How estate agents can offer financial-advice referrals without becoming regulated

Completion day releases money. Sometimes a lot of it. A couple downsizing from a four-bed to a coastal flat can walk away with £250,000 in cash and no plan for any of it. They will ask someone what to do — and the person standing nearest is usually you.

First-time buyers ask whether to fix for two years or five. Sellers in their sixties ask about equity release. Landlords ask whether to sell before the next tax change. None of these are questions an estate agent can legally answer. All of them are questions an estate agent can hear, acknowledge and route somewhere useful.

Agents who do that well become the first call for the next move too. Agents who mumble something vague lose the moment. There is a third option: a proper referral, done properly.

Advising on investments, pensions and most mortgage business is regulated under the Financial Services and Markets Act 2000. Doing it without FCA authorisation is a criminal offence carrying, in principle, up to two years in prison. Sounds terrifying. In practice the line is clearer than most agents assume.

Saying 'you should put that equity into drawdown' is advice. Saying 'that is one for a regulated financial adviser — I know one, shall I introduce you?' is an introduction, and simply introducing someone to an authorised firm is not, by itself, a regulated activity.

The test is steering. No product names. No 'if I were you'. No forwarding illustrations with your opinion stapled on. Make the handover, then step back.

Estate agency has lived with referral-fee transparency since National Trading Standards published its guidance in 2019: if you receive a fee for referring conveyancing or mortgage services, you disclose it in writing before the client commits, including the amount or a realistic estimate. The Consumer Protection from Unfair Trading Regulations 2008 sit behind that guidance with real teeth.

Financial-advice referrals deserve exactly the same treatment. Tell the client three things:

• You may receive a fee if they proceed.
• Roughly how much, or how it is calculated.
• They are free to choose any adviser they like.

That single paragraph, sent before the introduction, converts a grey area into a documented, defensible process. It takes ninety seconds.

First, check the adviser on the FCA Register — it is free, public, and takes two minutes. An unauthorised 'adviser' is a problem you do not want your name attached to.

Second, make a warm handover: a three-way email beats handing over a phone number, because introductions that require the client to do the chasing convert poorly. Industry folk wisdom says fewer than half of cold 'here's a number' referrals ever result in a meeting.

Third, put the disclosure in writing and keep a copy. Fourth, follow up once. Referral platforms such as SmartPeer track each introduction and generate the disclosure letter automatically, which keeps the paper trail tidy without adding admin.

Boring first. Clever later. That is the whole method.