The Solicitor’s Regulation Authority (SRA) is set to rule that solicitors can make referrals to any type of financial adviser ‘regardless of whether or not they are tied to a particular institution’.
Following a consultation the SRA is set to tell its board on Wednesday 28 November that solicitors should no longer just make referrals to independent financial advisers.
Earlier this year the SRA launched a consultation on solicitor referrals in the light of the Financial Services Authority’s changes to the definition of independence.
In its consultation paper published in July, the SRA outlined three possible options for the future of solicitor-adviser referrals having been invited to reconsider its stance by the FSA which conceded that its post-RDR definition of independence might be more onerous than the one currently used by the SRA.
The three options proposed by the consultation were:
- maintain its current rules that only independent advisers can receive referrals;
- scrap the independent requirement altogether;
- clients choose what type of adviser they want having discussed it with their solicitor;
The third proposal was the SRA’s preferred option.
Agnieszka Scott, SRA director of policy, said: ‘We had an excellent response to our consultation and we'd like to thank all those who responded. We've taken on board the comments received, some of which have given us food for thought.
'However, nothing has changed us from our belief that the best way forward is to implement our preferred option, option three, and that's what we'll be recommending to the board. This represents the best fit with outcomes-focused regulation as solicitors, as highly qualified professionals, would be free to assess and discuss clients' needs, not be restricted by a prescriptive rule.’