How accountants can offer financial-advice referrals without becoming regulated

Under the Financial Services and Markets Act 2000, advising on specific investments — which pension to move, which fund to hold, whether to transfer — is a regulated activity. Carrying it on without authorisation is a criminal offence, and “I was only trying to help” is not a defence the courts recognise.

The line sits between generic and specific. An accountant can explain how pension tax relief works, what the £60,000 annual allowance is, or that dividends and salary are taxed differently. All generic. All fine. The moment the conversation becomes “you should put £20,000 into that SIPP”, it has crossed the perimeter. Clients rarely notice the boundary; they simply ask “what would you do?” — which is precisely why accountants need a rehearsed answer that is not advice.

Introducing a client to an authorised adviser is not a regulated activity, provided the accountant sticks to introducing. The safe shape: no comment on products, no steering towards a particular investment, and a genuine handover to a firm the accountant has checked on the FCA Register — permissions, status, disciplinary history, two minutes' work.

Professional bodies add their own layer. ICAEW and ACCA members must disclose any commission or referral fee to the client, and ICAEW's DPB (Investment Business) licence permits certain limited activities for those who hold it — though most firms find introducing covers what their clients actually need. Two habits keep the arrangement clean:

• Written disclosure of any referral fee, in pounds where known, before the introduction proceeds.
• Client consent recorded, not assumed.

Most accountancy practices refer ad hoc: a name scribbled in a meeting, no record, no follow-up, no idea whether the client ever called. That serves nobody. The client may fall through the gap at exactly the moment — a business sale, a retirement, an inheritance — when advice matters most.

A process looks different: a shortlist of vetted advisers, a standard disclosure letter, a log of who was referred, when, and what happened. The log doubles as evidence for the institute if anyone ever asks, and it reveals a number most practices have never seen — how many advice-shaped questions their client base generates in a year. It is usually more than anyone guessed. Referral platforms such as SmartPeer exist for exactly this: tracked referrals with generated disclosure letters, so the paper trail builds itself.