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Tough line on client poaching

Advisers say broker firm Oval’s out of court settlement following a dispute with two former employees is another sign of the tougher line firms are taking regarding client ownership.

Oval, which is predominantly a general insurance brokerage but also has advisers covering healthcare and wealth management, revealed this week it has secured an out of court settlement in a dispute with two of its former account executives.

It claimed the former employees breached conditions of their contract terms on joining Liverpool brokerage Butterworth Spengler. Money Marketing understands the dispute relates to client ownership issues but Oval says it cannot comment on the details. It is the fourth such dispute involving Oval in the past three years.

Informed Choice chief executive Nick Bamford says it is becoming more prevalent for firms to pursue advisers for taking clients with them when they leave the company.

He says: “IFA practices are valued as a multiple of the revenue stream from client assets. If principals are seeing that ex-financial planners are poaching clients and an agreement is in place to say they cannot do that, they are going to be upset. The way that IFA practices are valued will cause the principals of those businesses to say, we do not like this and we are going to take action.”

RPC partner Jonathan Davies says: “It will depend on the contractual terms as to who the clients belong to. Financial advisers would be well advised to take advice before signing standard form contracts.”

Towry was granted a court injunction in April against Raymond James Investment Services Limited and six former Edward Jones financial advisers who joined RJIS. A court case is being brought against RJIS and the advisers alleging soliciting of customers.


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  1. If an adviser is on linkedin and the FSA register, it’s not always difficult for the client to find them.

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