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Honister administrator warns providers it won’t approve bulk transfers

Honister Capital administrator Grant Thornton has contacted product providers warning them that client agencies remain the property of Honister and the group will not approve bulk transfers at adviser level.

Earlier this month, Standard Life and Aviva said they will accept applications for bulk transfers of clients from ex-Honister advisers who are becoming reauthorised with new networks or firms, without the consent of Grant Thornton.

In an email to providers this week, Grant Thornton says: “Please note that the agencies remain the property of the group. Advisers will need to obtain authority from individual clients for the transfer of their agencies as we will not be agreeing to the transfer of agencies at adviser level. We can confirm that you should continue to pay the amounts due into the group’s accounts as normal.”

A Standard Life spokesman says: “Our position remains unchanged. We have terminated our relationship with Sage Financial Services and Burns Anderson, subsidiaries of Honister. We will deal directly with the individual advisers to accept bulk transfer requests to place affected clients under another FSA-registered firm on the condition it does not breach any restriction, obligation or duty they hold to their existing network.”

An Aviva spokesman says: “We are continuing with the transfers as planned.”

Honister Capital, which includes advisory firms Burns Anderson, Sage Financial and Honister Partners, went into administration on 3 July after it failed to secure professional indemnity insurance. The group had over 900 self-employed financial advisors across the brands.

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. If Aviva & Standard Life do this they are hurting the rest of the IFA community. While the agencies remain at Honister the trail commission goes to Honister and this can be used to meet client claims. As soon as the agencies are moved the FSCS will have to pay the claims and so all us other IFAs who’ve never worked for Honister will be meeting the Honister’s IFA’s claims. THANKS AVIVA AND STANDARD LIFE!!!

  2. In rely to Dis-Honister – Lets all hope you meet a sad and lonely end. It must be due to you soon.

  3. Great call Dis-Honister. I think it is only right the clients should continue to pay their fees to an unauthorised organisation who wont offer them any service or advice whilst the clients adviser is treated like dirt and faces an uncertain future.

    In fact I think it sounds like a great idea to use the clients fund based to pay for claims for other clients that sounds very fair.

    I also think insurance companies should make sure the break relationships with adviser, surely one with GT will be much more beneficial. That would make great business sense (along with receiving 15000 LOA’s and about 800 new agencies).

    As an ex honister adviser I just hope dis-honister you never find yourself in the position we are in through absolutely no fault of our own. This industry is far too quick to point the finger and make gross assumptions.

    There by the grace of God….

  4. I have seen so many comments from other IFA’s on this subject on diffrent web sites, its as thoughbthe Honister advisers have done wrong, most of these business under Honister are very profitable and very sound, Honister went into admin due to having been taken on some very old network with lots of liabilities, the problems are these situations could get even worse with liabilities lasting forever, I have seen some peope, saying that why should they pay increased fees, as they are already paying over a £1000 per month, at Honister I used to pay £2500 per month for the support and PI.

    It honister and grant thornton at fault not the members, and if Grant Thornton allowed novation if we took the liability the problem would not go too the FSCS.

  5. Dis-Honister should NOT be flamed for his comments which are after all correct.

    I would agree that bulk transfers should be allowed but ONLY on the condition that any new company take on all liabilities under a personal guarantee.

    They should stand by there advice good and bad and not see this as Phoenix opportunity.

  6. I would also say that you had to have your head well buried in the sand not to see this coming. Honister advisers had a duty to clients to ensure their business was sound on every level.

    We recently went Directly Authorised having looked at all Networks and it didn’t take us 5 minutes to discount Honister. Due diligence needs to be an ongoing process. You have to take some of the blame here and not just point fingers at others when you took your eye right off the ball.

  7. Hi Be Fair

    I would be delighted to take back all my clients with all the liability, no issues whatsover I would sign the paperwork immediately. I am sure I can speak for 99% of honister advisers who would gladly do this.

    The preapproval regieme was really tough for the last 3 years. I believe (speculation) the damage was done by individuals. It doesn’t take many bad eggs.

    This doesn’t mean that there isn’t blame, but that should be on the management who should have been wise to the weaknesses in certain controls in place.

  8. If it makes you feel better dis-honister as a now re authorised adviser I will be paying my fair share towards this the same as you.

    Likewise completely blameless like you.

  9. @anon 12.29pm

    Our Fair share is ZERO

    Your Fair Share is 100% of your future claims

    So no i doubt very much it will make dis-honister feel any better!

  10. My agreement with Honisters included the clause that Honisters would make every endeavour to cooperate with transfers of clients to other advisers or firms if I left.
    I have been with Honisters 4 years but they are now receiving the commissions built up over 30 years.
    They are not servicing the clients, I am under our new authorised firm.
    I did not have any pension transfers, Arch Cru, Key Data or other dodgy business.
    If the administrators get away with their action it will totally ruin my retirement, if not my existing business.
    Is this fair?
    I do sympathise with the liklihood of claims to FSCS but I will be sharing this, but without the income to pay it.
    The vetting of business in the four years I was in Honisters was very strict and the dodgy business would, I think, have been written many years ago.

  11. What you also have to remember that leaving a network is like getting divorced from a partner who does not play ball, they don’t want you to leave and make up all sorts to prevent it, the fees for leaving where outrageous, with six months fees in advance and 30% retention for six months,on an average turnover of say £200,000 this would have been over £42,000, when I started 6 years ago there where no issues with Burns anderson. the problems come when they buy other companies and merge, it sounds to me like a few bad eggs have ruined it for everyone, it also sounds like the FSA are on to these guys and they will strugle to get re registered, so some good will come out of it, if any IFA’s out there were getting trail for clients that they don’t see any more then the compnies should stop paying this to anyone and send it direct to the FSCS and reduce all our leivies, as you should not get trail after RDR for clients you do not service ar don’t know the address to write to them to change it over manually.

  12. Guy Swinnerton 28th July 2012 at 5:58 pm

    I am sure that clients want to continue the IFA they have forged a relationship with. The fact that the IFA belonged to a badly run network should not hinder the adviser client relationship. The administrators should be made to act in the interest of the client. As soon as the adviser has been vetted and re-registered letters of authority do the job anyway!

    It will be interesting to see who the supporting firms are!? Put the client first and treat them fairly!

  13. Actually Anon 5.58, the administrators should be acting in the interest of the creditors of the firm that has gone into administration. This means using any assets of the firms (trail commission etc) to meet the companies liabilities. I am no expert in companies going into liquidation, but I suspect that customers are probably quite a long way down the pecking order. I also suspect that most of the business was written under terms of business that provided no obligation on honnisters part to provide an ongoing service.

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