The SRA or the Solicitor’s Regulation Authority’s new laws allow client preference to be referred to advisers under restriction. The Law society, which is the spokesperson body for the solicitor establishment firms have, arguments that the SRA decision to relax the conditions needed to refer clients to IFA s for advice on investment could lead themselves vulnerable to claims of negligence. The whole profession of solicitation is afraid of being messed up in the misunderstood and fraudulent business practice scandals that have recently disrupted the working of so many banking and law institutions in the recent past.
The practice of the solicitors regarding investment advice has been so far limited to recommending IFA s that then take care of the deposits of the investor and put the money in bonds and shares that they deem appropriate. The new regulation seeks to penalize solicitors not only for fraudulent action or malpractice, but also to lay them open to compensation suits in the case of mismanagement of the investor’s money by the IFA. In other words the solicitors would be penalized for recommending the wrong IFA.
The SRA seeks to involve the investor more in his investment portfolios instead of sitting back and let the solicitor take care of the details and thus make informed choices. This is seen by many as a welcome move considering the global meltdown of real estate and loan markets in the recent past. Obviously solicitors and their organizations have protested vehemently against such measures since it lays a greater burden of responsibility on their shoulders.
This is a touchy issue, especially concerning the recent run on the markets. The solicitors are afraid of being seen as loan sharks and non caring attorneys who care nothing about the success or failure of their clients on one hand, and on the other hand they are afraid that they will be held responsible for any and every thing that might go wrong with the investment. In such a gray area of right and wrong, of responsibility and guilt it is difficult to take a side and argue for it. The investors need assurance that their money will not be squandered; the lawyers need assurance that they would not be unreasonably made responsible for their advice and the banks cautious and cagey while investing money is schemes in order to generate interests on the deposits in its treasury.
There is no absolute right in this issue. Greed and consumerism and the hope of making quick bucks have led to the latest global economic recession. Blame must be assigned where it belongs and in this case almost all the parties involved are equally guilty. It is the duty or common sense of the investor to keep track of his portfolio, the duty of the solicitor to dispense sound advice and the work if the IFA s to perform their task in honesty and precision. Even more than new regulations an change of attitude is needed that will but the burden on capable shoulders and lead the way to a better economic future. Click here for further legal advice and you can know more about this touchy issue.