24 July 2012
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The leading accountants' trade body is to redraft its code of ethics and allow members to refer clients to restricted advisers on a case-by-case basis after the Retail Distribution Review (RDR).
The Institute of Chartered Accountants in England & Wales (ICAEW) has always stated that member accountants can only make referrals to advisers in a position to be able to give objective advice.
The code currently states that IFAs are likely to be able to give such advice, single-tied agents will not and multi-tied agents have to be assessed on a case by case basis by the member looking to make the referral.
The Financial Services Authority (FSA) is reducing the terms used to describe advisers from 'independent', 'multi-tied' and 'tied' to just two - ‘independent' and ‘restricted'.
The ICAEW is changing its code of ethics to reflect the change in terminology.
Its code will change to say that restricted advisers may be able to give objective advice but referrals must be assessed on a case by case basis.
Iain Coke head of ICAEW's financial services faculty said: "Accountants must assess whether a restricted adviser can cover enough of the market that is relevant to meet the client's needs. The code will remain fundamentally unchanged, we are simply altering the terminology."
The changes to the code will be finalised by October, once they have been seen by the ICAEW committee, board and council.
The move follows a consultation launched earlier this month by the Solicitor's Regulation Authority asking whether it should soften its stance to allow referrals to restricted advisers in some cases.
It had previously only allowed referrals to independent advisers.
