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Fisher defends no-deal covenants

Towry chief executive Andrew Fisher has denied that the firm is “the enemy of the consumer” due to the 12-month non-dealing covenants it imposes on its advisers.

Fisher was being questioned in the High Court in London this week by the legal team representing Raymond James and seven of its advisers, formerly of Edward Jones, who Towry is suing for £5.8m over alleged client solicitation.

Non-dealing covenants prevent advisers from working with clients from a previous employer.

Fisher said they are needed to ensure that the firm has enough time to explain its proposition and cement client relationships without commercial interference.

The advisers in question only had non-solicitation covenants in their contracts, which prevent them from soliciting the clients but not from working with them and did not want to sign the non-dealing covenants Towry imposes on its advisers, following Towry’s acquisition of Edward Jones in October 2009.

Defence counsel Chris Quinn, QC, asked Fisher whether Towry is the “enemy of the consumer” because it is seeking to “fetter the consumer’s freedom of choice”.

Fisher said: “The reason the covenant is 12 months is we feel that gives us enough time to explain the proposition, what we do and cement our relationship without the client going elsewhere and ending up in the wrong place, as we see it.”

It was revealed that Fisher’s 20 per cent share in Towry could be worth £160m on an IPO based on a company valuation of £800m.
The case continues.

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  1. Julian Stevens 16th June 2011 at 7:37 pm

    Of course Fisher sees any defection from TL as the client “ending up in the wrong place, as we see it”. The thing is, though, that as far as Fisher is concerned, any client having their money invested anywhere other than wholly in TL funds is the wrong place. It’s obvious ~ the more money TL gets under management, the richer AF and his cronies will be when the planned IPO goes through.

    Given the crappy performance track records of all TL’s funds, it’s hard to see how such an opinion can be based on anything other than brazen self interest. What about freedom of client choice or the best interests of the client? Those things certainly aren’t best served by being invested in poor-performing, high-charging TL funds.

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