ETHICS Q & A

Q I am acting for a husband in divorce proceedings.

The matrimonial home is being sold and my client and his wife also wish to surrender their endowment policy and divide the proceeds between them.

Can I make the arrangements for the surrender of the endowment policy without being involved in investment business as defined under the Financial Services Act 1986?

A No.

If you arrange for the surrender of the policy, even by sending off the application forms to the life office, you are likely to be arranging the sale of an investment as defined under the Act and this is likely to be not only investment business but discrete investment business (DIB).

You may only conduct DIB if your firm holds a category 2 investment business certificate and have in house a 'qualified person' approved to advise on life policies.

However, there may well be other options.

The detailed position on endowments and matrimonial work is too complex to summarise here.

A guidance sheet is available from the Professional Ethics Division on 0870 606 2577.

Aide MemoireX The new Indemnity Insurance Rules will be effective from 1 September 2000.

Solicitors must have their new indemnity insurance in place by that date.

X Question of ethics is compiled by the Law Society's professional ethics guidance team.

Send questions to Austin O'Malley, the Law Society, Ipsley Court, Berrington Close, Redditch B98 0TD; DX 19114 Redditch; tel: 020 7242 1222.