Chase de Vere Personal Injury & Court of Protection has always prided itself on being a firm of Independent Financial Advisers
But in a world in which words can so often be lost, misunderstood or misinterpreted, what exactly does ‘independent’ mean in this context? Does being independent really matter? Should instructing solicitors really concern themselves with whether an adviser is independent or not?
Independent vs. Restricted
The Financial Conduct Authority (FCA) considers there to be two categories of financial adviser, which at a high level can be described as follows:
- Independent advisers can recommend financial products spanning the whole of the market, meaning that advice is unbiased and unrestricted.
- Restricted advisers can only recommend products from certain providers. In some cases, they will recommend products from a single provider; sometimes only those products of its own firm.
Only true Independent Financial Advisers (IFAs), such as Chase de Vere Personal Injury & Court of Protection, can give clients full access to the whole of the financial marketplace, enabling a financial plan to be created that is totally unconstrained by any obligation, other than to our clients. We can recommend any products or investment funds on the market, which in turn ensures we can find the right solution to meet the precise needs of our clients.
A restricted financial adviser, on the other hand, may be limited to their own-brand products or platforms, or a limited range of products and funds, and if they use products or funds that are expensive, uncompetitive or perform poorly, they may have a limited range of alternatives to which they can move instead.
Being fully independent means that Chase de Vere Personal Injury & Court of Protection is the expert sitting on our client’s side of the table, always acting in their best interest.
The Importance of Independence
Chase de Vere Personal Injury & Court of Protection is wedded to independent financial advice in the process of making investment recommendations, whether this be in an advisory capacity whereby a portfolio of assets is constructed and maintained by the adviser themselves, or alternatively if a discretionary fund manager is appointed to work alongside the adviser and provide investment management services.
Ultimately, the role of Chase de Vere Personal Injury & Court of Protection is to provide the best routes to financial planning and investment management services for our clients, many of whom are vulnerable.
It is our deep-rooted belief that this can only be achieved without the constraint of having a limited and narrow range of services and products that we are able to recommend and advise upon.
Holistic Financial Planning
As an independent financial advisory firm, Chase de Vere Personal Injury & Court of Protection provides a holistic financial planning service.
Unlike a wealth manager or directly-appointed discretionary fund manager (DFM), who will generally only be concerned with the investment of a client’s assets, we will consider a client’s overall financial objectives. Ultimately, our aim is to create a comprehensive and fully personalised lifetime financial plan that aligns with our client’s needs, values and priorities.
Being specialists in the field of personal injury means that we are also best placed to provide additional specific assistance, as part of our advice service, that most other financial advisers and wealth managers are not equipped to deal with. In addition to the general financial planning services offered by most other financial advice firms, we also offer the following services:
- Maximising state benefits and statutory funding
- Budgeting and sustainability advice
- Periodical payment calculations
- Assistance with tax returns, Court of Protection returns and trust accounts
- Personal Injury Trusts
- Expert witness services
Solicitors Regulatory Requirements
Prior to 2019, guidance in respect of how solicitors may make referrals to financial services providers was contained in the Solicitors Regulation Authority (SRA) Code of Conduct 2011. This guidance was amended in 2013 and removed the requirement to refer to an “independent intermediary”, meaning that since this time it has been permissible for solicitors to make referrals to both independent and restricted financial advisers.
The SRA consultation at this time suggested that the change in guidance was a move towards outcomes-focused regulation rather than prescribing how the outcome must be achieved. This arguably shifted greater responsibility for selecting an appropriate financial adviser onto the referring solicitor.
Under the Code of Conduct 2011, Chapter 6 dealt with the matter of referrals to third parties:
- O(6.1) whenever you recommend that a client uses a particular person or business, your recommendation is in the best interests of the client and does not compromise your independence;
- O(6.2) clients are fully informed of any financial or other interest which you have in referring the client to another person or business;
- O(6.3) clients are in a position to make informed decisions about how to pursue their matter;
- O(6.4) you are not paid a prohibited referral fee.
In 2019, the new SRA Standards and Regulations overhauled the framework of the previous Code of Conduct . The new regulations, whilst simplified and streamlined, are less detailed and specified, perhaps creating ambiguity whereas previously there was none.
Under SRA Standards and Regulations 2019, the above outcomes are no longer present and it seems that referrals are no longer specifically dealt with. Instead, adherence to the key principles is the measure of regulatory compliance when conducting business with clients.
SRA Principles
You act:
- in a way that upholds the constitutional principle of the rule of law, and the proper administration of justice.
- in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons.
- with independence.
- with honesty.
- with integrity.
- in a way that encourages equality, diversity and inclusion.
- in the best interests of each client.
It continues to be our opinion that in many cases the best interests of clients requiring financial advice can only be served by a truly independent financial adviser. There may of course be circumstances in which the services of a restricted adviser may be adequate, however given the complexities and nuances of financial planning for personal injury claimants, solicitors in our experience often find that their client’s very specific needs are best served by a practitioner who is not in any way restricted by the service they are able to offer, or the products/investments they are able to recommend.
Furthermore, there is a growing regulatory focus on service provision to vulnerable clients across a wide range of industries, from communications and energy, to legal and financial services. Financial services can, for one, continue to improve the accessibility of services to clients who can often struggle to comprehend the solutions they are paying for.
This will undoubtedly continue to be a key theme for the Financial Conduct Authority (FCA), and perhaps by extension the SRA, as they focus more sharply on an ageing population and vulnerability in general.
In our opinion Continued protection of best interests and ensuring clients are fully informed can only come from the holistic, independent financial advice process, which offers regular whole of market reviews.
A Collaborative Approach
When instructed to provide financial advice to deputies, we consider our expertise as financial adviser complements that of the instructing solicitor/deputy; this approach creating greater value and constructive outcomes for the client.
Importantly, our commitment to independence ensures that the client receives the very best quality, unbiased and unconstrained financial advice, truly tailored to meet their individual needs and priorities.
For an experienced, impartial view on the investment of lump sums, periodical payments, personal injury trusts, and entitlement to state benefits, please telephone one of our specialist advisers on 0800 082 1216. We will be happy to have a no obligation discussion, or e-mail us at: PICOP@chasedevere.co.uk or visit our website at www.chasedeverepicop.co.uk
Please note, the above is opinion-based and does not constitute individual financial advice.
Content correct at the time of writing.