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FSCS hit by over 300 Honister complaints
by Jun Merrett on Feb 04, 2013 at 12:31
The Financial Services Compensation Scheme (FSCS) is dealing with over 300 complaints against advisers who were in collapsed IFA group Honister Capital.
Honister administrators Grant Thornton has also rubber stamped the sale of ex-Honister advisers’ trail commission to corporate advice firm MacRobins.
In a note seen by New Model Adviser® Grant Thornton said that since it had been appointed administrator last year it had received 112 complaints against Honister advisers, which were not covered by professional indemnity (PI) insurers and so were being dealt with by the FSCS.
It said prior to Honister’s collapse it had 192 outstanding complaints. It said the PI insurer was disputing whether it would cover these claims and so they too were being dealt with by the FSCS.
This resulted in outcry from advisers who claimed they, and not the networks to which they belonged, owned the trail.
In the note published today Grant Thornton said it now had definitive legal advice that the commission was the group’s asset and not the individual adviser's, and so has released the commission, which had previously been held on trust awaiting legal advice, to MacRobins.
Grant Thornton had offered advisers in the Honister networks, Sage Financial, Burns Anderson, and Honister Partners, the chance to bulk novate a percentage of trail commission.
The percentage advisers had to give away varied depending on which network they belonged to. Burns Anderson advisers were the worst hit, having to sacrifice 50% of recurring annual commission.
Grant Thornton said 216 of the group’s advisers, or 36%, had taken up the offer.
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