Dealer groups fall out over contract
Dealer group Synchron has raised concerns about the provisions of an agreement associated with the transfer of two financial planners from Guardian Financial Planning. This came after Guardian refused to alter a transfer agreement requiring Synchron to review the needs and circumstances of all clients of the transferring advisers within six months.
Synchron took on two Guardian advisers in November 2009 and January 2010, and in both cases Guardian sent a transfer agreement to Synchron which included a clause stating that Synchron must review the needs and circumstances of each client no later than six months after the transfer date to determine the appropriateness of the products or services recommended by Guardian.
When Synchron contacted Guardian seeking to change the clause to ‘offer to review’, Guardian refused, and Synchron subsequently refused to sign the transfer agreement.
Executive manager of Guardian Steve Browning dismissed Synchron’s concerns, saying that all of his company’s contractual obligations and procedures had been fulfilled.
“The transfer protocols are fair and reasonable, and have been over a long period of time,” Browning said.
Both advisers are now authorised by Synchron. At least one of the clients of the first adviser has remained with Guardian, while all the clients of the second adviser are still with Guardian.
Synchron director Don Trapnell said by signing the agreement his company would not be covered by professional indemnity insurance in the event that a client was unhappy with financial advice given to them while with Guardian.
However, Trapnell informed Money Management that both advisers have a small client base, and they have assured Synchron that they are happy to contact each of their clients to sign them over to Synchron.
Trapnell said that in the past Guardian had agreed to change the clause to ‘offer to review’, but has now decided not to alter it.
Trapnell said Synchron would no longer take on advisers from Guardian if the clause remained unchanged.
AUTHOR
Benjamin Levy
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