Into the Muddy Waters

Into the Muddy Waters

25 June 2026 — by John Gaskell

An independent guest piece. Accountants and solicitors steer trusted clients to wealth managers every day. John Gaskell argues the FCA should examine how these professional referrals work, who discloses what, and where the regulatory line sits.

Why the FCA must examine how the professions refer clients to wealth managers.

Every day, accountants and solicitors steer trusted clients towards financial advisers and wealth managers. It is one of the most influential, and arguably one of the most under-scrutinised, junctions in retail finance. After the motor-finance reckoning, the regulator should no longer leave it unmapped.

By John Gaskell, Founder, TriSynergy Consulting Services

Picture a familiar scene. A business owner sells the company she has spent twenty years building. Her accountant, who has guided her through every set of accounts along the way, says: “you’ll need to think about the proceeds; I know just the firm.” A warm introduction follows, and two decades of trust transfer in a single sentence to a wealth manager she has never met. Somewhere in the background, a referral arrangement, a fee, or a share of the charges she will pay for years, may change hands.

That handover happens thousands of times a week, and it is one of the most important junctions in retail financial services. Accountants and solicitors hold the trusted, multi-decade relationships with exactly the clients who need planning most. Yet three regulators sit around the introduction, the FCA over the adviser, the SRA over the solicitor, ICAEW or ACCA over the accountant, and none clearly owns its conduct. These tend to be muddy waters, and the FCA should take a closer look under the bonnet.

Where the line sits

Start with a question referring firms may not adequately consider: when does an introduction become a regulated activity and what are the wider implications?

The Regulated Activities Order treats “arranging” deals in investments as regulated business. There is an “introducing” exclusion in article 33, but it is narrow. Step a little further, “this firm is excellent, you really should use them”, and you may have made a financial promotion, unlawful under section 21 of FSMA unless you are authorised or exempt. Under the regime, accountants and solicitors may carry on limited activities if they hold DPB permissions but only where these are incidental to, and arise out of or are complementary to, a professional service already being provided. It is a complicated but generally sensible framework, but it was designed in a quieter market.

The restricted-adviser trap

Here is the complication that firms on both sides of the referral fence may not have fully absorbed. The article 33 introducing exclusion is available, but by its very terms, only for introductions made with a view to independent advice, or the independent exercise of discretion. The courts read the exclusion the same way in the Avacade litigation, treating it as available only where the introduction is genuinely made with a view to independent advice. Introduce a client to a restricted adviser instead, and that comfort tends to evaporate: the exclusion does not fit, and the firm may be left needing a DPB licence, FCA authorisation, or another exclusion it has never considered. Many of the best-known wealth managers, private banks and consolidators, household names included, frequently operate on a restricted basis, not an independent one. The mainstream destination for professional referrals is often the very kind of advice the introducing exclusion was never written to accommodate comfortably.

The professional-conduct dimension cuts in a similar fashion. The ICAEW Code of Ethics and the SRA Standards require a client to be put in a position to make an informed decision, which means being told, plainly, that a restricted adviser can recommend only from a limited range. A referral to such a firm can also sit awkwardly with the professional’s duty of objectivity and to act in the client’s best interests. Made well, with full disclosure, it can be entirely proper. Made casually, it is neither.

The lesson of motor finance

Then there is money. Referral fees, introducer commissions and ongoing shares of a client’s charges are common, and not improper in themselves, but disclosure in practice ranges from exemplary to invisible. The courts seem to have just made the risk concrete.

In August 2025, in Johnson v FirstRand ([2025] UKSC 33), the Supreme Court found a car-finance relationship unfair under the Consumer Credit Act because a large commission was poorly surfaced and wrapped in the language of impartiality, a “suitability” document implying a panel of lenders when the dealer was tied to one. The FCA has since built an industry-wide redress scheme on the back of it, finalised in March 2026 and now itself the subject of legal challenge. The read-across is not exact, and the Court warned against lifting its conclusions out of context. But a solicitor or accountant is not a car dealer: they typically owe clients duties of care and candour that raise the bar for informed consent, not lower it. An impression of impartiality plus a muddy disclosure is, in a professional firm’s meeting room, more exposed, not less.

Lay the Consumer Duty over the top and the picture sharpens. The Duty reaches across the distribution chain: a wealth manager must consider how clients reach it, not only what happens once they arrive. A conflicted or opaque referral potentially engages fair value, the avoidance of foreseeable harm and the support of informed decisions alike. Yet responsibility is split three ways. The referral lives in the seam between regulators, each policing its own side of a transaction whose risks sit in the handover between them, beneath a DPB framework that predates the consolidation, vertical integration and introducer and IAR reshaping the market.

The comfort of “just introducing” is written for independent advice, and that is not where many referrals now go.

What the FCA should ask

The FCA should commission a thematic review, ideally a joint one, with the SRA and the accountancy bodies, and industry representatives around the table. It should map how widespread professional referrals are and how they are structured; examine the fee arrangements behind them and whether they are adequately disclosed; test the outcomes clients receive, especially on referrals to restricted advisers; and ask whether the introducing exclusion and the part of the regulatory regime still fit the current market. This is not a call to demonise referrals: quite the reverse. Clients deserve and need joined-up advice, and a well-judged introduction is among the most valuable things a professional can do for their client. That is precisely why clarity serves everyone: it protects clients from the conflicted or concealed activity, and protects the many firms doing this properly from being tarred when an issue surfaces. Regulation should serve to drive, not impede, such outcomes.

And it is increasingly likely to surface. Motor finance shows what happens when a commission-driven referral practice runs for years unexamined and is then judged all at once, retrospectively, at a cost measured in billions, and in undermining trust. The muddy waters need to be cleared, but only by looking into them deliberately, now. The regulator needs to pick up its lamp.

About the author

John Gaskell is the founder of TriSynergy Consulting Services, a newly launched consultancy operating at the intersection of accountancy, law and regulated financial advice. He spent 18 years as Head of Personal Financial Planning at the ICAEW, with more than 30 years across financial planning, wealth management, product development, and working in accountancy and legal firms. He has also advised UK and overseas regulators.

Disclaimer. This article is published as general commentary and reflects the personal views of the author. It is not, and should not be relied upon as, legal, regulatory, tax or financial advice, and it creates no advisory or professional relationship. The regulatory position and case law described, including the status of the FCA’s motor finance redress scheme, were current at the time of writing and may since have changed. Any firm or individual should take their own professional advice on their specific circumstances before acting. Case citations are included for illustration only and do not constitute a full statement of the law. The author accepts no liability for any error or omission, or for any loss arising from reliance on its contents.

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