Research Confirms Broker Fees Don't Disadvantage Consumers
Published: 25/05/2010
Conveyancers who pay referral fees provide a faster and higher quality service and charge lower fees to clients, than firms who don’t pay referral fees, is the conclusion reached by an independent research study undertaken on behalf of the Legal Services Board.
The research was commissioned to investigate the impact of referral fees on the quality and cost of services provided by conveyancing firms. Not only did the research conclude that referral fees have not had any detrimental effect on consumers, but it highlighted that consumers get a better deal from firms which do pay a referral fee.
Specifically, the research showed that the average conveyancing fee when a referral fee is paid is £543, whilst the price when no referral fee is paid is £687. What’s more, customer satisfaction amongst fee paying firms was high at 90% and 57% of estate agents said that firms who pay fees provide a faster service than those who don’t. The research concluded that firms who pay referral fees invest in technology to increase efficiency and these efficiency gains are then passed on to consumers.
Eddie Goldsmith, Senior Partner at Goldsmith Williams, said: “I welcome the conclusions of this report because it shows that the model of a large well resourced specialist conveyancing firm such as Goldsmith Williams, has been officially recognised as providing a top quality service to clients whilst working as a team with the intermediary Market.
“I have always resisted the use of the term ‘referral fees’ because it implied that intermediaries are paid simply for referring a client and doing little else, which isn’t true. Goldsmith Williams is unique in that we have always worked closely with introducers, who play an important role in helping a case move from offer through to completion. We believe, therefore, that it’s only right that intermediaries are properly rewarded for the considerable amount of work they do. After, all they are remunerated by lenders and should also have the right to be remunerated by conveyancers.
“Interestingly, the Solicitors Regulatory Authority prefers to use the term ‘financial arrangement’, which makes far more sense to me. The important point is that any financial arrangement between an intermediary and a solicitor must be properly disclosed to the client and as long as it is, clients have nothing to fear. On the contrary, the research published by the Legal Services Board shows that clients usually have much to gain.
“Over the past 25 years Goldsmith Williams has not received a single client complaint about the payment of fees to intermediaries and we always ensure we make clients aware of the work which is undertaken by their broker.”
Content correct at time of publication