Law firm Foot Anstey has lent its support to the Tax Incentivised Savings Association’s work to come up with an industry consensus on restrictive covenants in adviser contracts.
The move follows Towry’s High Court case against Raymond James and seven former Edward Jones advisers. Towry alleged that after its acquisition of Edward Jones, the seven advisers breached non-solicitation clauses in their contracts which prevented them from contacting clients for up to 12 months. All claims were dismissed last week.
In the wake of the case, the Tisa distribution advisory council will start work to establish an industry consensus on how such contract clauses should apply to financial services. Both Towry and Raymond James are Tisa members.
Foot Anstey financial and commercial disputes associate Jonathan Kitchin says the judgment did not address whether strict non-dealing and non- compete clauses are enforceable, so these issues remain outstanding for the industry.
He says: “Tisa’s work in trying to get some consensus on this is helpful. It would be really good for the industry if there was a voluntary code of practice that firms could sign up to which sets out in clear English and in a concise way what the expectations on both sides are.
“It would be good to be able to have an up-front conversation about it.”