The next couple of years are going to be interesting for advisory sectors in the UK. Next autumn we solicitors will start to see the impact of the Legal Services Act deregulation and in 2012 financial advisers face the introduction of the Retail Distribution Review.
In some aspects these changes are different but will produce some similar results. The RDR is expected to bring reduced competition to the financial sector in the short term at least, as advisers without diploma qualifications leave the market.
To the contrary, the Legal Services Act is anticipated to increase competition with the expected entry of consumer brands to the profession.
Traditional colleagues would argue that the term ’profession’ is diminished by the entry of ’non-professionals’ in the market.
Where changes in both sectors are similar is that they are designed to highlight clients’ best interests. Transparency, value for money and a fair outcome for clients will be central to the service of financial and legal advisers alike. We will all be monitored to ensure we give the right, or at least understandable, advice.
Currently there are no restrictions regarding recompense for referring clients to third parties. Conveyancing referrals are an obvious example.
Increasingly advisers will have to explain why they chose that supplier. Quality of service will be ever more important and referring a client to an unknown panel firm might not be deemed the most advisable option for a client.