The Complete Advisor: One Attorney’s Case for Ancillary Practices

Summary: A legal firm and attorney were being sued for negligence in a car accident case. The plaintiff claimed that the lawyer didn’t file the necessary paperwork on time, resulting in a lost settlement. The court ruled in favor of the plaintiff and awarded them a large sum of money. When people come to a lawyer for help, they are often facing tough and scary situations. The lawyer has to listen and make the client feel better, even if the problem is not directly related to the lawyer’s expertise. For example, a lawyer who mainly helps with wills and trusts might also need to give financial advice. This can create ethical issues, but as long as the lawyer explains everything clearly to the client, it should be okay. The lawyer always has to do what’s best for the client, no matter what. Attorney-client privilege in Florida means that if you talk to a lawyer about getting legal advice, what you say is private and cannot be shared with anyone else. This applies even if you don’t end up hiring the lawyer. To make sure the privilege applies, you should clearly tell the lawyer that you are seeking their advice. If a financial advisor understands when the privilege applies and tells their clients about it, there shouldn’t be any problems when they also act as their clients’ advisor. A financial services professional has a duty to recommend investments that are suitable for their client’s financial situation, risk tolerance, and time horizon. They also have to conduct business with honesty and fairness, and provide relevant information to the insurance company for any policies they sell. This may create a potential conflict of interest, but if the client understands the purpose of the insurance, it can actually benefit them. As an insurance agent, it is important to always be completely honest with the insurance company when filling out applications for clients. Even if the information may seem borderline relevant, it’s better to give too much information than too little. If you don’t disclose enough, the insurance company may not pay out a claim in the future. Some clients, like lawyers, understand this and make sure to include lots of extra information with their applications. It’s important to explain to clients that being honest with the insurance company is necessary to make sure their policy will actually protect them in the future. The professional ethics committee of the Bar Association has rules about attorneys receiving fees for referring clients for investment advice. They say it’s okay if the attorney passes on the fee to the client or uses it to offset legal fees. But if the attorney is also giving investment advice, they can’t share fees because the legal and nonlegal services can’t be separated. I asked The Florida Bar’s Ethics Department if I could serve as a financial advisor for a client whose trust I also wrote as a lawyer. They said no because it would be like selling financial products to a client I also give legal advice to. This seems unfair to lawyers who are more involved with their clients and know more about their financial needs. I think their decision is based on a past opinion that had ethical problems and doesn’t really apply to what I do as a complete advisor. An attorney wanted to sell insurance to his law firm’s clients and asked if it would be a problem to give them legal advice about their insurance. The committee said it would be a conflict of interest because it blurs the line between legal and financial services. I agree that a person who sells insurance and gives legal advice should keep those roles separate. They should still make sure they’re giving the best advice for the client’s needs, just like any other financial advisor. The committee’s rationale is based on a rule that says a lawyer should not take on a client if there is a conflict of interest, and the client cannot properly agree to it. However, if the lawyer is thorough and does their job well, there shouldn’t be a conflict. For example, if a lawyer creates a trust for a client and then provides financial services, there’s no conflict because the lawyer knows the client’s needs and can provide the best help. This is similar to accountants who also provide financial services to clients. The American Institute of Certified Public Accountants allows CPAs to provide financial services to their clients and even created a special certification for it. This shows that CPAs can still be independent while offering financial services. I think The Florida Bar should do something similar for lawyers going into financial services. As a complete advisor, I have tried to follow the rules and even considered giving discounts to clients who use both my legal and financial services. This could benefit everyone, but it might raise legal issues for financial professionals. I suggested a discount on legal fees to my insurance company, but they said it could be rebating, which is giving an illegal incentive to buy insurance. I don’t think it’s rebating because the discount would be for future business, not to get them to buy insurance from me. It’s important for professionals like lawyers to put their clients’ interests first, and the public expects us to have high ethical standards. My clients trust me as a lawyer, not because they think I can give financial advice, but because they believe I hold myself to a higher standard. The question of what counts as a “legal service” has been debated for a long time, but it’s pretty clear that financial services and products are different. Even if a financial advisor is also a lawyer, they can still give helpful advice without it being considered a legal service. The American Institute of CPAs also doesn’t see a problem with CPAs doing financial services. Basically, as long as the advisor explains their duties and responsibilities clearly, there shouldn’t be a conflict of interest. Many attorneys, especially those in tax law, have the potential to become great advisors for their clients. They understand financial products and how they affect tax and estate planning better than many financial professionals. But they need more guidance from the Bar on how to do this before they can become complete advisors. Having attorneys as complete advisors would raise the bar in the financial services industry and give clients one trusted person for all their problems. It would also lead to better service for clients. But for now, it’s unclear if attorneys can provide non-legal services in accordance with the rules. Stephen A. Taylor is a lawyer in Miami Beach who specializes in helping people with their wills and trusts. He’s really good at helping people plan for the future and make sure their money is taken care of. He also has licenses to help people with their investments. This article is from the Tax Section, and it’s all about helping lawyers do their job better.

Source: https://www.floridabar.org/the-florida-bar-journal/the-complete-advisor-one-attorneys-case-for-ancillary-practices/