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
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
