Solicitors have shied away from providing financial services due to lack of vision, a leading figure in the financial services industry said recently.
Karl Snowden, professionals' development director at Allied Dunbar, said there were very few exceptions to the rule that the provision of discrete investment business advice could be "a perfect and valuable addition to a service".
Consumer demand is growing for the type and quality of financial services advice which only a law firm can provide, he told delegates at The Lawyer conference Financial Services – an expanding niche market for solicitors.
He predicted that the welfare state would no longer provide for pensioners, and that individuals would have to look after their own financial future.
"With all these pressures it is vital that a legal adviser with the best interests of the client addresses these needs and provides appropriate, timely and unbiased solutions," he added.
He quoted a survey conducted two years ago which revealed that 16 per cent of those buying a financial service had talked to a solicitor when making a purchasing decision while 17 per cent had talked to a chartered accountant.
Despite this, only six per cent of financial services and products in 1993 were sold through professionals. The following year saw a one per cent increase to seven per cent.
Snowden predicted that the trend would continue and would reach at least 10 per cent by 2000. And he said that consumer advisers had long been propounding the benefits of fee charging for financial advice.
He said: "There will be an inexorable move towards this method of remuneration within the industry, certainly among IFAs with medium-to-high net-worth clients."
This would happen as smaller IFAs either became tied agents of a large financial services group, joined networks such as DBS Countrywide or were swallowed up by one of the nationals such as Sedgewicks. Independent advice would be increasingly hard to find from professionals best qualified to give it.
This would cause consternation among full-time independent financial advisers, he said, adding that it would also place professional practices at a major advantage since clients expected to be charged a fee when they went to a law firm.
Benefits included client retention as well as cashflow and profit. "An industry specialist should be able to generate over three times his or her remuneration in fee or commission income," he said. "A specialist earning £50,000 per annum can therefore produce £100,000 pure profit for the practice."