Solicitors will have to battle it out with banks, supermarkets and insurance companies for legal business from Q4 next year, leading some to suggest they will be more eager to link up with financial advice firms.
According to SIFA, the Legal Services Act's Alternative Business Structures (ABS), which the Government comfirmed will come into force on 6 October next year, means solictiors will "have to be more receptive to dealing with IFAs".
The ABS part of the Act - branded the 'Tesco Law' and the 'solicitors' RDR' - will open the "closed shop" of legal services to other providers such as banks and supermarkets.
Law makers hope the move will broaden consumer access to legal services, but law professionals argue it could lead to a 30% reduction in the number of practicing law firms.
SIFA says entrepreneurial financial advisers should now engage solicitors, offer them skills in building client relationships and gain valuable professional connections and new business in the process.
"Many [solicitor] firms will need to take a wider view of their clients' needs and consider strategic alliances with other professionals who possess complementary skills," SIFA says.
According to the group, IFAs have in the past found solicitors reluctant to refer clients due to negative ideas of advisers as salesman with a low level of professionalism.
However SIFA development director David Seager says the announcement of the implementation date for ABS, coupled with the drive for professionalism within financial services brought on by the RDR, will drive solicitors to seek out professional link-ups.
"I would love to say solicitors are now more receptive to doing business with IFAs," he says. The truth is solicitors now have to be more receptive to dealing with IFAs.
"For solicitors there are quite a lot of scary changes coming up. So this is the time, if you are a professional IFA, to be speaking to solicitors.
"Most of the new firms we have joining SIFA are professional IFAs who want our support in developing relationships with law firms."
In an echo of the challenges faced by advisers ahead of the RDR, SIFA says many law firms will be driven up-market by the Legal Services Act, to areas where the value of their technical expertise will be rewarded.
In another dovetailing between the two professions, solicitors will also have to overcome the negative perceptions associated with the solicitor brand - namely that solicitors are interested only in "matters", not in client relationships, and are not concerned with clients' wider professional needs.
"For most firms, some form of strategic alliance with an IFA firm may be the way forward, possibly taking the form of a closer referral relationship or a joint venture", SIFA says in its members' bulletin.
SIFA advises solicitors to satisfy themselves IFAs are fee-based and are well scored for independence, required by the Solicitors Regulation Authorty, before entering into alliances.
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