Relationships between IFAs and solicitors could be damaged by a lack of knowledge of unregulated collective investment schemes (UCIS).
SIFA, which helps to form links between the two professions, is concerned by the potential migration of advisers to restricted models due to a lack of knowledge of UCIS and other products.
Under current Solicitors Regulation Authority rules, solicitors can only refer clients to independent financial advisers. Experts have previously suggested a failure to grasp UCIS could be the gap in their knowledge base which forces advisers to become restricted post-RDR as they would not have a ‘whole of market' view.
David Seager, development director at SIFA, says: "In two years' time are you going to be a full IFA? As far as solicitors are concerned, they can only refer to fully independent advisers. Restricted or multi-tied won't do.
"It is one thing if you are an IFA and you say you are not going to advise on UCIS. However, for your PI cover you might have to say you don't cover them and then you become restricted.
"It won't affect solicitors directly but it will affect their relationships with IFAs."
Seager says his organisation will robustly defend the requirement for solicitors to only refer to independent advisers and says it may take steps to help members maintain their IFA status.
He adds: "It is something we are exploring and it might be the case we will have to speak to more UCIS providers for education and training for members."
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