The Solicitors Regulation Authority’s decision to change the rules on recommending financial advisers to clients has come under fire from opponents, with the Law Society taking “the unprecedented step” of urging the profession not to follow the new provisions and IFAs threatening judicial review.
The Solicitors Regulation Authority is to push ahead with controversial changes to the rules on referrals to financial advisers that will no longer preclude them from choosing those tied to particular institutions, despite opposition from the Law Society, SIFA and others.
The impact of non-lawyer investment into law firms came to the fore today as Liverpool personal injury practice Silverbeck Rymer announced plans to create 300 jobs over the next year and so more than double in size.
A Solicitors Regulation Authority proposal to scrap the ban on solicitors referring clients to tied financial advisers presents a “disproportionate risk” to both lawyers and clients, the Law Society has argued.
The Law Society has called on the government to lead a “mediated dialogue” with mortgage lenders to deliver “an amicable long-term solution” to the ongoing arguments over conveyancing panels. It has asked business secretary Vince Cable to intervene.
It is hard to see which of the frontline regulators would regulate banks if will-writing and estate administration become reserved legal activities, the British Bankers Association has said. It also said FSA regulation covered what the Legal Services Board was seeking to do.
Scrapping the ban on solicitors referring clients to tied financial advisers would “make them prey to every tied or multi-tied product salesperson in the land”, leading to massive claims on the compensation fund and negligence actions, the SRA has been warned.
Controversial proposals by the Solicitors Regulation Authority to end the requirement on practitioners to refer clients to independent financial advisers risk being misunderstood, a member of the SRA board warned last week.
The Solicitors Regulation Authority is set to recommend dropping the controversial ban on practitioners referring clients to tied financial advisers. Solicitors would instead have to ensure that the client is involved in the decision-making process that goes into any referral.
Insurance companies could buy law firms and use them as conduits to sell their products to consumers if the Solicitors Regulation Authority changes the rules on referring clients to financial advisers, it has been warned.