Estate Planning Guide

Working with financial planners Solicitors Modernising the culture around client engagement at law firms has been high on the agenda of the government and SRA for over a decade now. 2017 marked the ten-year anniversary of the Legal Services Act, and the pressure to open up legal services to facilitate more transparency, competition and a more consumer-friendly service is not letting up. A 2017 report found evidence of a ‘significant disconnect’ between large law firms and their clients. ‘Not a single client interviewed was satisfied with what law firms provide.’ Several Professional Connections clients described their partnerships with firms as ‘superficial’. Mark Smith, market development director at LexisNexis, said: ‘It suggests that law firms need to improve their ability to work in a joined-up manner, focus on identifying opportunities that create mutual value, and start working harder at putting client relationships at the heart of everything they do.’ With this in mind, it’s certainly interesting to note that legal professionals can now be held accountable for not just what they have done but also for what they have not and should have done. The Competition Commission said of increased competition in the legal market, “[suppliers] cutting prices, increasing output, improving quality or variety, or introducing new and better products, often through innovation; supplying the products customers want rewards firms with a greater share of sales. Beneficial effects may also come from expansion by efficient firms and the entry into the market of new firms with innovative products, processes and business models, and the exit of less successful ones.” Meanwhile, the Solicitors Regulation Authority is “seeing a growing market of alternative providers of legal services. These providers are playing an increasingly significant role in meeting the legal needs of people and businesses. Examples include… financial, and estate and tax planning advice, by financial advisers or accountants”. With other professional service providers now able to usurp business in many of the fee- earning areas previously reserved for solicitors and other legal professionals, not only do they need to act to protect their traditional income streams, but, they also have the opportunity to create others. The transactional nature of legal firms’ traditional business model has meant that they typically don’t have regular engagement with their client bases. IFAs, on the other hand, work on the basis of habitual contact with clients, whether it be in annual reviews or in the communications that MiFID II now requires. This kind of ongoing attention to clients and their needs has the potential to identify legal as well as financial advice opportunities. The prospect of being able to provide joined up services to fulfil investment and financial planning advice needs is a significant value- add for solicitors who are, very often, aware when these needs arise, but not in a position to fulfil them. Accountants There is a well-known phrase that “accountants look backwards, financial advisers look forwards”. While there are distinctions between the two, they are not this black and white and can seem much less obvious to clients. Consequently, it is common for individuals and firms to go to their accountants with issues that, as a result of regulatory changes, they are no longer able to advise on, or for which they recognise the knowledge, experience or qualifications of a financial adviser are required. Accountants’ main business generally relates to accounts and tax, although firms do have various specialisms. But accountants have a duty of care that goes beyond processing finances. Like legal professionals, clients place a great deal of trust in accountants, but unlike many legal professionals, a good number of accountants have long-standing relationships with their clients and regular meetings to keep them up to seed with critical issues. It is therefore not unreasonable for them to expect their accountant to be proactive about identifying future financial needs and protecting against future financial risks. Both of these may require the involvement of a financial adviser. While these aspects may not be the most important to an accountant, working together to provide a consistently high standard of tailored customer service, accountants and advisers can not only build their knowledge of the other’s expertise, but they can build a shared reputation larger than the sum of its parts. With customers satisfied with a complete solution and positive word of mouth, both parties are more likely to retain clients, and even attract new ones. The collaboration can also give both the accountants and advisers a USP that makes them stand out from their competition. By working closely with an advisory firm, accountants can access a new set of clients and market their services to interested parties. The same applies when the roles are reversed. In this respect, cooperation is a good way for accountants and advisers to expand their portfolios. Both accountants and legal professionals facilitate people planning for the future, even in the midst of resolving current issues. The strong link between the two, as well as the regular interactions of legal, tax and financial advice make the breadth and depth of knowledge and services offered an important factor in both customer satisfaction and stronger client loyalty. As the advice market becomes more open and intricate, raising the value and scope of the service offered to clients is more than likely going to be key to professional services firms’ success in the future. 95 PROFESSIONAL CONNECTIONS There is some evidence that intermediaries in the legal services sector have been able to improve outcomes for consumers as a result of their better knowledge of the market and their understanding of prices, service and quality. GUIDELINES FOR MARKET INVESTIGATIONS: THEIR ROLE, ASSESSMENT, REMEDIES AND PROCEDURES, COMPETITION COMMISSION 4.1