A solicitor has been struck off for failing to refer clients to an Independent Financial Adviser, among other failings highlighted by the Solicitors Regulation Authority.
The Solicitors Regulation Authority brought a case to the Solicitors Disciplinary Tribunal against Andrew Field, of Kent solicitors Field & Co, based on three alleged breaches of the Solicitors Code of Conduct 2007.
The SRA’s code of conduct states solicitors can only refer clients who need investment advice to independent intermediaries who can advise on investment products from across the whole of the market and offer a fee option.
The SRA started investigating Field & Co in October 2009. The firm ceased trading in October 2010. The SRA’s investigation report highlighted three clients Field had referred to a tied adviser.
The Solicitors Disciplinary Tribunal states the adviser was a partner/appointed representative of a wealth management service. Both the adviser and the firm are not named in the judgment.
The first client had suffered brain damage as a result of a road accident. Field was appointed to deal with the client’s affairs. On the advice given by the tied adviser, Field invested £1.45m out of a total £1.6m in the adviser firm’s unit trust and international investment bond products.
In the second case, Field was acting as joint trustee and executor of an estate that had set aside £300,000 for investment. The adviser recommended the full £300,000 be invested in the firm’s investment bond. In the third case, Field was acting as power of attorney for a woman aged 101. The adviser again recommended the client’s total £300,000 fund should be invested in the firm’s investment bond.
The judgment says, based on Field’s figures, initial commissions would have been more than £43,500 in the case of the first client and £9,000 each for the second and third. Even if the funds made no gains, the annual commission on all three cases would total more than £10,000.
Field received a £25,000 loan from the adviser to which he was referring but no evidence was provided to show he disclosed this to clients. Field failed to disclose the loan as part of an IVA which was agreed in January 2010.
The tribunal found all three allegations were proved beyond reasonable doubt.
It is clear that solicitors are aware of their duty to act in the best interests of their clients and refer to IFAs. This is particularly important after the RDR when advisers may describe themselves as restricted whole of market but are not defined as independent.
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