contact details. The MSP partner overview covers which clients tend to qualify, and how management consultants handle vendor fees is a useful comparison. When your disclosure wording is ready, register as a partner.