The Solicitors Regulation Authority is consulting on whether to change its requirement for solicitors to refer clients to independent financial advisers for investment advice.
The SRA plans to launch the 12-week consultation following its board meeting on July 4.
Currently, the SRA’s code of conduct states solicitors can only refer clients who need investment advice to independent intermediaries who can advise on investment products from across the whole of the market and offer a fee option.
An SRA spokesman says: “The SRA is looking to go out to consultation, with the board’s approval, from July 4. There are a number of options on the table, which we will announce on that date.”
Personal Finance Society chief executive Fay Goddard believes the SRA should allow referrals to independent and restricted advisers who do not have any contractual ties to providers. She says: “The real meaning of independence is that the adviser has no conflicts of interest or contracts that influence its ability to act in the best interests of clients.
“We think it would be a sensible solution for the SRA to allow referrals to these advisers, whether they fall under the FSA’s new independent or restricted labels.”
But Sifa managing director Ian Muirhead (pictured) says: “Solicitors will be disinclined to spend time researching firms’ contractual arrangements. The requirement for solicitors to refer clients to IFAs should remain in place.”
Aegon head of regulatory strategy Steven Cameron says the company has had many enquiries from IFAs about whether they will be able to continue to accept solicitor referrals after the RDR.
He says: “Advisers need clarity on this issue as soon as possible, so they can decide whether to go down the independent or restricted route.”