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.”