Current Choices for Solicitors and Accountants

No involvement

This has been the choice of many firms in the past because it has been perceived to be the safe or easy option. In this increasingly litigious world your duty of care to clients may well extend beyond the provision of legal advice and encompass some of the client’s financial affairs.

The introduction of the Financial Services and Markets Act 2000 in December 2001 brought all regulated financial services activities under the control of a single regulator. With that came an understanding that there is a major issue for a practice wishing to avoid direct regulation by the Financial Services Authority in that stepping outside the terms of the exclusion or an exemption without proper authorisation, is now a criminal offence.

Furthermore, where financial services advice is required there is a need to refer to a suitably qualified Independent Financial Adviser to avoid the possibility of being found professionally negligent.

Many of your clients may take advice from a tied adviser, whether it be from their bank or building society, and though the advice may be sound the client has not had the full choice of products and services that an Independent Financial Adviser can source.

Once a ‘financial services’ culture has been adopted by a firm it is very easy to refer clients to the dedicated adviser who then deals with the whole matter without impinging further on the fee earner’s time.

Equally important and in addition, these firms are missing out on another source of income.

Structured relationships

At Ashwood Law we have been advocating structured relationships for a number of years and have successfully developed strategies for accountants, solicitors and estate agents to maximise commission and fee income with minimal interference to the day to day running of the practice.

These systems are unique to Ashwood Law and have enabled some of our key connections to go from producing literally £100’s of commission to £10,000’s over a relatively short period of time.

In addition to the above, the firm’s duty of care to their client can be properly discharged by referring their clients to qualified financial advisers employed by Ashwood Law, thus protecting the practice against possible claims of negligence by omission and ensuring they work within the confines of the Financial Services and Markets Act

In-house

Some of the larger firms have provided financial services advice in-house to clients but this has normally been beyond the scope of most firms. The formation of the Financial Services Authority in 2001 has reduced the number of firms providing financial services directly and many have chosen to outsource this work rather than have to deal with additional layers of rules under the new regime.

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