A newly established alternative business structure (ABS) set up by two lawyers and a wealth management expert is set to package up legal advice for financial advisers to provide to their customers.
The innovative model has been developed by Paul Crutchley and Gareth Fatchett, partners at specialist financial services law firm Regulatory Legal, and Peter Jones, former CEO of leading financial adviser UK Wealth Management.
Mr Jones said the three men have developed the idea of offering various packages of legal services to the financial adviser market.
Its partners, typically chartered financial advisers, will need to meet required standards and undertake relevant training, Mr Jones said.
He explained that rather than directly target clients, the firm will establish partnerships with chartered financial advisers to provide them with seamless packaged legal solutions for their clients.
Mr Jones said: “As financial advisers acquire a detailed knowledge of a client’s requirements and circumstances, they will recognise the need for them to review their will, trusts, and power of attorney.
“There is often a frustration at not having their clients be able to access good legal services. We’ve got extensive knowledge of the quality end of the chartered financial adviser market and we believe we’ve got a sensible solution which will work for them.”
Mr Jones said that by using technology “smartly”, Private Client Solicitors will be able to provide partner firms with appropriate package solutions for their clients. Documents will be constructed using new software to reduce duplication and improve accuracy and efficiency for clients who need multiple legal solutions.
The West Midlands-based ABS was already “close” with 15-20 firms as it awaited authorisation.
Mr Jones said: “The profession is ready for this kind of approach. The more sophisticated firms of financial advisers and wealth managers have used clever software for years. The better firms have used technology to help the production of their advice and regularly review clients’ needs.
“We’re making sure we take advantage of that in the way we develop our solutions for clients and have spent the last couple of years researching and working on the concept of providing a seamless process into legal services.
“Wills, trust and probate has suffered from a lack of investment in a lot of law firms and we think our model can produce more profitable models for clients and all parties.”
Private Client Solicitors will also be able to provide legal solutions for corporate clients of financial advisers, such as shareholders agreements – in short any legal requirement a typical sophisticated financial adviser firm needs for its client.
Mr Jones added: “To be clear, we are not offering to train financial advisers to be lawyers. We are offering a facility and partnership with us to look after their clients in a professional manner.
“The introduction to the client, the work and the information is very much through our financial adviser partners. The legal documents will then be provided directly to these clients from our lawyers.”
Private Client Solicitors is an entirely separate business from Birmingham and Leeds firm Regulatory Legal, but will have some regulatory and accounting support from the established firm as the business is built from scratch.
A key part of Mr Jones’ role will be to talk to interested parties and find financial adviser firms with the “correct reputation”, have “strong suitability” and which are the “best fit”. These firms must have come through appropriate industry diligence to be considered.
This year’s ‘big bang’ in the financial adviser sector – the Retail Distribution Review (RDR) – abolished commission and has led to many advisers working on a fixed-fee basis, which he described as a “healthy development”. Mr Jones added: “We have developed our services with full knowledge of RDR and the solutions advisers need for their clients’’.
Mr Jones concluded: “One or two financial adviser firms have employed a lawyer or two. But that is different to the business model we have here.
“The whole point of ABS is that non-lawyers with business experience can come into the sector and help produce an idea like this and have some ownership.”
The Solicitors Regulation Authority has now licensed 162 ABSs.