View more on these topics

Judge rejects BB&NFP case against ex-IFAs

Restrictive covenants in Berry Birch & Noble Financial Planning’s contracts with its IFAs have been deemed unenforceable by a High Court judge.

BB&NFP failed in its case against five former advisers who it claimed broke confid-entiality covenants and termination restrictions when they left the network to set up on their own.

BB&NFP brought the application for an injunction requiring the five to stop trading, alleging breaches of covenants in agency agreements and implied duties of good faith and confidentiality.

But Mrs Justice Cox told the Royal Courts of Justice that the claims were unlikely to succeed at trial as the restrictions of the contracts, both in terms of time and geography, were too unrea- sonably wide to be enforceable.

Justice Cox also did not feel that BB&NFP could satisfy the significant financial undertaking required for an injunction to ensure defendants’ loss of earnings would be paid if they won the case.

The network alleged that three of the five IFAs tried to solicit business from its clients by collecting and removing client documents but Justice Cox said there was not a serious case to be tried on this matter.

The five advisers left the network in March and set up their own firm, Exclusive Finance, in the Midlands.

Financial Services Legal LLP associate solicitor James Tait, who defended the five advisers, says: “The moral of this story is, if IFAs sign agency agreements, the networks have to make sure they are not too wide to be enforceable.”

Recommended

Reap the wild wind

How can investors harness the winds that have been blowing savagely across the US markets this year?

Insurers to move to front end fees

Insurers will increasingly move to front end fees on income drawdown products after A-day according to Defaqto. Currently only a quarter of income drawdown plans levy installation fees, but Defaqto expects this number to surge as providers look to cover A-day development costs.

Financial adviser who stole 10m jailed for 12 years

The financial adviser who stole 10m from Halifax over four years to finance his gambling habit has been jailed for 12 years at Swansea crown court. Graham Price left three empty boxes in a safe with a signed IOU saying borrowed 7m from the Halifax. Price held stakes in 11 horses and also used the […]

Investment at what cost?

Disclosure could over time force more fund firms to review their charges

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment