Guidance has been issued by the Solicitors Regulation Authority (SRA) regarding the definition of ‘independent intermediaries’ as used in rule 9.03(6) of the Solicitors’ Code of Conduct 2007.
The rule states that where clients require advice etc. on investing in an asset that can rise or fall in value – for example, an endowment policy, life insurance with an investment element, or a pension policy – they must only be referred to independent intermediaries authorised to give investment advice.
However, the term ‘independent intermediary’ has, to date, never been clearly defined and has resulted in some law firms being approached by multi-tied and tied advisers stating that they are eligible to receive referrals from solicitors.
The SRA has now ruled that the term ‘independent intermediary’ has the same meaning as ‘independent financial adviser’, the term used by the Financial Services Authority; that is – an adviser who is able to advise on products from across the whole of the market and offers the consumer the option of paying fees.
Clients who specifically ask their solicitor to refer them to a tied or multi-tied adviser should be told that they solicitor is not allowed to do so, says the SRA, and although not mandatory, the guidance may be used by the SRA in disciplinary proceedings.
For further information on the guidance please visit the SRA website.
Ensors Financial Planning provide independent financial advice on the full range of financial products including savings and investment, mortgages, pensions, life assurance and financial services for business.
