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SJP forced to change guidance on solicitor referrals

St James’s Place has been forced to issue new guidance to its partner firms after the Solicitors Regulation Authority confirmed that referrals by solicitors for investment advice can only be made to IFAs.

SJP has advised its firms that solicitors can only refer clients to independent advisers for investment advice, however it states that referrals for non-investment advice can still be made.

Last month the SRA released clarification of its rules on advice referrals from solicitors for investment advice, which excludes all tied and multi-tied advisers from receiving referrals.

The clarification follows heavy pressure from Sifa which says it had anecdotal evidence of SJP advisers, in particular, pushing for referral business from solicitors.

The guidance, seen by Money Marketing, says: “The guidance from the SRA states that where the client or solicitor determines that the client requires ‘investment advice’ the solicitor can only refer to an independent intermediary. The SRA view this as an adviser who can advise on products from across the whole of the market and offers the client the option of paying fees.”

But the guidance goes on to state that solicitors can continue to refer clients to SJP partners for a “wide range of advice” including advice on inheritance tax planning, trusts, business succession planning, long term care, protection, general insurance or mortgages.

An SJP spokeswoman says: “Our guidance remains in line with the rules regarding solicitors’ introductions, but we have updated it to take account of the further guidance issued recently by the SRA.”

In March 2007 the representative body for solicitor IFAs Sifa wrote to the SRA warning that St James’s Place may have been persuading solicitors to break Law Society rules and refer business to its multi-tied agents.

Sifa said there was widespread anecdotal evidence that SJP was promoting itself as being eligible to receive referrals from solicitors. SJP denied the allegations.


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