Honister Capital administrator Grant Thornton says it has now received “clear and definitive” legal advice that trail commission payments are owned by the company and not individual advisers.
In a letter to creditors last week, Grant Thornton says following the legal advice commission will be transferred to the administrators and IFA firm MacRobins.
Grant Thornton sold Honister’s recurring and pipeline commission to MacRobins after it went into administration.
Advisers were forced to pay MacRobins a one-off charge of between 7 per cent and 53 per cent of recurring annual commission to novate their clients to another firm in bulk, or go direct to clients and obtain individual transfer of agency agreements.
A creditors’ note says 216 advisers have paid to novate, amounting to 36 per cent of reauthorised advisers.
MacRobins has so far raised a total of £685,000 through the payments. Around £266,000 relates to Honister Partners, £228,000 to Burns Anderson and £191,000 to Sage Financial Services.
IQ Financial Advice director and former Honister Partners appointed representative James Espin says: “Most advisers will have collected individual transfer agreements from clients and will not be affected by the fact that Grant Thornton has had the commission ownership clarified.”
Grant Thornton says there were 192 complaints against Honister Capital when it was appointed in July and a further 112 have been made since.
Of the 304 complaints, 167 relate to Burns Anderson, 84 to Sage Financial Services and 47 to Honister Partners. The origin of six complaints is unknown.
Honister’s former professional indemnity insurer Liberty Mutual claims it is not liable and complaints are being dealt with by the FSCS.
Grant Thornton says it is currently investigating the restructure of Honister Capital in December 2011, which saw its profitable direct arm Willis Owen move to a separate company.