Sifa managing director Ian Muirhead is calling on the FSA to consider the Legal Services Act 2007 and its implications for advisers as part of the retail distribution review.
Under the act, which is set to come into force in 2012-13, solicitors will be able to form alternative business structures combining other professions such as IFAs in one firm.
Muirhead says solicitors are increasingly forming joint ventures with advisers and believes the regulatory implications of alternative business structures will be complex, given the potential roles of professional bodies after the RDR. He says: “We mentioned this in our response to the RDR and it is something of which the FSA is well aware. At the end of this year, it will be possible for firms to take in up to 30 per cent of non-solicitor partners but the full ABS will take another three years for the simple reason that you are talking about a number of regulators having to reconcile their different requirements.
“The regulators are going to have to work out how their rules should be consolidated and applied to a mixed organisation and that is the tricky bit.”
Muirhead says it is likely that the profession with the majority of individuals in a firm will determine the regulator but each individual will also be accountable to their own regulator.
He says: “Accountancy IFAs are particularly well placed and what we are seeing is solicitor firms increasingly forming joint ventures with IFAs rather than trying to do it themselves.”