Advisers need to ensure that they are fully compliant with the changes to Newcob introduced to coincide with Mifid so as not to open themselves up to legal liabilities, says leading financial services lawyer Simon Morris.
The CMS Cameron McK-enna partner says he believes advisers are being too complacent about the changes that will take place on November 1.
He says financial promotions, duty of suitability and issues around inducements are three areas where advisers need to ensure they are abiding by the requirements.
Morris says by breaking the Newcob rules, advisers are opening themselves up to the threat of legal action from clients if things go wrong, something which is also the case with the current Cob rules.
But he believes there is a big threat that advisers are not fully aware of the rule changes and could be exposing themselves to future problems.
Morris says: “My worry is that advisers are not fully aware of the liability they could be opening themselves up to by not ensuring they are compliant with the Newcob rules when they come into force in November. This is not just about keeping the FSA happy but ensuring your firm is not exposing itself to future claims against it by clients through the Courts or the Ombudsman.”