Trapnell renews criticism of unreasonable licensee conditions
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."
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
