As a privileged confidant at key moments in our personal and professional lives, lawyers are often confronted with questions that go beyond the strictly legal framework to touch on finance and wealth. The dividing line between legal advice and investment recommendations can seem very fine. It was to provide a framework for this second activity that the financial investment adviser (CIF) statusThis is a regulated profession designed to protect investors. The question of the compatibility of the lawyer's robe and the FIA hat is therefore far from anecdotal: it raises fundamental ethical and practical issues. This article explores the possibilities, limits and incompatibilities of this dual positioning, based on our experience in the field. expertise in banking and financial law.
Lawyers and financial investment advice: a possible ancillary activity
Financial regulation has been designed to clarify roles and protect investors. In this context, particular attention has been paid to the situation of professions that are already regulated, such as lawyers.
The principle of excluding regulated professions from FIA status
When the FIA status was created, the legislator established a principle of exclusion for members of the regulated legal and judicial professions. The idea was not to prohibit a lawyer from providing advice with a financial dimension, but rather to avoid superimposing two distinct regulatory frameworks. The Autorité des marchés financiers (AMF) confirmed this approach, taking the view that the regulations governing professions such as lawyers, notaries and chartered accountants already offered a framework of guarantees deemed satisfactory for the protection of clients. In other words, the professional ethics and obligations of lawyers are seen as a sufficient basis for financial advice, provided that it remains within the limits of their professional practice.
The provision of financial advice in addition to legal services (divorce, property)
Lawyers often work at the crossroads of law and finance. In divorce proceedings, for example, the liquidation of the matrimonial property regime involves valuing and allocating complex financial assets. Similarly, as part of the management or transfer of family assets, lawyers are called upon to analyse securities portfolios or savings products in order to propose optimal legal and tax solutions. In these situations, financial advice is not the main activity, but an essential accessory to the legal service. The aim is to inform clients of the financial implications of their legal choices, not to recommend that they take out a specific product, as a financial adviser would do.
Respect for the limits and ethics of the legal profession
This ancillary activity can only be carried out in strict compliance with the professional regulations governing lawyers. The ethical obligations relating to conflicts of interest, professional secrecy and the fixing of fees are at least as restrictive as those imposed on FIAs. A lawyer can only give financial advice if he is totally independent of the promoters of financial products. His advice must be motivated solely by the interests of his client, without any form of commission or third-party remuneration. The service must remain intellectual and legal, and the lawyer must never act as an intermediary in the subscription of financial instruments.
The challenges of the "dual role" of lawyer and FIA: incompatibilities and challenges
While the provision of financial advice is possible on an ancillary basis, the adoption of FIA status by a lawyer raises difficulties that are difficult to overcome today. The two professions respond to logics and obligations that, on fundamental points, are radically opposed.
The lawyer's professional secrecy in the face of the obligations of CIF status (tracfin, amf)
Le professional secrecy is general, absolute and a matter of public policy. It is an essential pillar of the relationship of trust with the client and guarantees the right to defence. Conversely, FIAs, like many players in the financial sector, are required to report suspicions to Tracfin, the French unit for combating money laundering and the financing of terrorism. This direct reporting obligation is in direct contradiction with lawyers' professional secrecy. How could a lawyer report a suspicious transaction involving his client without violating the confidentiality of the information that the client has entrusted to him? This incompatibility is one of the major obstacles to merging the two statutes.
The constraints of the Monetary and Financial Code versus the ethics of the Bars and Law Societies
Lawyers who adopt the status of FIA would find themselves subject to a dual set of potentially contradictory rules. On the one hand, they would remain bound by the essential principles of their profession, as set out in the National Internal Regulations (RIN) and supervised by their Bar Association. On the other, they would have to comply with the provisions of the Monetary and Financial Code, the AMF General Regulation and the code of conduct of the FIA association to which they would be obliged to belong. This duality would create legal uncertainty for both the professional and his client. For example, the rules on canvassing, which are authorised under certain conditions for FIAs, are fundamentally alien to the ethical principles of the legal profession.
The amf's control and disciplinary powers over cifs
Lawyers are subject to the control of their peers, under the authority of the President of their Bar. Disciplinary powers are exercised by the Bar's Disciplinary Board, an independent professional body. By becoming a CIF, a lawyer would be exposed to supervision and disciplinary powers of the AMF. This submission to an administrative authority outside the professional order would undermine the independence of the lawyer and the very organisation of the profession. Accepting this dual control would be tantamount to creating a breach in the system of self-regulation that guarantees the protection of litigants.
Towards specialisation or clarification? prospects for development
Faced with these incompatibilities, the legal profession has considered ways of meeting the needs of its clients for wealth and financial advice, while preserving its fundamental principles.
Proposals from professional bodies (Conseil national des barreaux)
Based on the conclusions of the Uettwiller report, the Conseil National des Barreaux (CNB) has clarified its position. The report states that while lawyers may engage in CIF activities on an ancillary basis, they are not entitled to CIF status, unless they renounce their title and membership of the Bar. The ethical difficulties, in particular the requirement to be subject to AMF supervision and to report to Tracfin, were deemed insurmountable. Rather than seeking to merge its statutes, the profession is focusing on developing its role in asset management and advice. It intends to promote recognised expertise, for example through the creation of a new specialisation, which would recognise the know-how of many lawyers already skilled in wealth and tax optimisation, in complete independence from financial institutions.
The example of foreign legislation (United Kingdom)
Consideration of the changing role of the lawyer can be enriched by observation of foreign systems. In the United Kingdom, for example, solicitors can give advice on financial investments. For this specific activity, they are subject to the rules and authority of the Financial Conduct Authority (FCA), the British equivalent of the AMF. They are therefore registered with this authority for the part of their business that relates to financial advice. This model shows that regulated cohabitation is possible, where a profession retains its main body of rules while being subject to sectoral regulation for a clearly defined ancillary activity. Such an approach could inspire future changes to the French framework, provided that solutions are found to preserve professional secrecy.
Solent avocats: your advice on the link between law and finance
The relationship between property law, company law and financial regulations is a complex area that requires detailed analysis and a global vision. Legal choices have financial consequences and vice versa. To help you navigate the confluence of law and finance with confidence, our firm can provide you with the following services expertise in banking and financial law. Contact us for an analysis of your situation.
Sources
- Monetary and Financial Code
- Law no. 71-1130 of 31 December 1971 reforming certain judicial and legal professions
- Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments (MiFID)
EN 
FR