A referral income guide for HR consultants: from introduction to commission statement

Consider a redundancy exercise. Thirty employees, each with a settlement — the first £30,000 of a genuine termination payment typically tax-free — plus pension decisions, loss of death-in-service cover, and no idea what to do about any of it. Or consider the other end: a senior hire negotiating a package, asking questions about the pension scheme that neither you nor the employer can lawfully answer with a recommendation.

HR consultants live at these junctions. Employees ask you things because you are the human face of the process. Employers ask you because you are their outsourced expertise. And the honest answer to should I take the enhanced pension option is one none of you are authorised to give.

An introduction to a regulated financial adviser solves the problem cleanly. The employee gets real advice, the employer discharges a duty of care, and you remain squarely inside your professional remit. That introduction can also, quite legitimately, be paid.

Strip away the jargon and the structure is four steps. The individual consents to being introduced — never pass on employee details without it, for data protection reasons as much as courtesy. The adviser conducts a fact-find and produces a recommendation; the regulatory responsibility sits entirely with them. If the individual proceeds, the adviser earns an initial fee. A pre-agreed share of that fee — commonly 20% to 25% — is paid to you as introducer, evidenced by a commission statement naming the case.

Timelines vary by product. Protection cases can complete within a month; pension work often runs eight to twelve weeks. For workforce-level events like a redundancy programme, some advisers will run group guidance sessions first, with individual advice offered afterwards — a format employers tend to like because it looks like support, not selling. Which, done properly, is exactly what it is.

Nothing corrodes an HR consultant's standing faster than a hidden commercial interest, so the disclosure rules here are as much self-preservation as compliance. Tell the individual, in writing, that you may receive a fee if they take up the introduction and proceed. Tell the employer too, if the referral arises from an engagement they are paying for — surprises in this area end retainers. Keep the record.

Two further disciplines matter. Verify the adviser on the FCA Register before you ever pass a name across; it takes two minutes and it is the whole basis of your reassurance to the employee. And keep a simple log — who, when, consent, outcome — so every commission statement reconciles to a real introduction. Platforms such as SmartPeer track referrals and generate the disclosure letters automatically, which suits consultants juggling multiple client sites. The income is worth having. The audit trail is what makes it durable.