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Network adds trust to contracts

Whitechurch is introducing a declaration of trust to all contracts to protect members against commission losses if the network ever goes bust.

It stresses the clause has been introduced in response to IFA concerns over the networks which went into liquidation last year owing members commission and not because it is any danger of going under itself.

Revised member contracts include a trust arrangement allowing the receiver to deduct funds only as set out in the membership agreement and not allowing pipeline commission, renewals, trails and fund- based commission to be seized as was previously the case.

Whitechurch Network managing director Ian McIver says: “An insolvency practitioner would be stopped from claiming income it is receiving as an asset of the wound-up network. If such a trust arrangement had existed for any networks that have wound up to date, the members’ monies would not have been treated as those of the receiver. It will always be open for the insolvency practitioner to argue that the monies are the assets of the receiver but members will now at least have a defence.”

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