Solicitors regulator must relax referral rules, Aegon

Professional bodies should look more closely at post-Retail Distribution Review definitions of independence before banning members from referring clients to restricted advisers, Aegon’s Steven Cameron has argued.

Mr Cameron, head of regulatory strategy at the dutch insurer Aegon, was speaking in the wake of revelations by FTAdviser that the Solicitors Regulation Authority could consider relaxing the rules which currently require members to only refer clients to independent advisers.

Mr Cameron said: “I have much hope that the SRA will have an open conversation on this topic and I hope that the other professional bodies will engage with that.”

He added that he hoped other trade associations should look at their approach to the advice sector in the wake of the RDR and that a “coordinated review” would be beneficial across professions.

Mr Cameron said: “Looking back at this it is rather ironic that the RDR was all about enhancing standards and giving access to advice to more individuals, while we have other professions that may actually be tightening what their members can do.

“We are beginning to build up a picture of different professional bodies all having separate considerations. What would be ideal is if we had a more coordinated review which allowed all parties including advisers to come to a consistent decision.

“If you step back, wouldn’t it be better if we could come up with a well thought-through and consistent decision?”

Mr Cameron cited as an example advisers that may be technically independent themselves, but work for a firm that overall carries the restricted label. In this case that adviser could not have clients referred from professionals required only to use IFAs.

He said: “Aegon’s view has always been that if there are not contractual ties we can’t see why professional bodies would have a problem introducing clients to restricted advisers.

“You could have a firm which gives both independent and restricted advice. That firm can’t hold itself out as independent but can give independent advice.”

Some believe the RDR will spark a migration to restricted advice, as it will become more difficult for advisers to maintain the independent label. Others, such as Openwork propositions and marketing director Philip Martin, believe the drive towards restricted will be fueled by better profitability.

However, recent clarifications from the Financial Regulation Authority have gone some way towards assuaging those fears, with the confirmation that advisers will not have to include Ucis products in order to meet the requirements for ‘whole of market’.