SIFA produces IFA 'checklist' for solicitors

IFAs may have to pass a legal industry 'checklist' on issues such as charging and independence before SIFA members recommend them to clients.

The checklist, sent to SIFA members this week, assesses firms for independence, direct authorisation, fee-based remuneration, qualifications and their disciplinary history.

It says it has been produced in response to the "mistaken", Law Society-led, belief solicitors must offer clients a choice of three IFAs when referring.

This is "unfair" to clients, compliance director Ian Cockerill says, as it "shifts responsibility for the decision". "The better course is for solicitors to undertake due diligence on the proposed IFAs."

SIFA managing director Ian Muirhead says the checklist builds on procedures solicitors already use to select barristers, expert witnesses and other professionals in the legal community.

"It is good practice to extend the principle to include financial advisers," he says.

He argues it is also of equal benefit to IFAs, and the organisation has sent its adviser members a leaflet echoing some of the points in the solicitors' guidance.

"Solicitors are very risk-conscious," Muirhead says. "They are familiar with the concept of due diligence so we used that language.

"But IFAs can present their leaflet to solicitors and say check us out: these are the criteria we meet and what you should use to measure our industry by in order to steer clear of multi-tieds."

Muirhead adds: "It is just one way IFAs can show solicitors they have a shared professional culture and are not, as has sometimes been perceived, just trying to sell on commission in a referral one-way-street."

SIFA says solicitors will "have to be more receptive to dealing with IFAs" from 6 October next year when new legislation will mean they will have to battle it out with banks, supermarkets and insurance companies for legal business.