How conveyancers can offer financial-advice referrals without becoming regulated

A house purchase is the largest financial transaction most clients ever make, and the conveyancer is standing next to them when it happens. New mortgage of £280,000; no life cover mentioned anywhere in the file. First joint purchase; no wills. Buy-to-let completion; landlord clearly accumulating a portfolio with no structure around it. The advice needs are not hypothetical — they are sitting in the matter file.

But conveyancers cannot meet those needs directly. Advising on mortgages is regulated under FSMA and the FCA's MCOB rules; recommending life or critical illness policies falls under insurance distribution regulation; investment and pension advice needs its own permissions. A conveyancer who says “you ought to take out decreasing term cover for this mortgage” has stepped over the perimeter, however sensible the observation. The compliant move is the introduction, not the recommendation.

Conveyancers are unusual among introducers: their own regulators have detailed views on referral arrangements.

• SRA-regulated firms must ensure referral arrangements are in the client's best interests, and any financial benefit received for a referral must be disclosed to the client. The ban on referral fees applies to personal injury work — not to introductions to financial advisers — but transparency obligations apply to everything.
• CLC-regulated conveyancers face equivalent duties: informed clients, disclosed arrangements, no compromise of independence.
• Both expect the receiving adviser to be genuinely suitable — which means checking the firm on the FCA Register before the first referral, not after a complaint.

Disclosure works best blunt and early: a line in the client care letter stating the fee in pounds. Buried percentages help nobody, least of all the firm at audit time.

Most conveyancing firms refer occasionally and randomly — whichever fee earner remembers, whichever adviser last bought lunch. The waste is considerable. A firm completing 300 purchases a year might see 100 clients with an obvious protection gap and dozens more needing wills or broader advice; a handful get referred, the rest complete and disappear.

A system changes the economics: a standard paragraph in the completion letter, a vetted panel of two or three advice firms, a disclosure template, and a log of referrals and outcomes. The log satisfies the regulator's curiosity and reveals the firm's actual referral volume — usually a surprise. Platforms such as SmartPeer exist for this purpose, tracking referrals and generating the disclosure letters as they go. Wills and estate needs spotted at completion can be routed the same way, to a will specialist or estate planner rather than left to good intentions.