Now is the best time for advisers to forge relationships with solicitors, Sifa said, due to the regulatory issues that solicitors are encountering that is impacting their profitability.
Speaking to FTAdviser, Dave Seager, director at the business development firm for financial advisers and solicitors, said solicitors have been badly impacted by regulation, which he says is having an effect not too dissimilar to that of the Retail Distribution Review.
He described the Legal Services Act, which was implemented from 2007, as a “game changer” for solicitors.
The Legal Services Act was designed to increase competition, as non-solicitors can participate in owning and managing law firms, meaning solicitors can access external capital.
Mr Seager said as a consequence, lawyers are not just competing against similar firms on the high street but now have the likes of the Co-op as competitors.
He said: “Prior to 2007, solicitors were a closed shop environment but due to the new legislation there is far more competition such as the Co-op and in future the likes of Saga and potentially Tesco’s.
“RDR brought professionalism to the adviser industry and advisers can now add value to solicitors as advisers have client relationships which solicitors don’t. Advisers understand feedback and fact finding, etc.
“All the work that solicitors refer to an adviser, whether that be matrimonial, pensions, etc, will always have an investment element and a relationship element so advisers can add value. Solicitors are not doing well profitability-wise, so now is the time.”
There has also been some confusion within the market as to whether solicitors can refer work to restricted advisers as well as IFAs.
Mr Seager said: “We would accept restricted advisers as members but all our 170 members are independent.
“We wouldn’t accept vertically integrated firms or those that are contractually limited. For example, we would accept firms that purely focus on ‘later life’ financial planning and nothing else as they are ‘independent’ in their field.”
To help advisers understand how they can value to advisers, Sifa and Prudential are rolling out a series of seminars throughout the UK, starting on 11 September in Manchester and ending on 14 October in London.
Prudential is sponsoring Sifa’s sixth handbook, Trust Invest, and also the roadshows.
Paul Harrison, head of business consultancy at Prudential, told FTAdviser: “We are working with Sifa to help advisers secure relationships with solicitors. They have a lot to offer solicitors as they are used to being client facing. We want to tell advisers what they can to build relationships with solicitors.”
Mr Seager added: “We will be speaking to advisers about why now is the best time to work with solicitors.”
Prudential will be issuing a targeted communication in mid-July which will detail all the dates and locations.