A safe pair of hands – how to find the right financial planning partner

Posted by Dave Seager, consulting adviser to Legal Futures Associate SIFA Professional

Seager: You need to understand your partner’s advice process

The rules around referrals to third parties fundamentally changed with the introduction of the dual codes of conduct, under the 2019 Standards and Regulations.

Under the new dual code system, the Solicitors Regulation Authority (SRA) is very clear that it expects law firm managers – primarily the responsibility sits with the COLP – to introduce processes and systems to facilitate best practice.

To this end, establishing a process for third-party referral should be seen in a similar way to design processes for anti-money laundering, acting for clients in vulnerable circumstances, and the current hot potato of ensuring ongoing competence.

The SRA expects solicitors to be able to demonstrate to their clients the reasons why they believe a referral to a particular third party is in their best interests. The regulator has reiterated on many occasions that it should no longer be left to a potentially unqualified choice of individual lawyers.

Your firm should have hopefully by now taken responsibility and instigated a firm-wide process, to be followed by everyone.

It might be appropriate for a law firm to have considered establishing a small panel of approved referees, perhaps based on their practice area specialisms: referring your clients continually to the same third-party firm might be seen as compromising your independence.

However, we are still often asked by individual solicitors and COLPs, when it comes to selecting the right financial planning partners for your firm, what does ‘good’ look like? What sort of attributes and qualities should be forefront in your search and due diligence?

Independence or impartiality

The Law Society has always recommended that solicitors refer to independent financial advisers, but in reality, the financial services sector has changed considerably since the Retail Distribution Review (RDR) in 2012, and there are many excellent financial advisers offering wide-ranging, conflict-free impartial advice who are not classified as independent.

In SIFA Professional’s view, a large choice of solutions and products will allow the adviser to offer your client quality advice that is in their best interests. Referring to financial advice firms with narrow, restricted panels they are contractually obliged to utilise, may not be in the client’s best interests.

If in doubt, a good question to ask the financial advice firm would be: are you independent, or whole of market? If a firm is ‘restricted’, you’ll need to understand just how constricted their advice will be.


You will want to refer your client to similarly highly qualified professionals. All financial advisers should be well qualified since the RDR but, as you would expect, some firms and individuals strive for higher standards than the required level, so these are the ones you should seek out.

The highest level of financial advice firm is one with chartered status, which it will proudly display on its website. There are around 800 such firms in the UK, and they have to demonstrate a commitment to raising standards, knowledge and ethical practice and must ensure their staff have the necessary skills to deliver these standards.

Such firms, of course, will employ individual ‘chartered financial planners’, the gold standard for advice, backed up by considerable technical and market knowledge. Three-quarters of the firms listed on our SIFA Professional directory have a chartered adviser.

It would be a logical to seek out financial advice firms that have advisers with qualifications or accreditations that are relevant to working with solicitors in certain client arenas, for example:

Later Life Adviser Accreditation – the basis of membership of the Society of Later Life Advisers. It demonstrates not only that the financial planner is qualified to advise on equity release and long-term care matters, but also that they have the soft advisory skills to work with elderly/vulnerable clients and their families and attorneys.

Resolution Specialist Accreditation – this marks you out to potential clients as a trusted expert in the field of financial advice in separation and divorce matters.

STEP Certificate in Financial Services – this is aimed in particular at investment advisers, financial planners and those working in the banking sector dealing with trusts and estates. There are now over 1,000 accredited advisers.

Their advice processes

You should take a particular interest in a potential partner’s advice process because it is to their advice that you will be entrusting your clients. Quality financial planners should base their advice around cash-flow modelling, having understood the client’s needs, goals and aspirations, whether the client is an individual, a couple or even a trust.

If you are to make referrals for your clients confidently, it is important that you understand what your client can expect from the financial advice firm, not just in terms of how their matter will be handled and resolved, but also what happens once the matter is concluded.

A good financial planning partner will involve you on an ongoing basis as and when they review the client’s portfolio and financial plan.

Given the above, your due diligence process should include asking questions on:

  • The partner’s advice process;
  • How they manage clients;
  • How often they review the client’s portfolio and financial objectives; and
  • How they will include you as the initial referrer in that process, either face-to-face or by a flow of information.

If this is to be a truly reciprocal partnership, you must find out what questions the financial advice firm asks in their fact-finding process for new clients – it could lead to them referring legal work back to your firm too.

What do they ask the client in relation to wills, powers of attorney or trusts, for example? What are the trigger points in their financial advice or planning process that will require them to involve you?

Fee-based remuneration

All your potential partners will work on a fee-based remuneration basis, but ensure you understand how the firm will charge your referred clients for advice, and that you are comfortable with the approach. They will have this all set out clearly in their terms of business, which you should ask to see upfront as part of your due diligence work.

Other considerations

Obviously, all of the above is crucial, but there may be other aspects of the financial advice firm which are especially important to you, such as their location, any quality marks and awards, their reputation/company history and their established policy on dealing with clients in vulnerable circumstances.

However, one thing you will not necessarily be able to see or research in advance is whether the financial advice firm understands you, the processes you should have established under the accounts rules and how, as a result, they will need to work with you compliantly and professionally.

One way of providing some assurance is to consider a financial planning partner who is a SIFA Professional member, found on the SIFA Professional Directory.

SIFA Professional strives to always ensure its financial advisory members are not only well qualified, but also up-to-speed with how to support their solicitor partners in a compliant manner.


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