According to Peter Jones, the founder and former chief executive of Leeds-based UK Wealth Management, he and Regulatory Legal Solicitors’ Paul Crutchley and Gareth Fatchett have been working on the new business concept for the past 18 months.
They are now at the stage where they are talking to around 15 to 20 prospective IFA firms about becoming partners in the venture, which has been set up as something called an alternative business structure, or ABS.
None of these 15 to 20 firms are offshore or international IFAs, but Jones said there was no reason why advisory firms with offshore clients might not be considered for partnership in the new business – which is being called Private Client Solicitors – assuming they otherwise met the criteria.
Jones left UK Wealth Management in 2011 – which he founded in 2008, incorporating another business he’d started in 1993 – and it was subsequently sold to Duke Street, the private equity firm.
Jones stressed in an interview that the new business is not intended to offer a “package of legal services" to advisers in the vague hope that they might find some of them useful.
Rather, he added, it is an LLP structured-entity, of which “suitable partner IFA firms” would become partners with him, Crutchley, Fatchett, and the other yet-to-be determined IFA partners, in order to benefit from having “seamless” (and presumably cheaper) access to the types of legal services that advisory firms typically require. These, he said, would include wills, trusts and probate solutions.
“There is no doubt at all that there is a demand for this among the more involved financial planning community,” Jones said.
"They are already exposing those needs for their clients, and in many cases are a little frustrated that they can’t find the right solutions. We’re just helping them to meet that business need."
Jones, Crutchley and Fatchett say they have extensively spoken to and tested both the IFA and legal markets over the last few months in order to hone their business model.
A key element of that model, according to Jones, is specialist software that will enable the firm’s lawyers to easily access much of the data on clients that the advisers gather as part of the know-your-client information-gathering they are obliged to do before they are allowed to give them any advice.
"It’s clear that a lot of the better financial adviser firms have been using software very well, to help their clients, and this would just be an extension of that.
"However, I do want to be very clear on one point: we’re not intending to train financial advisers to become lawyers,” Jones added. “The advisers won’t be involved in giving legal advice.”
If there were a demand for tax structuring and accountancy services in addition to legal services, these might be accommodated by the model as well, Jones noted.
“Bear in mind that what we will have here will be a number of high quality, like-minded, quite possibly chartered financial advisers, who would, in the case of certain of the smaller firms, normally have to outsource to [access] that kind of advice.
"Anywhere that it was felt sensible to include that kind of support, if our members would like it, and if we can deliver it, we would look to develop down those paths."
Nemesis of Harlequin
Regulatory Legal has been in the public eye recently for its role in trying to help investors in an Essex-based sales arm of the Harlequin luxury property group to get their money back.
As reported, Harlequin’s problems began to surface in January, after the Financial Services Authority issued an alert on the company, and on 1 March, contacted providers of self invested personal pensions to ask them whether they had any clients invested in the firm, which was not regulated.
In March, a BBC documentary that was to have looked at Harlequin was cancelled, and the producer involved in it subsequently resigned. In April the company applied to go into administration. By 1 July, a joint administrators’ report was revealing that the Essex company was owed some £86m by “the various Harlequin companies” located outside the UK.