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Some IFAs are recommending will writers to clients in exchange for secret clauses in wills leaving legacies to the advisers, the Society of Trust and Estate Practitioners (STEP) claims.
Members of STEP claim they have received complaints from clients who have previously used IFAs when planning or writing wills.
Around 38% of STEP members say they have come across will writers who have an ‘inappropriate relationship' with another company, including IFAs and banks.
Within this group, STEP members say they have seen cases where will writers have been recommended by IFAs. Clauses are then included in the will leaving 1% of the estate to the adviser, in some cases without the client's knowledge or consent.
In other cases, solicitors say they have seen cases where executors have been persuaded to employ a particular advisory firm. The IFA and executor then work together to their own benefit to the detriment of the beneficiaries and ‘in breach of the self-dealing rule'.
"Where will writers are IFAs, they tend to work in tandem with a bank, building society or investment provider to persuade clients to make a will and ‘tax planning investments' at the same time," claims Sian Morris, solicitor at Jeffreys & Powell.
STEP also says some IFAs have set up a ‘free' will-writing service in order to try and keep clients' investments on their books, only to scrap the service due to ‘reoccurring problems' with the wills.
Overall, 75% of STEP members claim they have seen cases of ‘incompetence and dishonesty' within the will writing market over the past year, amongst IFAs and other businesses offering will writing services.
David Harvey, chief executive of STEP, says: "It is clear those who charge a fee for writing a will should now be regulated.
"They must have appropriate qualifications and proper indemnity insurance.
"The Scottish government has gone some way towards protecting consumers with the regulation of will writers but people will remain at risk until regulation is extended to include estate administrators across the UK."
Solicitors are regulated when writing wills, but others doing so are not as will-writing is not classed as a reserved legal activity.
Stephen Pett, director of Allied Professional Will Writers says STEP is attempting 'a cheap PR trick against will writers'.
"We need proper standards across the profession requiring solicitors and will writers to work to the same standards and to carry out at least 16 hours a year CPD on wills and lasting powers of attorney," says Pett.
"There are many superb solicitor will writers, and there are far more solicitors who are not competent to write wills than there are will writers, bearing in mind that there are around 120,000 solicitors, and perhaps 4,000 will writers, around 2,500 of whom are regulated."
The Legal Services Board is currently reviewing all reserved legal activities.
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Pot Kettle and Black
I cannot tell you how many Wills I see where a firm of solicitors have included themselves as executors thus looking after their future fee income which generally equates to not only 1% of the estate but an hourly rate for their services. The wills themselves are frequently missing a Nil rate band discretionary trust And in my experience where someone dies and the solcitors are the self appointed executors but the beneficiaries do not wish to use them, they make a charge for their resignation. I accept that bad Wills are written but why do IFA's have to constantly be in the firing line. We are highly regulated these days and a good IFA will have a thorough understanding of estate planning and IHT.
Posted by: Andrea Willson
Balance
Whilst I totally agree with the regulation of wills and am against any arrangement which is to the determent of the client, this article does not reflect the huge majority of IFAs who work closely with and refer clients to law firms. I noticed in a recent publication from STEP that a Grantham based law practice very recently had its head of probate jailed for stealing £215,000 from estates, including her own family members. In the same way I believe this behaviour criminal not typical of lawyers!
Posted by: Mark Chandler
Pot Kettle (absolutely!)
Solicitors may be regulated, but they certainly do not always get it right!!! I have seen several that dont actually do what the clients wanted, in fact I have referred a client to an unregulated Will Writer who understands completely what is required and will do a proper job. Stop stereo typing IFAs/Willwriters/et al - not all of us are corrupt - surprisingly enough some of us even care enough to do a good job for our clients at a reasonable price!!!
Posted by: Daniel T
Bandits everywhere!
Solicitors are regulated but that doesn't stop the dishonest being dishonest in any profession. £84000 for probate charged by a lawyer and was only brought to book when the family obtained the accounts. He paid it back after the court hearing and was struck off but escaped jail.If lawyers have done such a good job why have 70% of the population not got a will. Funny how it kicks off when toes are trodden on. A certificate should be required but regulation only pushes up costs.
Posted by: Peter Taylor
Solicitors, IFAs & Will Writers
This article is suggesting that STEP have singled out IFA's in particular, this is not the case. These problems are largely caused by lack of training and a lack of appropriate professional insurance. Some of the problems are caused by solicitors and some by IFA's. Understandably, as this is an IFA website, the area that has been chosen to focus on has been one invovling IFA's, but the full report actually covers problems in all sectors. If you are interested in the full report, please feel free to look at on the STEP home page www.step.org
Posted by: Daniela Osborne
Rediculous Article
This article is quite outragious really. I suspect that the sort of things that these members of STEP appear to suggest are rife, are in reality a very, very minor percentage of cases. And propably a lot less than the amount of cases where solicitors and even members of STEP get it wrong, deliberately or otherwise!! I am an IFA and a qualified will writer and estate planner with the appropriate PI insurance and over the years I have come across countless cases where solicitors have been incredibly inept in drafting wills and the associated estate planning. I have also come across similar cases where other will writers have made some very basic errors, but not anything like as many cases from solicitors. I think STEP need to get their own house in order before making such wild accusations.
Posted by: J Carrington
A little perspective
I think that Daniela Osbourne's (who is PR, Media & Communications Executive at STEP) is valid. I'm an affiliate member of STEP, and support the campaign to regulate Will Writing in general. There is no doubt some sharp practice out there (as the recent Panorama highlighted) but of course this is the minority. If poor will writing is the minority then fraudulent activity by IFAs is (logically) in the minority of the minority! Just like the increased qualification and requirements in our world increasing Will Writers qualifications and regulation will not guarantee good performance, nor will it remove fraudsters. It will however likely push them down other routes, and 'easier' prey.
Posted by: Alistair Cunningham
Sian Morris 's statement
I suggest that Sian gets hold of some of the CII syllabuses in particular the previous G10 which covers in depth the taxation of trusts, the use of trusts and Inheritance Tax Planning issues and discovers how knowledgable some IFAS can be. I also suggest she brushes up on the term independent which means the opposite of working in tandem with ONE bank or product provider. Sometimes it takes an IFA to show a client the advantages of some investment vehicles in both mitigating inheritance tax and long term care costs. I find her statement, shallow, offensive and along the lines of typical media soundbite to scandalise the valuable contributions IFAS make to families and businesses up and down the country.
Posted by: Jill Turner
Wrong Wrong Wrong
Surely all of the posters must be mistaken. The alleged sharp and tawdry practices by solicitors must be fiction. I know this because the FSA assured me that qualified professionals who are members of a professional body will not rip off their clients and consumer detriment does not exist. Something is wrong...surely?
Posted by: Alan Lakey
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Strengthen the law
No doubt this is being made as a case to regulate all Will writers but given the complete mess and massive cost financial regulation has put us in I would say strengthen the law in such cases so those responsible of abuse can be made to pay. Not more regulations please.
Posted by: Michael Fallas