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Bankhall wrap warning to advisers on client data

‘Intermediaries handing over one of the most valuable parts of their business to a third party’

Bankhall says there is no benefit in joining a network because they offer advisers no protection from liabilities arising from complaints against them.

The firm says it is concerned that many advisers believe joining a network protects appointed representatives from regulatory and financial liability in case of complaints.

Marketing director Richard Howells says: “What is the benefit of joining a network if the financial liability is passed back to the individual adviser? People join networks for protection against that liability. The network principal gets a slap on the wrist from the regulator but, in terms of cost, it falls to the individual.”

But both Falcon and Burns-Anderson say networks do add value by mitigating business risk which reduces the likelihood of complaints.

Falcon chief executive Allan Rosengren says: “Of the 15- odd networks out there, some are more hands-on than others. Their role is to add ano- ther layer of protection by risk-managing every piece of business. Although the network is ultimately responsible for the action of its ARs, within a contract, if there is the need for a settlement, it would be settled by the individual, not the network.”

Burns-Anderson head of marketing Adrian Lewis says: “We do have clauses written into individual member contracts and they are ultimately responsible for the advice they give. However, we pride ourselves on the guidance that we give to avoid complaints coming back to our advisers in the first place.”

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