Do you pay or receive referral fees?

Introductions to advisers come from accountants, lenders, software providers, trade bodies and other advisers. Some introductions are paid for. Professional rules can allow referral fees when they are disclosed to the client.1Source 1ICAEW, "Commissions and fees: fully informed consent" (United Kingdom); AICPA Code of Professional Conduct, ET section 1.520 "Commissions and Referral Fees" (United States). More detail on your country page. What matters is that you know. A referral fee is a cost that is recovered from somewhere, and it means the person who recommended the adviser may have had a reason beyond your interests to do so.

The adviser health check asks you: "Do you know whether anyone was paid for introducing you to your adviser?"

A direct answer: whether the adviser pays for introductions, whether they received one for yours, and how much. The same question answered by the person who introduced you. A willingness to put the answer in writing.

A reluctance to answer. An introduction that came with unusual urgency. A fee that seems high for the work, which may be covering an introduction. An introducer who will not say whether they were paid.

• The clause: confidentiality
• The script: asking about referral fees
• Red flag: cold calls about unclaimed refunds. Green flag: named people with qualifications you can check
• Case study: the referral nobody mentioned. Adviser health check

Sources

1. ICAEW, "Commissions and fees: fully informed consent" (United Kingdom); AICPA Code of Professional Conduct, ET section 1.520 "Commissions and Referral Fees" (United States). More detail on your country page.  Back