The Solicitors Regulation Authority’s (SRA) decision to allow referrals to restricted advisers could open the door to joint ventures between solicitors and restricted advisers, Sifa has warned.
The SRA board ruled earlier this week that solicitors should no longer have to make referrals to only independent financial advisers.
An SRA spokesman said the change in the referral rules would not impact on joint ventures, pointing to the unchanged section of the solicitors’ handbook which states they can only set up joint ventures with ‘an appointed representative if it is an appointed representative of an independent financial adviser'.
However, Sifa chairman Ian Muirhead said the SRA already allowed exceptions to this and had recently granted a waiver for a joint venture a between a solicitor and a London-based Alexander Associates Group, a member of St James’s Place.
He said the possibility of waivers combined with the relaxation of the referral rule could lead to more joint ventures between solicitors and restricted advisers.
‘In principle it looks like they’re opening their doors there as well. It gets very complicated and there are situations they haven’t even thought about.’
‘It might be the beginning of the end of that particular rule.’
Muirhead (pictured) also criticised the SRA over the restricted referral decision for the double standards it created with advisers which worked in-house at a solicitor firm still needing to be independent.