SRA Handbook amendment on financial advisors
The latest version of the handbook (version 6) will allow solicitors to refer clients needing financial advice to any financial adviser.
Previously, solicitors were only been allowed to refer to financial advisers deemed "independent" by the Financial Services Authority (FSA).
The focus is now on achieving the best outcome for the client. The changes follow a consultation exercise which took place over the late summer.
There were comments too from the Financial Services Consumer Panel, which represents the public in the development of financial services.
The Panel said: "We support consumer choice and think it entirely right that the client should be provided with sufficient information to make a decision on the type of advice service that would meet his/her needs, rather than automatically being referred to an independent financial adviser.
“This is particularly important given the potential cost of independent financial advice and the availability of possibly more appropriate and cost-effective advice services, such as restricted advice."
Agnieszka Scott, SRA Director of Strategy and Policy, said: “It needs to be reiterated that we are not making a judgement on who provides the best financial advice–independent advisers or otherwise–which is what a lot of people who responded to the consultation did.
“We have simply removed an administrative blockage, allowing the solicitor to make a considered judgement on what’s best for their client."
Other amendments to the Handbook for Version 6 included the removal of the section 69 sunset clause for the Compensation Fund, which means that any claims for compensation made against law firms set up as alternative business structures will be dealt with by the existing fund rather than creating a new fund.
The latest version of the Handbook is available here.