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Soliciting business

Sifa, the representative body for solicitor IFAs, has long been campaigning to stop St James’s Place touting for referral business from solicitors passing on clients for financial advice.

They have now scored a victory in the form of clarification from the Solicitors Regulation Authority, which said that solicitors may only refer clients to independent financial advisers for investment advice.

On the back of this clarification, St James’s Place issued new guidance to its partner firms conceding that they cannot provide investment advice to clients referred to them by solicitors.

The guidance acknowledges that the SRA views an independent adviser as one who can “advise on products from across the whole of the market and offers the client the option of paying fees”.

But it also stresses 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 and mortgages.

Sifa managing director Ian Muirhead says: “This is a major step forward but clearly the war is not yet over because SJP are still encouraging their salespeople to provide advice to solicitors on matters such IHT planning and trusts. It seems extremely unlikely that the salespeople for a company where 90 per cent of its income comes from the sale of its own investment products will be able to provide advice without also making a sale.

“So solicitors are likely to continue to be confused and IFAs need to keep up the pressure on SJP by reporting breaches to Sifa and emphasising the benefits of their own independence.”

Do you think it is plausible that a product driven multi-tied salesforce is the appropriate place to refer specialist advice on inheritance tax and long-term care?

How do you think firms such as St James’s Place will position themselves post-RDR?

Post your comments below.


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There are 11 comments at the moment, we would love to hear your opinion too.

  1. Soliciting business
    Of course SJP will continue to drive a “coach and horses’ through the rules. Interesting that Solicitors who refer to them can even claim to be acting in their clients best interest.

    I am appalled that given all of the water that has gone under the bridge since polarisation this is still going on.

    As I have said before will the last person to leave the industry please turn the lights off, it’s either that or the fightback must start soon.

    Richard Smith

  2. Sjp & solicitors
    Isn’t it true that Sjp guarantees it’s advice!

  3. Soliciting business and St James Palce
    As if this is going to stop the “professional” solicitors referring business to their pals at SJP.

    These are relationships that have been built over many years with significant amounts being passed from SJP to solicitors. It is well known that this is one of the main reasons as to why it is hard for new model advisers to form relationships with solicitors who already have established (SJP) connections.

    Most people are only interested in themselves and will do what is right for them above what is right for their client….so this will continue for sure.

  4. Deja vu..
    …how many times did the Law Society tell their members to refer to IFAs only to see them sending poor souls to Equitable Life? Do lawyers give a fig? One of my former clients rang the evening the decision against the life office regarding GARs was made, he was in a panic, a year or so previous one of his law school friends had persuaded him to put a big wad of cash in an Equitable Life WP bond, against my advice of course… a year or so later he had the cheek to call me again because this same ‘friend’ was now an SJP ‘adviser’ who persuaded him to transfer all his holdings with various life offices and UT providers and guess what, he had heard that the FSA had fined them for ‘replacement sales’. I thought that was CHURNING. Oh, did you know that the man who set up SJP, Allied Dunbar and others was the ‘architect’ of the LAUTRO assumed expenses fiasco, take a guess why.

  5. SJP and Solicitors
    of course SJP guarantees the advice….i would not exepct nothing less from SJP, but there again the direct sales forces of the banks also guarantee the advice of the advisors on an equally tied basis!

  6. “guarantee”
    Who owns SJP? No different to any other firm owned by a bank or insurer, if the firm has no funds to meet the guarantee, it si not worth the paper it is wtitten on as it the the FSCS the levy on ALL FS firms any failure then falls on.
    I could say I guarantee all the advice I give, but it would only be guarnteed to the level of my companies assets.
    IHT and tax advice is not a regulated activity as far as the FSA is concerned and bearing in mind teh drafting of a trust and it’s appropriateness to an individual is a legal issue, I am surprised that solicitors are passing the legal advice to advisers to handle.
    I’ve just sat the CII Trust exam JO2 and I’d never choose to draft a trust myself. I might use an insurer’s standard trust, but for larger cases, I refer the trust work BACK to the solicitor for them to either draft a bespoke trust OR to confirm a standard trust from an insurer matches the intentions of the client and their needs. That is because I advise on FSA REGULATED services, I do NOT provide legal or tax advice as I am NOT a legal or tax expert whether I pass JO2 or NOT.
    With regard solicitors introducing to mortgage and protection specialists, whilst independant is not a definition for mortgages, Whole of market certainly is and if the solciitor is acting as agent of the client and not the representative, then surely they shoudl only introduce to Whole of Market Mortgage adviser’s and protection specialists who do the enarest definition there is to protection whole of market (which stupidly does not exist in the FSAs rules, and when I say STUPIDLY, I mean stupidly as this is yet anotehr reason why clients are confused by the FSA stance on things)
    And don’t get me started on the different definitions of whole of market the FSA allow which is a complete cop out.

  7. SJP and regulations
    Abbey Life/Allied Dunbar/Rothchilds/St James Place. All out for a tidy margin I would say. The trouble is, the people who work(ed) for most of these companies, ended up with massive debts in advance commissions when they leave/left. Sooner we remove commission only salespeople completely and operate on a level playing field the better. Whole of market every time I am afraid.

  8. Soliciting business
    Yet another example of poor regulation where it matters by the FSA!

    They’re too busy ticking boxes and making petty rules which are easier to enforce. When it comes to having the balls to take on a large company (with a high end legal representation) they turn a blind eye, or chicken out.

  9. SJP and Solicitors
    Is that sour grapes I can hear or just a little w(h)ine?
    Perhaps a more pertinent question to ask might be: how many “IFAs” will choose to remain independent post-RDR when the knowledge requirements will be more far-reaching than they are currently?

  10. St.James’s Place
    I had the unfortunate experience of being lured to join the promised land of St.James’s Place two years ago. I was told that as long as I earned over £32k I would not even notice I was not an IFA any longer, nothing could be further from the truth. They are nothing more than a high pressure, modern day Allied Crowbar. They harp on about how much they are loved by their clients, which is total nonsense and they also say they look after wealthy people, well that is a load of bull too. They may target wealthy people and professionals but such is the relentlessness of their targetting of doctors, that they recently informed the salesforce to start reporting which doctors they were targetting for business as there were so many complaints coming in as some doctors were being contacted by as many as 20 different St. James’s Place salemen in a single week. Laughingly they said they didn’t want their professional image to be marred but speaking to a couple of doctors I know, they said they are nothing more than a high charging, high pressure sales company, which in their opinion, they thought was what the FSA was trying to stamp out. A girl I know works as an appointment maker for 3 succesful partners at St. James’s Place. She recently asked me to arrange her mortgage and insurances for her. I asked if she wanted me to do it so that she did not have to choose from 1 of the 3 salesmen she worked for and she ireplied that ‘under no circumstances would I ever conduct business with any of them as in the 3 years she had worked in the office, on literally hundreds of occasions while trying to arrange appointments for the 3 stooges, she had been told in no uncertain terms what professionals really thought of the golden boys from St.James’s Place, and it couldn’t be printed without an offensive language warning on this message. I also had the pleasure of hearing several of their salesmen say that the only good company is the one that pays the most commission. Enough said and avoid this company at all costs.

  11. This is all rather a shame. Tied, multi tied, IFA… if you find a good adviser who thinks long term and puts clients first – which actually can earn the adviser more long term through repeat and referral business – then it doesn’t matter what they represent. I know of several mercenary commission/fee hungry IFA’s who hide behind the “independant” rhetoric. With most products these days being similarly priced, and offering links to all the major fund management houses, the old fashioned argument of always go IFA is nonsense. Find a well qualified, trustworthy adviser, test them with smaller amounts of money first if you like, and go from there.

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