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MacRobins warns of “legal and practical” barriers to Honister bulk transfers

MacRobins has warned product providers against allowing the bulk transfer of ex-Honister Capital advisers’ agencies due to “legal and practical reasons”.

Earlier this month, Honister administrator Grant Thornton sold the firm’s recurring and pipeline commissions to corporate IFA MacRobins. Advisers are being forced to pay up to 50 per cent of their recurring annual commissions to novate clients to another firm.

Last month, Standard Life and Aviva confirmed they will facilitate bulk transfers while Skandia announced this month that it will also conduct the transfers. This would allow advisers to avoid paying MacRobins to novate their clients.

In a statement issued this week, MacRobins says some product providers have issued termination notices in order to transfer sub-agencies to reauthorised advisers.

It says: “We and the administrators are in correspondence with those product providers concerning their termination as, in addition to legal matters, there are practical considerations as to why this may not be possible.”

MacRobins claims Honister did not always link sub-agencies to individual advisers and many advisers shared sub-agencies. It says without access to Honister’s back-office systems, any provider doing a bulk transfer of a sub-agency may inadvertently transfer clients that were never linked to the AR named on the account . MacRobins claims this would lead to data protection issues.

MacRobins also warns that bulk transfers may see some creditors’ financial positions advanced over others.

It says: “If certain product providers allow the transfer of sub-agencies, they will be advancing the financial position of some creditors over and above others. Key creditors are likely to be clients, the FSCS, other product providers and other financial advisers.”

MacRobins says in light of this, providers should rescind any termination notices that have been issued, reinstate commissions and support MacRobin’s transfer of agencies to appointed representatives.

But Standard Life and Skandia say they will continue to bulk transfer advisers’ agencies despite the warnings from Grant Thornton and MacRobins, while Aviva says it is considering its position.

John White Associates IFA and former Sage AR James Espin says: “Grant Thornton and MacRobins seems confident of their legal position on this issue, as do the providers. This looks likely to end up in court.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. what is going on here 16th August 2012 at 9:37 am

    What is going on here ?

    MacRobins own website confirms that they have 5 financial advisers supported by 4 admin team members. This firm have just bought the servicing rights of one of the largest national networks in the UK. This means that 9 people apart from having to continue to service their existing clients are going to take on the servicing of over 900 ex Honister advisers clients – I don`t think so. If I were cynical,I would suspect all we have here is a clever commission collection / reconcilation function. No doubt we will next hear that they have retained part of the Honister commission team. TCF – oh dear, oh dear !

  2. @anon

    MacRobins have form. Phoenix IPN was set up to leech the renewals of Interlink Premier Network members when IPN went under in 2004. The administrator was Grant Thornton. Subsequent deals were Network Data, MBSL, Mortgage Next, Solent etc…

  3. Both Grant Thornton and Macrobins have already stated they kept on part of the Honister commissions team when this all happened on 3rd July……….

  4. Definition Parasite – ‘An organism that grows, feeds, and is sheltered on or in a different organism while contributing nothing to the survival of its host

    Simon, if you are right and there are these previous connections between Grant Thornton and MacRobins / Phoenix then we all really do need to know, genuinely, the tendering process, if any that took place took place.

    The creditors are owed that !

    The MD of MacRobins on their website quotes part of his background as from acquisitions for a large accountancy practice – how cosy potentially is all of this.

    I reiterate my previous point, 9 individuals taking on the servicing of 900 ex advisers clients and I now learn that the same 9 individuals are possibly servicing the clients of a number of other defunct national network firms on top of that !

    This is not about TCF and servicing client’s needs. Duty of care to clients cannot be on the agenda as logistically it would be impossible in this instance.

    This is a numbers game and a good one at that – purely and simply building up commission mass.

    It would appear what we have here is simply a slick commission collection / reconciliation
    function.

    Just thought of an interesting scenario -perhaps all the ex Honister advisers suggest one ex client each contact their ‘ new adviser ‘ each week for a month or so for a chat .

    Perhaps then the Regulator would take notice when the obvious results ensue.

    Let us not forget, for one reason or another a large number of clients and their needs are not being looked after here and that simply is not good enough.

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