The payment of referral fees by conveyancers has no adverse impact on consumers, concludes a study recently published by the Legal Services Board.
The study goes a step further and confirms that conveyancers that pay fees tend to invest more in technology and training, provide a higher quality service and charge clients lower fees.
This is excellent news, as it acknowledges that the business model adopted by large and well resourced conveyancing firms results in a better deal for clients.
But the use of the term ’referral fees’ makes me uneasy. It implies brokers are simply being paid for referring a client and doing little else, which is not true.
Our experience is that brokers play a fundamental role in helping cases move from offer to completion, and that they do far more than simply refer clients. So it’s only right that brokers are rewarded for the work they do.
They’re paid a fee by lenders and have the right to be rewarded in the same way by conveyancers.
But what should referral fees be called? The Solicitors Regulatory Authority refers to them as ’financial arrangements’, which makes sense. The key issue is that any such arrangements are fully disclosed to clients.
Over the past 25 years, I have not received a single client complaint about paying fees to intermediaries. We always tell clients about the important role they play in helping their case move to completion.