Protection provider PruProtect has pledged to ring-fence commission due for cases submitted by Honister Capital advisers until they are reauthorised with the FSA.
Honsiter Capital, which includes advisory firms Burns Anderson, Sage Financial Services and Honister Partners, entered administration earlier this month after failing to secure professional indemnity insurance. The group’s 900 advisers cannot service clients until they are reauthorised.
Earlier this month, PruProtect and Ageas Protect told Money Marketing they had started contacting clients introduced by Honister advisers directly to continue their applications.
Insurers had frozen commission owed to Honister advisers on the advice of administrator Grant Thornton, although if advisers gain authorisation with another network and the case is rewritten, the commission will be paid to the new firm.
PruProtect has today confirmed it will hold on to commission payments due for Honister pipeline cases until the adviser is reauthorised, even if the client is placed on risk before the reauthorisation process has completed.
PruProtect head of account development Phil Jeynes (pictured) says: “We have shown already our commitment to ensuring their clients are not disadvantaged by stepping in to manage any pipeline cases and now we want to show our dedication to the advisers too.
“Therefore we will be ring fencing any commission due for Honister policies and ensuring it is immediately available to the originating adviser via the network once they are regulated under a new principal. PruProtect does not expect any future issues regarding claims on the commission from the administrator, due to the insolvency provisions in the terms of business in place.”
Ageas Protect says it is still working on a strategy to deal with the commission payments due to advisers who have experienced a delay in the reauthorisation process.
Ageas Protect head of marketing Andy Milburn says: “It is a commercial conversation with the administrators and we have no firm details on this at present.”