Introductions And Referrals Flashcards
What does CCS 5.1 require in relation to introductions and referrals?
a) clients are informed of any financial or other interest which you have in referring the client
b) clients are informed of any fee sharing arrangement
c) the fee sharing agreement is in writing
d) you do not make or receive payments in relation to clients who are subject to criminal proceedings
e) any client has not been acquired in a way which would breach the SRA’s regulatory arrangements
Who should clients be introduced to for advice on investments?
Independent financial advisers
What are the rules for introductions relating to claims in respect of personal injury or death?
S.56(1) LAPSO 2012 prohibits introductions in consideration for a referral fee.
Any payment must be consideration for the provision of services or any genuine reason (s.57(7)).
Can an own interest conflict be avoided when receiving introduction fees?
Yes, if the referral is motivated purely for the benefit of the client, and the financial benefit is a by-product
Can commissions paid in relation to financial products be kept by the firm?
Only if the client allows the firm to (SRA Guidance).
What is fee sharing/referral arrangements?
Where you make a payment to a third party for introducing the client to you.
The payment can be a fixed fee or calculated as a percentage of the amount being charged to the client.
What is good practice when managing a fee sharing situation?
- Make a statement to the client that your advice will be independent
- Provide confirmation to the client that any information disclosed to you will be confidential
- Regularly monitor any potential client conflict issues
How does the Bribery Act 2010 affect solicitors?
- Due diligence: ensure that the firm’s business contacts comply with an anti-bribery policy
- Corporate hospitality and gifts: prevent giving or receiving gifts where it influences a business decision
- Referral fees: must be careful fees cannot be considered bribes
