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."
AUTHOR
Staff Writer
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