Referral Procedure

Solicitors’ compliance procedure for client referrals

1. This procedure should form part of the firm’s compliance plan and will be administered by the Compliance Officer for Legal Practice (‘COLP’). As dictated under the Firm’s Code of Conduct 9.1. The Management, under Compliance and Business Procedures 2.1 ensure the COLP has full authority to this end.

2. The COLP should consult with members of the firm’s management committee and compile a shortlist of impartial financial advisory firms with which the firm has dealt or might in future deal with. Firms on that shortlist might then be invited to tender for the firm’s referral business and to submit a summary of their credentials which would provide evidence of the due diligence conducted by our firm.

3. The COLP will then review the tender submissions, in conjunction with other members of the management committee as appropriate, and recommend the most appropriate, based on the following considerations:

  • The suitability of the financial advisory business specialisations to the work of the firm
  • Cultural compatibility with the firm and its clients
  • The status of the firm and qualifications of the advisers
  • The quality of the financial advisory firm’s client reports and review processes
  • The reputation of the firm and its regulatory record

4. In the likely event that more than one financial advice firm is to be appointed, a panel will be formed, based on the respective specialisations of the firms which are listed.

5. The appointee or panel of appointees will be notified to all members of the firm and ideally no member of the firm will refer clients other than to the appointee or panel of appointees without the written consent of the COLP.

6. It is recommended that the following documents will be used in relation to client referrals:

  • An Authorised Third Party Agreement confirming our firm’s relationship with the chosen financial planning partners.
  • A client referral record summarising the instruction to the adviser referees
  • Terms of Business for financial services leaflet to be provided to clients, which includes SRA disclosure statements and a statement that the firm will not receive any remuneration from the financial advisory business in consideration of the referrals which are made.
  • In light of GDPR and also potentially client vulnerability, whilst a referral without a financial interest does not specifically require ‘informed consent’ to the referral, best practice and date protection, will usually suggest it is gained.

7. The Authorised Third-Party Agreement requires the financial advisory firm to report to our firm any complaints received by clients who have been referred to their advisers and any regulatory action taken against the firm. This will entitle us to terminate the Agreement.

8. The financial adviser at the selected financial advisory partner firm will provide feedback to our referring fee-earner, comprising:

  • A short summary of the advice provided
  • A note of any requirement for additional legal advice which may have come to light
  • Comments made by clients about the quality of the service received from the financial adviser.

9. The shortlist of selected financial advisory partners should be subject to annual review by the firm’s management.