SRA consultation on client money: Our response

The Solicitors Regulation Authority (SRA) closed its latest consultation on the future of client money in legal services on Friday 20 February.

The proposals focus on strengthening consumer protection, enhancing the accountants’ report regime and increasing oversight of firms with changing risk profiles. 

We work closely with law firms and compliance officers across London, Kent and Sussex, supporting them with reporting accountant engagements, regulatory compliance and client money processes. Throughout the consultation, we have actively engaged with the SRA and submitted responses at each stage, putting forward both our professional insights and the views shared with us by our legal sector clients. 

In our latest response, we comment on: 

• Proposed changes to the accountants’ report regime, including submission requirements and cease to hold reports 
• Strengthened responsibilities and potential restrictions for COLPs and COFAs 
• Increased regulatory oversight of firms undergoing growth, restructuring or acquisition 
• The SRA’s confirmed position on residual balances, advance fees and client-to-office transfers 
• The importance of a proportionate, risk-based approach to improving consumer protection 

While we welcome certain aspects of the proposals, particularly moves towards greater transparency, we also highlight practical considerations around cost burden, implementation and the regulator’s capacity to act effectively on increased reporting. 

We continue to advocate for a balanced, risk-based framework that strengthens consumer protection while remaining proportionate and workable for firms. 

You can read our full consultation response here. If you still have unresolved queries and would like further advice from on of our experts, please do not hesitate to get in touch.