A referral income guide for conveyancers: from introduction to commission statement

Think about what a purchase file actually contains. A client taking on a £280,000 mortgage — the largest debt of their life — often with no life cover attached to it. A couple buying jointly who have never discussed what happens if one dies; roughly six in ten UK adults have no will at all. A buy-to-let investor completing on a fourth property with no thought about ownership structure.

None of that is your retainer. All of it is visible from your desk. Conveyancers are uniquely placed because the transaction forces clients to confront these questions at exactly the moment a professional is already acting for them.

You cannot advise on protection, pensions or investments without FCA authorisation, and your regulator expects you to stay in lane. But an introduction to a regulated adviser — flagged at instruction, actioned around exchange — fits naturally into the file and into the client's timeline.

A conveyancing referral maps neatly onto the transaction. At instruction or shortly after, the fee earner raises the question: do you have cover in place for the new mortgage, and would you like an introduction to a regulated adviser? Consent is recorded on the file. The introduction goes across while searches are running — dead time for the client, working time for the adviser. The fact-find and recommendation typically conclude around exchange, so cover can start at completion, which is precisely when the risk begins.

The commercial mechanics follow the standard pattern: the adviser earns a fee or commission on the business written, and the introducing firm receives a pre-agreed share, usually 20% to 25% of the initial amount, itemised on a commission statement that names the matter. From introduction to statement is commonly six to ten weeks — conveniently close to the length of an average transaction.

Both the SRA Codes and the CLC framework permit referral arrangements, but on conditions that are easy to meet and easier to forget. The client must be told about the arrangement and any payment your firm receives — in writing, before the referral takes effect. The referral must be in the client's interest, not driven by the fee. And the client's freedom to instruct someone else must be explicit.

Practically, that means a standard disclosure paragraph in your client care letter plus a file note per referral. Firms using a tracked network — SmartPeer, for instance, generates a disclosure letter for each introduction — find the audit trail assembles itself. What destroys these arrangements is informality: fees paid on a nod, nothing on file, no statement to reconcile. Regulators do not object to referral income. They object to referral income nobody can evidence.