Earlier this year, the Solicitors Regulation Authority (SRA) conducted a thematic review of firms offering estate administration services. While the final review is still pending publication, a preview of their findings was shared at the recent SRA COLP/COFA conference. Here’s what you need to know about the SRA probate thematic review and how it might impact your firm.
Client Service Quality Under Scrutiny
As any probate practitioner knows, estate administration involves multiple moving parts, and ensuring high-quality client service is paramount. Given the sensitive nature of probate, where clients are often distressed and overwhelmed, the SRA emphasised the importance of treating clients with care and professionalism.
While the SRA acknowledged that, in general, client service standards are high, some shortcomings were highlighted, particularly regarding client communication on fees and complaints procedures.
Key points to note:
- Residuary beneficiaries should be treated as “clients” for the purpose of complaints. If your firm is acting as an executor, complaints from residuary beneficiaries should be handled as if they are direct clients.
- The Legal Ombudsman often accepts complaints from beneficiaries, reinforcing the need to provide complaints handling information to all relevant parties at the outset.
- The SRA recommends proactively sharing complaints handling procedures with beneficiaries and carefully addressing their grievances.
Fees Transparency and Management
Charging and estimating fees for estate administration can be challenging due to the unpredictability of the work involved. However, the SRA stressed the importance of transparency:
- Clearly outline fee structures to executors and beneficiaries at the start of the administration.
- Regularly update them on fees already incurred and anticipated future charges.
- Ensure compliance with the SRA Transparency Rules by publishing pricing information on your website.
Practical tip: Fully scope out your work and clearly define what your fee estimate covers, with provisions for revising estimates if unexpected complexities arise.
Training and Competence
The SRA also reviewed training and competence in probate work. Their findings emphasised the need for:
- Regular, reflective training for all probate practitioners.
- Documented evidence of ongoing professional development.
Maintaining up-to-date skills and knowledge is crucial, not only for compliance but also for providing clients with the best possible service.
What the Review Missed
Interestingly, the SRA’s presentation didn’t seem to address some significant challenges probate practitioners have faced recently. For example:
- Delays in issuing Grants of Probate by the Registry, which have disrupted administrations and negatively impacted clients.
- The role of emerging technology tools in probate practice. It will be interesting to see if the full report addresses these developments and offers guidance.
AML Compliance in Probate Work
Another area of interest is the intersection of probate work and anti-money laundering (AML) compliance. Probate services, such as managing assets and providing tax advice, fall squarely within the scope of the Money Laundering Regulations.
Firms should consider:
- Conducting source of wealth analyses for estates under administration.
- Assessing and documenting risks where estate assets may include criminal property, whether from direct criminal activity or related issues like under-reported taxes.
This is a growing area of focus, and firms would be wise to incorporate AML considerations into their estate administration processes.
Accountant’s Reports and Client Money Concerns
One surprising statistic from the SRA’s preview was that 8% of firms visited did not have an accountant’s report—a mandatory requirement for firms holding client money. This raises broader concerns:
- Firms must submit an accountant’s report annually, and a qualified report must be shared with the SRA.
- The lack of oversight in some firms suggests the current system may need reform.
This is a reminder for firms to prioritise robust compliance with client money rules to avoid regulatory scrutiny.
What’s Next?
The SRA probate thematic review highlights areas where firms can improve transparency, training, and compliance. While the full report is yet to be published, these early findings provide a valuable opportunity for firms to evaluate their practices and ensure they meet regulatory expectations.
Stay informed: As more details emerge, it’s essential to stay ahead of the curve. Review your firm’s estate administration processes now to identify areas for improvement. By focusing on transparency, training, and AML compliance, you can align with the SRA’s expectations and provide an excellent service to your clients.
For further updates and insights on the SRA probate thematic review, subscribe to our COLP Insider newsletter or get in touch to discuss how we can support your compliance needs.
