Solicitors referrals to financial advisers

December 10th, 2012 by

The following two tabs change content below.
Dan Woodruff

Dan Woodruff

Certified Financial Planner at Woodruff Financial Planning
I want to show you how to become financially secure so you can live your dreams. I do this through the process of Financial Planning & Investment Management. I am based in Colchester, Essex.
Dan Woodruff

Latest posts by Dan Woodruff (see all)

Share this...

solicitors referrals to financial advisersLast week the Solicitors Regulation Authority (SRA) announced that after its recent consultation, it would now permit solicitors to make referrals to restricted financial advisers.  This is a change to the previous stance that stated that solicitors should only make referrals to independent financial advisers. From January 2013 to be called independent financial advisers will mean that the firm examines a broader range of investment products than is true at present. Restricted advisers will not need to meet these requirements, although of course may choose to do so anyway.

Key points:

  • The SRA will now permit solicitors to make referrals to restricted financial advisers
  • Why you might consider your position on this matter
  • Key points about the retail distribution review

Naturally, this has prompted debate in the financial adviser community, with most independent financial advisers claiming that independent financial advice is the best standard of advice available.  In addition, the Law Society has urged solicitors to avoid referrals to restricted advisers for fear of being caught up in future scandals. This may or may not be true, but masks the real issue to solicitors.  Most solicitors make referrals to financial advisers who they trust and if they are confident will act in the best interests of their clients.  They also tend to want to deal with financial advice firms which have similar values to their own.  We doubt whether independence is the only issue that solicitors look at.

To be clear, we will remain as independent financial advisers next year when the Retail Distribution Review takes effect. Our message to solicitors is not to carry on as before, but to examine the relationships that you have with financial advisers, since most financial advisers are being forced to change.  There is likely to be a big shake-up in the way financial advice is to be delivered from 2013, and this could mean that some financial advisers (independent or restricted) will have major issues with the way they work.

The retail distribution review – what you need to know

  • Financial advisers will be required to have a higher level of qualification
    We are already far in advance of the required level.
  • Financial advisers must agree their remuneration with clients
    We already meet the requirements, and have done so for 5 years.
  • Clearer definition between independent and restricted advisers
    Essentially advisers must be independent or restricted. We will remain independent.
  • Higher professional standards
    This is to be applauded, and we already meet the standards required through our membership of the Institute of Financial Planning.

We have worked in the way that the regulator expects for many years, and see the changes as business as usual.  More importantly, we see our services as neatly matching the requirements of clients typical to solicitors – especially if those clients have some major change in their lifestyle. See our client case studies which describe cases of solicitors referrals to financial advisers:

Picture credit: Flickr> Aiden Jones

Share this...

Tags: , , , , , , , ,

Leave a Reply