There are so many advisers out there in what can seem a bafflingly eclectic market. Of course, competition is a good thing, but wherever there is choice, there is the potential to make the wrong decision. So, who should you turn to for financial advice?
The Law Society is clear in its directives regarding financial advisors: only ever choose those who are independent.
One reason for this unambiguous stance is the professional body’s concern that by recommending other types of advisor, for example restricted, tied or multi-tied advisors, solicitors could make themselves vulnerable to financial advice negligence claims.
Many solicitors have in-house specialists for advising or recommending particular courses of action. As such, firms frequently see individuals in need of advice and direction on matters such as tax planning, property investment, and pension schemes.
The official position of the Solicitors Regulation Authority is that because many lawyers may not fully comprehend the different status of various types of advisor, its members should not seek to differentiate between “restricted” and “independent” advisors when making recommendations to clients – a position which contrasts with its former stance of exclusively recommending independent advisors.
The Law Society believes that the SRA’s current position is misguided. It said, “The Law Society has taken the unprecedented step of urging the profession not to follow the SRA’s new rules on recommending financial advisers to clients, warning that it could expose solicitors to negligence claims.
“We urge members to only recommend independent financial advisers (IFAs) to clients.
“The provision of independent financial advice has historically been one of the fundamental tenets of the profession. As such we would urge solicitors to disregard the liberalisation of the Handbook in this area and continue to only recommend IFAs.”
Professional negligence specialists in London and Brighton
Healys LLP is an independent law firm offering specialist services to clients looking to recover compensation following the negligent or substandard services of a professional.
Our financial advice negligence claims teams work from our London and Brighton offices to provide clarity and direction, and, wherever possible, early and non-contentious settlement of a dispute. Contact us today for more information.