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Claims&#39 warning for IFAs joining In-Partnership

IFAs joining the IFA network In-Partnership could be leaving themselves and their estates liable to future professional negligence claims, warns a law firm.

Armstrong Neal Financial says the In-Partnership contract that IFAs must sign before joining the network includes a clause entitled, Agreement to bind representatives. It states: “The provisions of this agreement shall be binding upon the personal representatives, trustees or receiver of the designated individual.”

The law firm says this leaves both the IFA and their estate open to indefinite negligence claims.

Armstrong Neal says another clause in the contract states: “The designated individual shall indemnify and keep indemnified the company (without limit) against any liability, claims, loss, damage, costs and expenditure incurred.” The law firm says this means that members, exmembers and their trustees face lifelong liability without limitation.

Armstrong Neal says most other network contracts include clauses making the individual liable for life but In-Partnership is believed to be the only one placing responsibility on trustees of the IFA&#39s estate.

In-Partnership chief executive Stanley Lovell says: “This only applies to where there is a failure on the part of an individual through dishonesty or negligence to do as they should. We are being wholly responsible.”

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