Posted by Dave Seager, consulting adviser to Legal Futures Associate SIFA Professional
Seager: The same partner may not be appropriate for every referral
The Solicitors Regulation Authority’s (SRA) codes of conduct for individuals, via the seven principles, and for firms which they expect to put systems in place to guide and support those individuals, are clear how crucial proper due diligence is when assessing third-party partners.
After all, a referral from your firm is part of your process and must be in your client’s best interests.
In addition, you will want the recommendation to reflect well on you and your teams. Your reputation, is extremely valuable to you, so why risk it by not ensuring that you are confident in a third-party recommendation?
Here are 10 searching and relevant questions to ask a potential financial planning partner to ensure they are the right fit for your referrals:
- Is your firm independent or impartial?
- How qualified are your individual financial planners and in which areas of specialism that can support us and our clients in need of complementary financial planning?
- Is your firm accredited to any specialist organisations, such as SOLLA, STEP or Resolution?
- How long have you been established?
- What is your advice process and within that your investment process?
- At which stages in this process do you envisage referring clients back to us?
- When, for what and how do you charge fees?
- Has your firm ever had any complaints and were any upheld?
- What is your firm’s policy for dealing with clients in vulnerable circumstances?
- Are you able to provide relevant training in the areas where legal and financial overlaps to support our lawyers ongoing competence?
Obviously, your firm will have existing relationships, perhaps long established, and they may well be working well. However, there is no harm in double checking that those financial planning partners are still appropriate.
As with any due diligence, it should be ongoing and regularly reviewed, and the above questions should provide and excellent basis for checking that current and new collaborations are right both for your firm and your clients.
Bear in mind also that it may not always be the same financial planning partner that you will recommend for every area of complementary advice, which also ties in with the SRA’s expectation that your firm will always act with independence.
Your regulator will be surprised if every third-party referral is going to the same partner.
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