Ex-advisers have received demands from debt collecting firm CBC Inter-national which has been employed by the national IFA to claw back thousands of pounds in loans which were made to help them start up in business.
Two advisers, who want to remain anonymous since they are planning to reapply for FSA authorisation, told Money Marketing that they were forced into paying off the loans with their credit cards.
As part of its expansion project, Inter-Alliance, which merged with Millfield last month, handed out loans of £1,250 each month for three months to former paraplanners to help them become IFAs.
But many of the new IFAs found that three months was not enough time to establish a business model as they did not have a client base and many closed down.
One of the advisers says: “The simple fact is that three months is not enough time to get an IFA business up and running. I offered to pay the money back in instalments and they were not happy with that.”
Millfield/Inter-Alliance was unavailable for comment on the matter.