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The ups and downs of teaming up with other professions

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The ups and downs of teaming up with other professions

At the Personal Finance Society conference in November 2012, Sifa chairman Ian Muirhead delivered an inspiring talk about the opportunities for advisers to team up with law firms.

Muirhead explained how the Legal Services Act had opened the door to alternative business structures (ABS): firms that could provide legal services with only one lawyer as a partner.

I left the presentation firmly believing that if a business could crack being a multidisciplinary practice, with solicitors, financial planners and accountants working in an integrated fashion, it would have vast potential.

Going out and meeting advisers who have debated whether to join forces with solicitors and accountants has given me an insight into the benefits of working closely with other professions, but also the practical difficulties it presents.

Integrating services

When Jason McGuigan became director of Oxfordshire-based Critchleys Financial Planning, he had to start co-ordinating tax consultants and financial advisers. The difficulties he faced trying to integrate the two services reflect the struggle many advisers experience working with other disciplines.

McGuigan said he had to overcome two major stumbling blocks: misunderstandings of what a financial adviser does, and differences in objectives and specialisations. ‘It’s a slow-burning situation, [which is] partly due to the poor reputation the traditional financial advice industry has,’ he said.

Duncan Hannay Robertson, director of Cambridge-based Hannay Robertson, agreed that other professions thought of financial advice as transactional rather than as a holistic service.

Shifting perceptions

McGuigan said cashflow modelling had helped shift perceptions. ‘[It] was a very powerful tool to impress upon tax consultants what financial planners can do,’ he said.

Critchleys has accountancy and financial planning offerings, and McGuigan considered bringing legal services in-house, but decided it would not be commercially sound because it could result in the firm losing referrals from solicitors with whom it had existing relationships.

Despite not going down the full ABS route, McGuigan believed the Legal Services Act had helped planners’ relationships with lawyers. ‘[It] has made solicitors understand they have to make proper relationships,’ he said.

Muirhead said that when solicitors reviewed their relationships with advisers, they would realise how close ties to a financial planning service could help differentiate them from their rivals.

Differentiating from the traditional is what new model advisers are all about, and establishing links with like-minded accountants and solicitors could provide for a very interesting (and lucrative) future.

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