I am delighted to be back talking to the Quilter Cheviot readership and at a time when my enthusiasm and positivity about the financial adviser and solicitor communities could not be greater! What may surprise you is the cause of my ebullience is a regulator! Not our good friends in Canary Wharf on this occasion but the Solicitors Regulation Authority (SRA).
The forward-thinking SRA is in the process of changing the regulatory handbook away from the current weighty tome to a slimmed down version based around simpler principles. We’ve gone from 400+ pages full of indicative behaviours to just over 100 pages of common sense dos and don’ts. The purpose is to make it far easier for solicitors and solicitor practices to maintain higher standards, which in turn will benefit clients. In conversation with Crispin Passmore, the SRA Executive Director, he summed the exercise up superbly when he said that ‘we have taken out everything that was unnecessary and left in only what was necessary’.
Without the resource of the FCA to police its community, the SRA trusts solicitors to do the right thing by their clients, and is making that a lot easier by simplifying the rulebook. For direct legal work, I am sure no one doubts that solicitors have such high professional standards that they would always act in their clients’ best interests. However, when it comes to referring work outside of their own remit, the new handbook offers excellent guidance. This will be wholly positive to the financial advisory firms looking to work with them.
The new handbook, due to come into force in early 2019, has for the first time a Code of Conduct for the firm as well as for individual solicitors, which should usher in an era of a more centralised approach to how practices manage their external referrals. If the solicitors you work with are to adhere to the new rules on referrals outlined in Section 5 of the new Code, they will need to have a more structured approach when deciding as a firm who they wish to refer clients to.
Crispin Passmore, the driving force behind the push to higher standards in the new handbook and codes, summarised how this should look at the recent SIFA Conference in June. About 100 SIFA member delegates were delighted with his assessment of how referrals work now and how he would like them to work in the future:
Existing Code of Conduct – Referrals
New Code of Conduct (2019) – Referrals
Given the above, now truly is the time to be re-engaging with your solicitor connections and ensuring they are ready to comply with the new rules. The more measured approach to ensure referrals are in the clients’ best interests simply has to mean proper due diligence is undertaken at firm, not individual solicitor level.
Make sure you’re the first IFA through their door to offer assistance.
Dave Seager, is a Director of SIFA and responsible for the SIFA Professional proposition, which is a membership support package designed to support quality advisory firms build meaningful relationships with the legal profession. For more information, you can contact Dave via firstname.lastname@example.org