Aims and method To compare the cost and quality of a memory-clinic-based service (MCS) with a traditional community mental health team (CMHT) service. Using a retrospective case-note review, we studied two groups, each with 33 participants. Consecutive referrals for diagnostic 'memory' assessments over 4 months were evaluated. Participants were evaluated for up to 6 months. Results The MCS was less costly than the CMHT service but the difference was not statistically significant (mean cost for MCS was £742, mean cost for CMHT service was £807). The MCS offered more multidisciplinary and comprehensive care, including: pre- and post-diagnostic counselling, more systematic screening of blood for reversible causes of dementia, more use of structured assessment instruments in patients/carers, signposting to the third sector as well as more consistent copying of letters to patients/carers. Clinical implications An MCS service offered more comprehensive and multidisciplinary service at no extra cost to secondary care.