The intermediary market has become increasingly crowded with conveyancing distributors meaning that brokers now have more choice than ever before. However, unlike other products such as mortgages, protection and insurance, conveyancing should not be treated as a commoditised product. In this regard, when brokers are looking at their client’s conveyancing options they are not selling a product but a service. Price will obviously be an important factor yet intermediaries should also be asking what their clients get for their money.
When choosing a conveyancing distributor, brokers need to consider what is important to them. Is it customer service, having access to the case owners, value for money, consistency, the ease of submission, getting paid or simply all of the above?
When reviewing the variety of business to business conveyancing distributors on offer, brokers should be clear about the added value they may or may not be receiving. The quality distributors will understand the needs of the intermediary and be focused on meeting all those needs. Brokers should therefore be aware of the way in which today’s distributors go about adding value.
Service standards
Firstly, driving up service standards is a fundamental role for a distributor. After all, the quality of service is probably one of the most important things a broker will look for. So the distributor’s role is to manage, control and deliver consistently high service standards. To achieve this it is logical for a distributor to set clear service expectations to the firms on its panel that reflect the brokers’ needs. But that’s the easy part; they must then police the adherence to those expectations and actively manage relationships with panel solicitors. The more solicitor firms on a distributor’s panel, the harder it will be for the distributor to control service – CAL, for example, has opted for a panel of 15 solicitor firms which means we can manage the relationship closely and put service at the top of our list of priorities.
Competition and volume will naturally create better prices. By going through a distributor the broker will almost certainly get a better price than going direct. Yet distributors must beware - they also need to add value to the solicitors on their panel. If they are forced too low on price it becomes unprofitable and service will slip. We have all heard stories of distributors paying less than £50 to panel solicitors for a remortgage and I think we all know that cheapest is rarely best.
Fees also need to be upfront and transparent. Many headline prices may look good but the endless list of ‘add ons’ and so-called disbursements can often make the overall deal uncompetitive and certainly confusing. Distributors should do much more in this area to create clarity and transparency in pricing.
Income streams
Given the current market conditions, brokers certainly need to make the most of all their income streams. Many distributors now have flexible ‘referral fees’ allowing brokers in effect to select their own commission. But who pays the commission and how quickly? A good distributor will pay out commission within a few days of completion but we should not forget they also rely on their solicitors to be quick and efficient payers too. Those who manage solicitors relationships well will figure best here. Another point to bear in mind is that conveyancing fees contain VAT - a good distributor will take care of the VAT for non-VAT registered intermediaries.
All brokers are now au fait with technology and are used to submitting and tracking business online. Conveyancing should be no different and while most distributors have some sort of online instruction and case tracking available, in most cases it is smoke and mirrors. Many rely on solicitors or administrators to re-key case information and milestone updates meaning that when a broker submits a case online, they are simply sending an e-mail with written information that must then be re-keyed by an administrator. This can cause delays and errors and means that when cases are progressing the administrator must remember to update the distributor’s case tracking site.
The distributors of the 21st Century use system integration to avoid this muddle which is less complicated than it sounds. CAL, for instance, has a simple online system that integrates with all panel solicitors - it means the business can be transacted more quickly, accurately and in theory at lower cost.
Cost
So it’s clear that a quality conveyancing distributor has a lot to deliver, however someone must pay for it. We have seen in the packaging sector that many distributors earned more than the lenders or the brokers in many cases. This is why it is important for the conveyancing fee income to be shared equitably. The solicitor carries out the work, the broker sells and the distributor facilitates the deal. It is now a common complaint that distributors earn more out of a deal than the solicitor which to our mind is simply profiteering at the expense of vulnerable solicitors. A good distributor will make sure the solicitor’s fees are sustainable for them to be able to deliver an acceptable if not superior service. Any savings that are made should be reflected in the client’s fee and not swallowed up by the distributor
In conclusion, brokers should choose their distributors carefully. Asking them pertinent questions will reveal just how many of the boxes they tick. The market is tough and the distributors who survive will be the ones that manage relationships well and focus on the ever-developing needs of the intermediary.
