Solicitors Referral Code

The world of financial planning grows ever more complex. Followers of this and my previous blog will appreciate that the financial advising community is finally going to ditch commission payments. From January there will be two types of financial adviser – restricted or independent (note one or the other). To be independent the adviser must meet the FSA’s definition of being independent – being able and competent to advise on investments of all types (except direct shares). So it is a little puzzling that the Solicitor’s regulatory body has decided not to move its definition to cope with this change, but has instead opted to potentially allow Solicitors to refer their clients to restricted advisers. To my mind, that’s not good news for clients that get a restricted option. However, this all rather depends on the experience that the Solicitor has had him or herself. Sadly, many Solicitors report that this often fairly unimpressive when it comes to dealing with advisers. So perhaps it isn’t too surprising. However, my experience of Solicitors is that most want their clients to get impartial advice, which means independent advice, so I imagine that despite the noise in the financial pages, most Solicitors will continue to see independent advice as best advice and best practice.

UPDATE: 29 November 2012: Law Society

The Law Society has urged Solicitors to ignore the advice from the SRA allowing them to select restricted advisers. It seems that the professional body “gets it” but the regulator doesn’t. Where have I heard that before…