23 June 2011

ICAEW bids to regulate accountant-led ABSs on back of probate rights application

The Institute of Chartered Accountants in England and Wales (ICAEW) is investigating how it can license accountancy firms to become alternative business structures (ABSs) and provide legal advice to clients, Legal Futures can reveal.

The news comes with the ICAEW set to apply to the Legal Services Board for the right to regulate its members to provide reserved probate activities, which it first mooted last year.

This is what could enable the institute to apply to license accountancy firms to become ABSs in the form of multi-disciplinary practices. Though probate would be the only reserved legal work the ABS could provide, it could employ solicitors and other lawyers to deliver this and unreserved work to clients.

The latter is possible at the moment only if those lawyers give up their practising certificates.

Vernon Soare, director of professional standards at the ICAEW, told Legal Futures that the institute’s members already undertook many aspects of probate work and the application to become an approved regulator for probate would allow them “to offer a complete probate service… we’re just responding to what our members are telling us they want to do”.

Becoming an ABS would mean “a solicitor could give client-facing advice as a partner in an accountancy practice”, he added.

Mr Soare said the ICAEW was in discussions with the Legal Services Board over the technicalities of how this could all work. “We need to get a sense of what it will be like to be overseen/regulated by the board in addition to the Financial Reporting Council.”

The probate application will be made by the end of the year, but this would just be following the Institute of Chartered Accountants in Scotland (ICAS) and Association of Chartered Certified Accountants (ACCA), which have both been approved regulators for probate for some time.

However, neither has yet exercised the right to grant members the right to conduct probate.

A statement from ICAS said: “The implementation of any regulatory scheme was delayed pending similar approval to regulate confirmation [the Scottish equivalent] in Scotland. The Legal Services (Scotland) Act 2010 came into force in November 2010 and our regulation and compliance board is presently assessing the regulatory position and member demand.”

An ACCA statement said: “‘ACCA has considered the likely costs of regulating members providing probate services within the proposed oversight framework. We have identified a significant risk that regulatory compliance costs and burdens would be disproportionate to the benefits that would accrue to a minority of ACCA members. This would result in probate practitioners licensed by ACCA facing excessive licence fees to cover the compliance costs.

“Until we are clear on these issues, we believe it is right that we hold off from authorising members. We will remain alert to developments in the regulation of legal services. If it becomes apparent that oversight of approved regulators may accommodate the differences between the various professional bodies, ACCA will explore the feasibility of resuming the project in the future.”

Tags: ABS, accountants, Alternative business structures, ICAEW, Institute of Chartered Accountants, probate