Towry chief executive Andrew Fisher says it will be “impossible” to develop industrywide standard protocol on restrictive covenants.
In February, Tisa said it would try to form an industry consensus on how restrictive covenants should apply in financial services, after Towry sued Raymond James and seven former Edward Jones advisers for £6m in damages over alleged client solicitation. In February, the High Court dismissed all claims brought by Towry.
Speaking at the Tax Incentivised Savings Association client retention seminar in London last week, Fisher said: “Achieving protocol would be impossible because of the different types of firms in the market and the different needs of their clients.
“There is a big difference between the protocol of a large financial planning firm and a two-man band, with one adviser leaving.”
But Tisa Distribution Advisory Council chair David Hazelton said it is important to reach an industrywide agreement. He said: “There has to be some kind of consensus in the industry on restrictive covenants. We are looking to get feedback from the industry on what it wants to do in an effort to reduce any legal action being taken. The difficulty is trying to please everybody’s interests.”
Consilium Financial Planning managing director Kevin Morgan says: “I do not think restrictive covenants should be in place at all because you are restricting advisers’ ability to do their job.”