In 1988 the Financial Services Act 1986 became law.

It radically changed the structure of the personal finance industry and, almost incidentally, gave the legal profession a unique opportunity to become one of the most important providers of impartial financial advice to the consumer.There have been some remarkable successes in this area, with many firms increasing their revenue by 5%, 10% or even 20% through financial services.

It is estimated that around 1000 firms now give investment advice themselves.

A further 2000 to 3000 actively promote financial services through the simpler permitted third party (PTP) route: working with an accredited firm of independent financial advisers and sharing the extra income generated.

That still leaves several thou sand firms which apparently do not offer any financial services even though they hold investment certificates.

According to Richard Pearce, chief executive of Solicitors Financial Services (SFS), the problem is the fear of getting into something new and poorly understood.

'This is perfectly reasonable.

Firms shouldn't embark on financial services without careful planning but, on the other hand, if they do it the right way, it can be rewarding and beneficial to clients.'SFS was set up by the Law Society specifically to help practices get into financial services as painlessly as possible.

As well as providing advice and training to firms, SFS set up the profession's first national PTP facility, now used by over 800 practices.To help practices minimise the risk of getting into financial services, SFS has established two initiatives.

A free advisory service is available to any firm considering getting involved, to help it to assess whether its practice profile is appropriate.

The firm can then subscribe to SFS, which will provide practical support and guidance on how to get involved in financial services.

Joining the service also enables the firm to access SFS's recently created panel of PTPs, all vetted and approved by the Law Society, which comprises the UK's three largest firms of independent financial advisers (IFAs): Sedgwick, Bain Clarkson and Godwins.

Initially Sedgwick was the sole accredited PTP.

Mr Pearce says: 'We feel we have pulled off quite a coup to secure the services of all three major IFAs.''Members will get a better deal financially than if they go direct to any panel member, and also more choice, since combined, the panel now has 140 branches nationwide.

It is also a contractual condition of joining the panel that our PTPs are forbidden to solicit our members' clients, which can be a big problem for the unwary practice.'This is the second time SFS has evolved in its six-year existence, reflecting the changing requirements of the profession.

'Originally we were called Solicitors Financial and Property Services' says Mr Pearce.

'The property market was booming and the Law Society feared that lenders would compete with solicitors by adding conveyancing to their estate agency services.

We were going to help solicitors get into mortgage advice and property selling.

As it happened, the lenders over reached themselves, and the threat never materialised.'The recession in the property market has been a blessing in disguise for solicitors involved in financial services.

The substantial down-turn in new mortgage lending has encouraged solicitors to develop other areas of financial services, particularly investment advice.

These are potentially far more lucrative because the opportunities are greater and because the sums involved are often very large.

According to Mr Pearce, 80% of the income that SFS members earn from financial services now comes from investment work.'Many practices see hundreds of thousands of pounds flowing through their client account every month,' he says.

'Probate, litigation, personal injury and matrimonial departments can all generate large cash sums for clients that need to be invested wisely to maximise their value.'Solicitors, as impartial advisers to their clients, are in a powerful position to help with financial matters, yet many remain reluctant to get involved.

The poor image of much of the financial services industry, the complex law governing how advice must be given, and the risk of accidentally giving bad advice, are typical difficulties claimed by lawyers.According to Mr Pear ce, solicitors worry far more than they need to about financial services.

'The solicitor does not have to give the advice himself: that is the job of the PTP.

The PTP also takes on the legal responsibility for complying with statutory requirements and regulators' codes of conduct, so aside from certain minimum requirements laid down in the Law Society's rulebook, there is no need to be personally bogged down in technicalities.'The job of the solicitor is not to push financial advice on to the client, but to explain when he or she should be getting such advice and that it should be impartial.

The solicitor can then offer the adviser as a trusted source.

These occasions should arise naturally P for example, when advising the client of the size and likely date of arrival of a settlement cheque.

'The solicitor is making sure that his client gets independent advice of the highest standard, with no ties to any particular institution or financial product,' says Mr Pearce.

'In ensuring this in financial matters he is only doing what he takes for granted when giving legal advice.

Many solicitors consider it a dereliction of duty not to provide impartial financial advice, particularly to the financially unsophisticated client.'In the last two years Mr Pearce has personally visited over 300 practices.

He explains: 'I see the bedrock of the profession as the four-to-ten-partner firm.

Tightly run, everyone knows what is going on, its partners are close to their clients and their affairs.

These firms tend to do well in financial services.

'I do meet firms that have had bad experiences from financial services.

Maybe they took on an expensive in-house adviser who could not generate enough work to pay for himself.

Some have got into a bed with a local PTP without first setting up the proper safeguards as to who deals with compliance, who manages the client, and ensuring the quality of advice.

I often find that partners haven't been sufficiently committed to feeding their PTP with regular work from their clients.

And there are always those practices that, for some reason, just aren't suited to financial services, which is why we started the free assessment service.'Some basic training is vital.

It gets the partners and fee-earners thinking about financial matters and shows them how to interest the client in obtaining financial advice through the practice.

If you are confident about why advice is necessary, you are more likely to offer it.

To help, our members also get regular bulletins in plain English with marketing tips and consumer finance news.' While financial services is not suited to every practice, Mr Pearce believes many more would benefit than do so now.

He also believes it can deliver more than a new source of revenue, although this can be substantial (and with the minimal cost of the PTP route, virtually pure profit for the firm): 'By offering access to sound and reputable financial advice, you are simply looking after your clients' interests to the full.' CASE STUDIES-- Fishers of Ashby de la Zouch, LeicestershireFishers is an eight-partner general practice in the market town of Ashby on the Leicestershire border, with branches in Nottingham handling mostly commercial work, and in Swadlincote, Derbyshire.

Although one of the founder members of SFS, Fishers' financial services side has taken off only in the last 18 months.

Now it represents 2% to 3% of practice earnings, and is still growing.

Partner John Gillions explains what happened.'At first we tried to sell financial services to all our clients, using mass mailshot s and some advertising, but got little response.

We then tried focusing on just those clients who we felt really needed our advice.

We found this to be much more successful.'This new approach coincided with a much greater effort on our part to understand the basics of financial advice, and to put the knowledge to work.

For example, through SFS our fee-earners attended seminars which were very helpful, and I initiated a systematic review of clients' trusts to identify changes in values or personal circumstances that would call for professional financial advice.'Now with greater awareness of financial matters, we can give informed general advice to back up the PTP's detailed recommendations.

Our clients expect this from us, and more important, it gives them confidence in the process.'My advice to any firm thinking about financial services is to go for the individual approach.

A solicitor's big advantage is personal relationships and his client bank.'-- Ellis Fowler Belcher of Bournemouth and Poole, DorsetAlthough a four office firm, Ellis' financial services work is centred on one of its smaller offices, in Canford Cliff, an area dominated by well-off retired people.

The office's caseload reflects this, with a regular supply of probates, trusts and high value conveyances.

Arising directly out of such work, financial services has also become an important source of income, contributing 10% of the office's total annual revenue last year.Nonetheless, the firm does not see extra income as the main advantage of getting involved in financial services.

'We wanted to protect our client's interest, to see that they get into the right hands,' says Paul Naser, partner.

'A good PTP enables this, and since we work as a team, we can monitor the advice given.'Through SFS, Ellis' uses Sedgwick as its PTP, having tried an in-house financial adviser for a year.

Although having an adviser on tap offered the advantages of accessibility and personal familiarity, the practice felt a 'one man' operation could affect the credibility of its advice.We wanted to steer clear of the hard selling, insurance image of financial services,' says Mr Naser.

'Sedgwick is about as far from that as we could get.

Not only are its advisers' earnings not based on commission, so their advice isn't compromised, but it has a national reputation for sound, up-to-date advice which we can trust absolutely.'