Independent advisers must lobby the Solicitors Regulation Authority (SRA) in a bid to convince it not to soften its rules around referrals to independent advisers, according to SIFA compliance director Ian Cockerill.
He added: "The industry should make it clear that it views allowing the referral of clients to restricted advisers to be a potential disaster.
"Restricted advisers are serving a master and not their client and this will affect the quality of advice. Frankly referrals of this sort would be inappropriate."
In addition, Cockerill thinks the SRA's potential change in stance might be in part the result of lobbying by vested interests.
"Providers may have been lobbying the SRA for a change in the body's code of conduct. It is possible they have used the numbers argument and said that retaining independent status will be too difficult for most advisers post RDR meaning there won't be enough independents around to service the volume of clients.
"Actually recent FSA guidelines mean we think it will be entirely possible for most IFAs to maintain their status."
The SRA released a consultation paper earlier this week stating that it was considering softening its approach to referrals to financial advisers to correspond with the FSA's post RDR definitions of 'independent' and 'restricted'.
The FSA's changes now mean that 'restricted' will now include specialised whole of market advisers.
The three options under consideration by the SRA are as follows:
1) The SRA should alter its the language to remove reference to "independent intermediary" and replace it with wording to reflect the terminology contained in the FSA's Retail Distribution Review.
2) Remove reference to ‘independent' from the SRA Code of Conduct.
3) Replace [original desired outcome, i.e. the referral to independent advisers] a requirement that will mean clients are in a position to make informed decisions about the referral.
The consultation is expected to last for eight weeks.
SIFA is a body that helps independent advisers work with solicitors.
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