Pennsylvania Restricts Lawyers as Financial Advisors

Pennsylvania will be the first state to restrict the ability of lawyers to give financial advice.  Since January 30, lawyers who are state or federally licensed financial advisors or insurance agents have been barred from recommending or making investments for clients if they or their family members have financial stakes in the transactions. 

The new rule implemented by the Disciplinary Board of the Pennsylvania Supreme Court reflects the outgrowth of a longstanding prohibition against lawyers accepting referral fees from non-lawyers.  Beyond the ban against profiting from a financial transaction, the board will also prohibit lawyers from giving financial advice unless they have specific registrations with the state or the SEC.  These new prohibitions open up Pennsylvania lawyers to potential sanctions from the board ranging from a meeting with the chief counsel to disbarment. 

See Ted Knutson, Pa. First State To Restrict Lawyers As Financial Advisors, Financial Advisor, Jan. 13, 2015.