BR Guide FINAL 20 Feb

74 WORKING WITH PROFESSIONAL CONNECTIONS 75 WORKING WITH PROFESSIONAL CONNECTIONS While referrals can be useful, particularly when advisers are building up a relationship of trust with lawyers and accountants, they depend on individual relationships and are unlikely to extend to other members of the law or accountancy firm. They are also always subject to competition from other financial advisers and there is no real scope for joint marketing and business planning. As a result, a corporate relationship between the firms can be a much more attractive commercial proposition. Practical steps How advisers can access business from professional connections 1. PROFESSIONAL QUALIFICATIONS AND ACCREDITATION Consider the professional qualifications, memberships of professional bodies and accreditations potential partners will expect the IFA firm to have (e.g. Society of Trust and Estate Planners (STEP) qualification, SIFA membership). Accountants and lawyers will want to see evidence of the adviser’s competence, in the form of years of experience and/or relevant qualifications. 2. REVIEW AND COMPLY WITH THE BEST PRACTICE GUIDANCE Review and comply with the best practice recommendations of trade and regulatory bodies for accountants and/or law firms (these are similar) for working with financial advisers inasmuch as they apply to companies that should and should not be engaged with. For accountancy firms, this is the ICAEW (and other bodies such as ACCA and ICAS). The Solicitors Regulation Authority (SRA) code of conduct will apply when solicitors make a referral. 3. NETWORK Network via the professional clubs: SIFA, ICAEW, STEP, SOLLA. 4. IDENTIFY LIKE-MINDED FIRMS Identify suitable professional connections (preferably one with which the IFA firm has had previous interactions in order to build up trust and to which the IFA firm has been able to demonstrate its qualities). These should be like-minded firms with a compatible culture to the IFA firm and which offer the possibility of a productive relationship, which is more likely to be the case if the lawyer and/or accountants use no other referees. Ideally, the IFA should offer complementary services to those of the legal firm or accountant. A DPB licensed accountancy firm is worth seeking out. 5. IDENTIFY THE COLP For relationships with solicitors, identify the solicitor’s Compliance Officer for Legal Practice (COLP), which will police the entire commercial relationship. IFAs should look to form a strong relationship with whoever is fulfilling this role at the legal firm and similar position at the accountants, to ensure there is mutual trust. THE FIRM HAS A COMPLEMENTARY BUSINESS MIX OR CLIENTELE THE FIRM HAS A SIGNIFICANT WILLS DATABASE THE MAIN CONTACT PARTNER OR FEE- EARNER IS INFLUENTIAL IN THE FIRM YOUNG GO-AHEAD PARTNERS HAVE A SIGNIFICANT VOICE IN THE FIRM THE LOCATION AND SIZE OF THE FIRM ARE SUITABLE TO A RELATIONSHIP NO OTHER IFA REFEREES ARE ENTRENCHED MOST OF THE OTHER PARTNERS ARE AMENABLE THE FIRM’S COMPLIANCE OFFICER FOR LEGAL PRACTICE UNDERSTANDS THE NEED FOR DUE DILIGENCE THE PARTNERS HAVE AGREED TO RECEIVE A PRESENTATION THE FIRM IS RECEPTIVE TO A CORPORATE RELATIONSHIP THE FIRM IS WILLING TO ENGAGE IN JOINT CLIENT MARKETING EXAMPLE CHECKLIST FOR POTENTIAL PARTNER FIRMS What to look for in potential partner firms Example 1. Ludlow Wealth Management and Donald Race and Newton Solicitors (DRN) have a joint venture that is a separate company to both existing trading entities, called DRN Financial Management, formed as a limited liability partnership, owned by both parties. Clients of Donald Race and Newton Solicitors can access a comprehensive range of independent financial advice through DRN Financial Management LLP. DRN Financial Management’s advisers also comprehensively review their clients’ needs with the potential to uncover legal issues. Example 2. Ludlow Wealth Management has since entered into a further joint venture with Napthens Solicitors, providing Napthens inhouse wealth management services. The company established to undertake these services this time was a limited company called Napthens Wealth Management Ltd, which is also an appointed representative of Ludlow Wealth Management. Example 3. Jones Harris Chartered Accountants joined forces with True Bearing Chartered Financial Planners to form a limited company joint venture called Jones Harris Chartered Financial Planners. The JV is an Appointed Representative of True Bearing Ltd, so the accountancy firm leverages the FCA permissions of the financial advisory firm. Other examples 6. PRODUCE A DUE DILIGENCE STATEMENT Produce a due diligence statement for solicitors and accountants to give to their clients. Depending on the relationship with the accountant/lawyer, it may even be possible to liaise with the COLP to ensure they are happy with the statement’s content. You actually have to understand how their business works; how their fee structure works. You have to understand how they think. GIANPAULO MANTINI FAIRBAIRN ADVISORY LLP 7. PRESENT YOUR BUSINESS CASE Present a business case including why the lawyers and/ or accountants should consider engaging with the IFA firm. Provide the due diligence statement and ensure there is a clearly articulated client service proposition, including an investment “philosophy” and basis of fees/charges. Focus on