Sourcing a safe pair of hands for your financial planning referrals

 In Practice Management

Disclaimer: LawSkills provides training for the legal industry and does not provide legal advice to members of the public. For help or guidance please seek the services of a qualified practitioner.

Under the new dual code system arriving in November, the Solicitors Regulation Authority (SRA) is clear that it expects law firm managers and their compliance officers to be introducing processes and systems to facilitate best practice and instruct individuals within their businesses.

You should already be reviewing those financial planning partners you currently refer your clients to for independent financial planning advice. Indeed, you should already be conducting thorough due diligence on existing and potential new partners.

This process is crucial under the new, shortened SRA Standards and Regulations, because the SRA now expects solicitors to be able to be able to demonstrate to clients why they believe a referral to a third party is in their best interests. The SRA has reiterated this several times, so under the new regime, it can no longer be left to individual solicitors to make their own decisions. Your firm must take responsibility and instigate a firm-wide process, to be adhered to by all. You should consider establishing a small panel of approved referees, perhaps based on specialisms: referring continually to the same third party might be seen to compromise your independence.

But when it comes to selecting the right financial planning partners for your firm, what does ‘good’ look like? What sort of attributes and qualities should be paramount?

FREE monthly newsletter

Wills | Probate | Trusts | Tax  | Elderly & Vulnerable Client

  • Relevant learning and development opportunities
  • News, articles and LawSkills’ services
  • Communications which help you find appropriate training in your area

Independence or impartiality

The Law Society has always recommended that solicitors refer to IFAs, but in reality, the financial services sector has changed considerably since the Retail Distribution Review (RDR) in 2012, and there are excellent financial advisers offering wide-ranging, conflict-free impartial advice, without being classified as independent.

In SIFA Professional’s view, a large choice of solutions and products will allow the adviser to offer your client quality advice that is in their best interests. On the other hand, referring to financial advice firms with narrow, restricted panels they are contractually obliged to utilise, may not be in the client’s best interests. If in doubt, a good question to ask the financial advice firm would be: are you independent, or whole of market? If a firm is ‘restricted’, it is a case of understanding just how constricted their advice will be.


You will want to refer your clients to similarly highly qualified professionals. All financial advisers are well qualified since the RDR, but as you would expect, some firms and individuals strive for higher standards than the required level, so these are the ones you should seek out.

The highest level of financial advice firm is one with chartered status, which it will proudly display on its website. There are around 700 such firms in the UK, which have to demonstrate a commitment to raising standards, knowledge and ethical practice and must ensure their staff have the necessary skills to deliver these standards. Such firms, of course, will employ individual ‘chartered financial planners’, the gold standard for advice, backed up by considerable academic and market knowledge.

It would be a good idea to seek out firms that have advisers with qualifications or accreditations that are relevant to working with solicitors in certain client arenas, for example:

  • Later Life Adviser Accreditation – basis of membership of the Society of Later Life Advisers. It demonstrates not only that the financial planner is qualified to advise on equity release and long-term care matters, but also that they have the soft advisory skills to work with elderly or vulnerable clients and their families and attorneys.
  • Resolution Specialist Accreditation – marks you out to potential clients as a trusted expert in the field of financial advice in separation and divorce matters.
  • STEP Certificate in Financial Services – aimed in particular at investment advisers, financial planners and those working in the banking sector dealing with trusts and estates. There are now over 1,000 accredited advisers.

The advice process

You should take a particular interest in a potential partner’s advice process, because it is to their advice that you will be entrusting your clients. Quality financial planners should base their advice around cash flow modelling, having understood the client’s needs, goals and aspirations, whether the client is an individual, a couple, or even a trust.

If you are to refer your clients with confidence, it is important you understand what your client can expect, not just in terms of how their matter will be handled and resolved, but what happens afterwards. It is sometimes difficult as a solicitor to develop an ongoing relationship with a client, but a good financial planning partner will involve you on an ongoing basis when they review the client’s portfolio and financial plan.

Given the above, your due diligence process should include asking questions on:

  • the partner’s advice process
  • how they manage clients
  • how often they review the client’s portfolio and financial objectives
  • how they will include you as the initial referrer in that process, either face to face or by flow of information.

It is critical that you find out what questions they ask in their fact-finding process for new clients that might lead them referring work back to your firm. If this is to be a truly reciprocal partnership, you must understand the questions they ask their clients about wills, powers of attorney and trusts. What are the trigger points in their financial advice or planning process that will require them to involve you?

Fee-based remuneration

All your potential partners are now fee-based, but ensure you understand how the firms you are considering will charge your referred clients for advice, and that you are comfortable with it. They will have this all set out clearly in their terms of business, which you should ask to see up front.

Other considerations

Obviously, all of the above is crucial, but there may be other aspects of the partner firm important to you and your firm, for example:

  • location of the partner
  • Kitemarks and awards
  • reputation / how established it is.

However, one thing you will not necessarily be able to see or research in advance is whether the financial planning firm understands you, the processes you will have in place by November, and how they will need to work with you compliantly and professionally. One way of providing some assurance is to consider a financial planning partner who is a SIFA Professional member, found on the SIFA Directory that we have endorsed since 2008. SIFA Professional strives to always ensure its financial advisory members are not only well qualified, but also up to speed with how to compliantly support their solicitor partners.

This article was first published the Law Society’s Small Firms Community section of their website.  For more information, go to Small Firms Division


The LawSkills Monthly Digest

Subscribe to our comprehensive Monthly Digest for insightful feedback on Wills, Probate, Trusts, Tax and Elderly & Vulnerable client matters

Not complicated to read  |  Requires no internet searching |  Simply an informative pdf emailed to your inbox including practice points & tips

Subscribe now for monthly insightful feedback on key issues.

All for only £120 + VAT per year
(£97.50 for 10+)

Lawskills Digest
Recommended Posts
Gill Steel - Solicitor, Trainer in Wills Probate Trust Tax