Solicitors' requirement to refer clients to IFAs could end with the RDR
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The Personal Finance Society says rules requiring solicitors to refer clients to an IFA for investment advice may be amended due to the RDR.
The PFS’s professional direction paper on independent and restricted advice, which was published this week, suggests the Solicitors Regulation Authority’s solicitors’ code of conduct, which states that solicitors can only refer clients to IFAs, could be changed in the wake of the FSA’s changes to the definition of independence.
It also notes that from October, the Legal Services Act will allow non-law firms such as IFAs to link up with solicitors and set up referral arrangements.
The PFS says: “Following the introduction of the Legal Services Act there is closer collaboration between law firms and financial planners.
This, combined with the fact that many existing relationships may be jeopardised by the new standards for independence created by the FSA, has encouraged dialogue between numerous stakeholders which may lead to a change in policy after the RDR.”
Axxis Financial Planning director Owen Wintersgill says: “Solicitors owe it to their clients to refer them to IFAs.”
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