Trapnell renews criticism of unreasonable licensee conditions

25 January 2013
| By Staff |
image
image
expand image

Synchron director Don Trapnell has sought to renew the debate around licensee agreements that impose unreasonable penalties on planners when they want to leave.

Describing the heavy-handed agreements as "Hotel California clauses", Trapnell likened them to the old Eagles song, saying "licensees are trying to get advisers to sign agreements which impose onerous conditions and financial penalties on exiting advisers and their new licensees in order to make it very difficult for them to leave".

He also claimed that the most heavy-handed culprits were institutional licensees.

"They seem to forget that it's a symbiotic relationship," Trapnell said. "They need advisers as much as advisers need them, so it's time they came to the party."

He claimed that some of the conditions institutional licensees were attempting to impose included a requirement for the adviser to review advice given to all clients within three to six months of termination - something which was impossible without physically making contact.

"What happens if the client doesn't want a review, has moved overseas or simply changed address and not told their adviser?" Trapnell asked.

"Many life advisers have in excess of 500 clients. It is physically impossible to review them all within a three- to six-month period."

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 3 days ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 1 day ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

2 weeks 5 days ago