In the lead up and during the consultation prior to the introduction of the Standards & Regulations in November 2019, the SRA’s objectives were clear; to make the services of solicitors more accessible, design regulation that enabled its firms to compete with other providers of legal services and crucially to steam line the client experience when dealing with a firm. The latter purpose is why the introduction of a code of conduct for firms for the first time was so important and SHOULD NOT be taken lightly by management and most importantly the firm’s Compliance Officer for Legal Practice, (COLP).
Although the COLP role was introduced with the outcomes focused rule book of 2012, the senior management responsibilities that were allocated to the role were not properly supported by the rules still placing the responsibility for solicitor professionalism with individuals. November 2019, as we now know ushered in a new regime and a new reduced set of principles and a regulator expectation of adherence not solely as individual solicitors but as firms of solicitors. The SRA still respects and trusts the individual solicitor to always do the right thing by their clients, but the onus since 2019 has been on the management team and the COLP in particular, to implement firm-wide processes, structures and crucially controls in place to ensure this is uniform.
The SRA wants what we in the FCA world have had for years…
The SRA wants what we in the FCA world have had for years – when a new customer or existing client comes to see a firm, the experience will be the same, whichever adviser they see. The same fact-find format, the same attitude to risk questionnaire, the same investment process, the same fees, the same review process, reporting etc. This is not to say that either regulator wants to see the end of individualism and personal service, but both wish to see this delivered within a structure.
In the context of deciding which financial advisory partners are the correct ones for your law firm and its clients, when it comes to referral’s this will be highly relevant. Before, I must stress that in my conversations with the SRA, it is evident that not having a process for this is not an option. If, while conducting a particular legal service, a solicitor identifies a complimentary need for financial advice, to then not make a referral, would not be acting with integrity or in the client’s best interests – two of the 7 Principles governing the new rules.
…this undertaking should be made available and accepted by everyone within the firm who may need to refer a client for financial advice
This is why, the management and COLP should by now, ideally have overseen a research and due diligence exercise to establish which financial advisory firms are the correct partners, with the relevant experience, qualifications, accreditations, and processes to be recipients of your firm’s referrals. Having finalised the firm(s) you wish to work with, this undertaking should be made available and accepted by everyone within the firm who may need to refer a client for financial advice. This is so each individual is able to clearly demonstrate to their client why the referral is in their ‘best interests’ and may even mean that different financial advisory partners are more suitable for different types of referrals, such as trustee investment, pensions on divorce, estate planning etc.
However, if you are not sure you have a proper process in situation yet or are not entirely satisfied with it, it is not too late to revisit and review, which should be best business practice anyway. As you might expect, in response to the need for a process both to identify the right partners and to implement that process, the market has responded, and new support/tools have become available. In my Consulting Adviser role for SIFA Professional I would still encourage COLPs to visit the SIFA Pro Directory but I have recently begun advising an exciting new offering – RQ. This conveniently coincides with both the SRA and the Law Society focusing on technology and innovation that ultimately improves consumer outcomes.
RQ will enable COLPs to run due diligence on financial advisers as well as add firms you have already selected. It will then also use the system to monitor the referrals of all lawyers within the practice for compliance purposes. RQ are very keen to speak with COLPs, particularly where you are responsible for processes across multiple offices as they feel their system will prove invaluable. If you would like to be connected, please get in touch via this contact page.
David Seager is Consulting Adviser to SIFA Professional