How to disclose a referral fee to your client

Most professionals dread the disclosure moment because they imagine it as a confession: I should mention… I get paid for this. Clients don't hear it that way. What a client hears, when it's done well, is: this person has a proper process, tells me everything, and has nothing to hide.

Estate agents don't apologise for fees. Neither should you.

A workable disclosure covers four things, briefly:

• The fact. If you proceed with the introduction, our firm may receive a commission.
• The payer. It's paid by the firm we introduce you to — not added to what you pay.
• The independence point. You're free to use anyone; our recommendation isn't conditional.
• The record. We keep a note of this disclosure, as our professional body expects.

Four sentences. Sent at the point of referral — not buried in page nine of an engagement letter from 2019, though having it there as well does no harm.

Disclose before the client is contacted by the firm you're introducing. Keep the evidence with the referral, not in a drawer. If you're doing this at any volume, template it — one letter, merge fields, done. (SmartPeer generates a disclosure letter automatically for every referral, on your letterhead, because members kept asking. But whether you use a platform or a Word template, the principle is identical: consistent wording, every time, evidenced.)