News that DBS's run-off deal excludes members who left the network during its protracted PI negotiations (Money Marketing, December 12, 2002) will not surprise IFAs who have tried to leave the UK's other networks.
Rather than be positive and enhance the benefits that attach to membership, it seems some networks prefer to use scare tactics to discourage dissatisfied members from leaving. The threats employed are probably well known to most readers but the list has expanded and become more widespread in implication.
While freezing pipeline income and retaining client records could be justified as protecting business interests, I would call into question the commonplace delays in giving regulatory references to outgoing members and denying exiting members PI cover after they have left.
If I was an IFA, I would accept that I might have an ongoing liability in respect of the agreed excess (per the membership contract) but I would fight tooth and nail against having any liability forced upon me after exiting from a network. Let's see what the lawyers say.
I wonder whether we are not witnessing the final decline of the network business model?