How to Build a Compliant Referral Panel for Your Firm

Building a Compliant Referral Panel for Your Firm

13 February 2026 — by James Valentine

A practical guide to setting up and managing a referral panel, from choosing the right IFA and solicitor partners to due diligence, fee arrangements, and measuring performance.

What is a referral panel and why your firm needs one

A referral panel is a curated group of trusted professionals your firm refers clients to. It typically includes independent financial advisers (IFAs), solicitors, mortgage brokers, insurance brokers, and other specialists your clients need.

Most firms already make referrals. The question is whether they do it systematically or ad hoc.

Ad-hoc referrals create risk. Individual partners refer clients to whoever they know personally. There is no central record of who the firm works with. No due diligence. No consistency in client experience. No way to track outcomes.

A structured panel solves these problems. It gives your firm:

• Consistency - Every client receives a referral to a vetted professional, regardless of which partner they work with
• Compliance - Due diligence is done once, properly, and documented for the whole firm
• Visibility - The firm can see who it refers to, how often, and what happens next
• Commercial clarity - Fee arrangements are agreed centrally, not negotiated partner by partner
• Quality control - Underperforming partners can be identified and replaced

For regulated firms - accountancy practices, law firms, financial advisers - a structured panel is not just good practice. It is increasingly what regulators expect to see.

Choosing referral partners: IFAs, solicitors, mortgage brokers, insurance brokers

Each type of referral partner brings different considerations. Here is what to look for.

Independent financial advisers (IFAs)

• Check they are authorised on the FCA Register
• Confirm whether they are independent or restricted (this matters - see below)
• Assess their specialisms - do they serve the same client profile as your firm?
• Ask about their complaints history and client retention rates
• Review their approach to ongoing advice and annual reviews

Solicitors

• Verify their status on the SRA website
• Check for any regulatory findings or conditions on their practising certificate
• Assess their practice areas - wills and probate, commercial property, family law
• Consider their response times and client communication style
• Ask for references from other professional firms they work with

Mortgage brokers

• Confirm FCA authorisation for mortgage advice
• Check whether they offer whole-of-market or restricted advice
• Assess their turnaround times - your clients will judge you on their experience
• Ask about their protection advice capability (life insurance, income protection)

Insurance brokers

• Verify FCA authorisation
• Check their product range - commercial, personal, specialist
• Assess their claims handling reputation
• Ask about their renewal process and ongoing client support

For all partner types, consider alignment with your firm's values. Your clients will associate the partner's service with your recommendation. Choose firms you would trust with your own affairs.

Due diligence on referral partners

Due diligence is not optional. It is a regulatory expectation for any firm that refers clients to third parties.

Your due diligence process should cover:

FCA Register checks (for financial advisers and mortgage brokers)

Search the FCA Register to confirm the firm is authorised and regulated. Check what permissions they hold. Note any past enforcement actions or requirements.

SRA verification (for solicitors)

Use the SRA website to verify the firm's status. Check for any conditions, warnings, or regulatory decisions.

Companies House checks

Review the firm's filing history, accounts, and director information on Companies House. Look for any red flags such as late filings, county court judgements, or frequent director changes.

Professional indemnity insurance

Ask for evidence of current PI insurance. Confirm the level of cover is appropriate for the work they do. This protects your clients and your firm's reputation.

Complaints history

Ask the firm about their complaints record. Check for any Financial Ombudsman Service decisions (for financial advisers) or Legal Ombudsman findings (for solicitors). A firm with a pattern of upheld complaints is a risk to your clients.

Documenting your due diligence

Record everything. Your due diligence file should include:

• The date of each check
• What was checked and the result
• Who carried out the check
• When the next review is due

ICAEW monitoring reviewers will ask to see this documentation. Having a clear, dated record demonstrates that your firm takes its obligations seriously.

Independent vs restricted financial advisers - the accountant's guide

This distinction matters more than many accountants realise. It affects your clients and your firm's reputation.

Independent financial advisers

An independent adviser can recommend products from the whole market. They are not tied to any provider or limited range. They must consider all relevant options before making a recommendation.

For your clients, independence means the advice is based on the full range of available solutions.

Restricted financial advisers

A restricted adviser is limited in some way. They may only advise on products from a single provider, a limited panel, or a specific type of product. This is not inherently problematic - many excellent advisers operate on a restricted basis - but your clients need to understand the limitation.

Why this matters for your firm

If you refer clients to a restricted adviser without explaining the restriction, you create a risk. The client may assume they are receiving whole-of-market advice. If the recommendation turns out to be unsuitable, the client may hold your firm partly responsible for the introduction.

Best practice:

• Know whether each adviser on your panel is independent or restricted
• Disclose this to the client as part of the referral
• Consider having both independent and restricted advisers on your panel for different client needs
• Document the adviser's status as part of your due diligence

Setting up commercial terms and fee-sharing arrangements

Most referral panels involve some form of commercial arrangement. Getting the terms right protects both parties and satisfies regulatory requirements.

Types of fee arrangement

• Fixed fee per referral - A set amount paid for each introduction, regardless of outcome. Simple and predictable.
• Percentage of initial fees - A share of the fee the receiving firm earns from the client. Aligns incentives but requires transparency.
• Ongoing trail commission - A recurring payment for as long as the client remains with the receiving firm. Can generate significant long-term revenue but requires careful management.

What to include in your agreement

A written referral agreement should cover:

• The fee structure and payment terms
• Data protection responsibilities (who is controller, who is processor)
• Confidentiality obligations
• Termination provisions
• Complaint handling procedures
• Regulatory obligations - including the requirement to disclose fees to clients
• Service level expectations

ICAEW requirements

For ICAEW-regulated firms, the Code of Ethics requires that referral fees are disclosed to clients. Your commercial agreement should reflect this. Both parties should understand that the fee arrangement will be transparent to the client.

Do not enter into arrangements where the receiving firm asks you not to disclose the fee. This is a regulatory red flag.

Onboarding partners and managing the panel

A referral panel is not something you set up and walk away from. To keep it effective and compliant, you need to actively manage it from day one.

What to do when onboarding a new partner

1. Run due diligence first - Check their regulatory status, PI insurance, and complaints history before any referrals are exchanged
2. Get the referral agreement signed - Cover commercial terms, data protection responsibilities, and service expectations in writing
3. Put a data sharing agreement in place - This is a legal requirement under UK GDPR whenever you share client information with a third party
4. Walk the partner through your referral process - Explain what information you will share, how you track referrals, and what you expect in return
5. Introduce them to the right people in your team - Everyone who might make or receive a referral should know who the partner is and how the process works

What to do on an ongoing basis

• Hold regular review meetings - Meet at least quarterly with each panel partner. Go through referral volumes, client feedback, and anything that needs fixing.
• Refresh your due diligence annually - Re-check regulatory status, PI insurance, and complaints history at least once a year. Do not let it lapse.
• Set clear performance expectations - Agree on response times, how quickly clients should be contacted, and how outcomes are reported back to you.
• Have a clear exit process - If a partner underperforms or concerns come up, you need a documented way to remove them from the panel. Build this into your agreement from the start.

Make sure someone owns it

Appoint one person in the firm to be responsible for panel management. They should keep the due diligence records up to date, schedule review meetings, and be the go-to contact for anything panel-related.

Without clear ownership, things drift. Partners get added informally. Due diligence lapses. Reviews stop happening. This is exactly the kind of situation regulators flag during monitoring visits.

Or, you can use RQ to handle all of this out of the box. RQ gives you a structured panel with built-in due diligence tracking, automated review reminders, and a complete audit trail, so nothing slips through the cracks.

Measuring panel performance

You cannot manage what you do not measure. Tracking panel performance serves both commercial and compliance purposes.

Key metrics to track

• Referral conversion rate - What percentage of referrals result in the client engaging with the partner? Low conversion may indicate a mismatch between your clients and the partner's services.
• Client satisfaction - Do clients report a positive experience with the partner? Negative feedback reflects on your firm.
• Complaint rate - How many complaints arise from referrals to each partner? A pattern of complaints is a serious red flag.
• Revenue generated - What is the commercial value of each partnership? This helps you focus on the relationships that matter most.
• Response time - How quickly does the partner contact the client after receiving the referral? Delays frustrate clients and damage your firm's reputation.
• Outcome reporting - Does the partner report back on what happened? This is essential for your audit trail.

Why tracking matters

From a compliance perspective, tracking demonstrates that your firm actively manages its referral relationships. ICAEW monitoring reviewers want to see evidence of oversight, not just a list of partners.

From a commercial perspective, tracking helps you identify which partnerships generate the most value. It also helps you spot problems early - before they become complaints or regulatory issues.

Technology to centralise panel management

Managing a referral panel across spreadsheets, emails, and shared drives is common. It is also fragile. Information gets lost. Records are incomplete. Nobody has a single view of the whole panel.

Platforms like RQ centralise panel management in one place. You can see every partner, every referral, every outcome, and every fee - alongside the due diligence records and consent documentation that regulators expect.

Tools like Compass also help firms identify which clients need referring, so referral opportunities are not missed during routine client meetings.

The benefit is not just efficiency. It is auditability. When everything sits in one system, you can produce a complete record of your referral activity for any review period - in minutes, not days.

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