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Tenet vows to pursue rule-breaking advisers over Keydata costs

by Jun Merrett on Jan 18, 2013 at 11:38

Tenet vows to pursue rule-breaking advisers over Keydata costs

Network Tenet has said it will recover Keydata compensation costs from the advisers who sold it, claiming they were not authorised to do so.

The Financial Services Compensation Scheme (FSCS) is pursuing Tenet over the costs of compensating Keydata investors. Tenet executive chairman Martin Greenwood said it would recoup the costs of any FSCS bill from offending members.

'Keydata was never authorised but advisers managed to side step [and invest]. We will pursue the advisers responsible and recover losses. Any side-stepping is a serious breach of procedures which is something we cannot ignore,’ he told the Tenet’s annual conference this morning.

Greenwood said the group’s stance over Keydata differed to that over Arch Cru, as it had allowed members to invest in one of the Cru funds and so would shoulder the cost of claims.

He revealed Tenet had also taken on 160 advisers over 2012. Greenwood added that the group had emerged with a clean bill of health as the Financial Services Authority examined relationships between providers and distributors.

'We are delighted that the FSA, except for one minor comment was entirely satisfied and no further action [is needed],' he said.

Greenwood said Tenet was working on developing a restricted offering but would not force its members down a particular route.

15 comments so far. Why not have your say?

Tomis

Jan 18, 2013 at 12:01

Good, should keep my costs down then?

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What a load of tosh

Jan 18, 2013 at 12:13

How exactly could an adivser 'sidestep'. Indicates to me that Tenet's systems are insufficient to identify risk.

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JonnieB666

Jan 18, 2013 at 12:13

Oh wait a minute. Without defending any of those advisers who actually recommended the investments, Tenet must have known about the investments as part of their compliance checking and also if Tenet was receiving the initial and ongoing commission payments. I am no expert on tenet so accept they might not have been aware of the latter if they were simply a support firm but if they are claiming the plans were not authorised, this suggests to me they are more of a Network which has greater control over what advisers do and in such cases is it not the norm that all income goes to the Network who take their cut before passing on the balance to the adviser firm?

I would ask for Tenet to provide full details of precisley what Tenet approved and did not approve and for them to provide evidence that this was all made crystal clear to the adviser firms. Surely not approving by ommission does not mean it is disallowed. Did they actueally review the Key Data plans and state they should not be used?

I have never advised on any of these structured products as I do not believe they are suitable for the general public (simply my opinion) and have never been a member of Tenet or any other network for that matter so I have no axe to grind here but this just seems to be another example of why complete trust in Networks is questionable at best IMHO.

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Southern boy

Jan 18, 2013 at 13:01

Sidestepped, they didn't notice the commission coming in, or being paid out.

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David Cathcart

Jan 18, 2013 at 13:15

Same old story, the networks run for hills when anything goes astray, leaving advisers firms to fend for themselves. When will advisers wake up to the fact that advisers firms are viewd as collaerial damage by the networks when self preservation is at stake.

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richard john brydon

Jan 18, 2013 at 13:57

So an advisor recommends a product from a business that's authorised and regulated by the FSA, is passed as an investment fit for purpose by compliance at Tenet and now they all assert that the advice was negligent. I don't understand the logic of it all. Does anyone?

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Julian Stevens

Jan 18, 2013 at 14:26

Tenet's statement the member firms who sold KeyData products were not authorised to do so is not quite true. For a short while, certain KeyData structured products were on the Tenet approved panel.

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Simon Mansell

Jan 18, 2013 at 20:43

Well "never say never" Mr Greenwood.

Here is the M&E (Tenet ) approval for Keydata 31/10/03: The Keydata Extra Income Plan 7 is approved for members of the M&E Network. You should ensure that you provide clients with the FSA factsheet on high income products entitled "Make sure you understand the risks".

Funny that?

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Simon Mansell

Jan 18, 2013 at 20:44

Networks are bad for your financial health!

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Simon Mansell

Jan 18, 2013 at 21:06

@richard john brydon Jan 18, 2013 at 13:57

The logic of it all is that Networks are commercial propositions and their primary role is to look after Networks, not members! Remember the silence of Networks over Grandfathering and the benefits they gained from 100% trail fees liberated from unqualified advisers! AIFA was the mute mouth of the Networks! Remember also the right of subrogation in the members PI, allowing redress to be sought against the member by the PI insurer following claim payment.. No one will ever fight quite as hard for you as you will do. Don't ever put a Network between you and a complaint because the Network will settle through commercial and regulatory expediency.

Networks are bad for your health!

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JM Keynes

Jan 19, 2013 at 10:32

@ Simon Mansell

Spot on there, Simon The networks are all cynical and will pursue you to your last penny.

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GNewman

Jan 21, 2013 at 09:33

Don't assume all Networks are the same! I was compliance director for The Whitechurch Network, yes we permitted some Keydata investments - and stand by members, I've not doubt the current members affected will testify to that fact - it will mean their businesses won't close - something directly authorised advisers that recommended Keydata products may not be able to avoid. Furthermore, if Keydata set up agencies direct with Tenet members, then Tenet, no matter what their systems and controls, would be unaware of business being done. This is not uncommon, but more common with mortgage providers, not until there is a problem does a Network become aware of the fact that business was being done. Simon, I think you'll find Extra Income 7 was not one of the affected products, it appears from what Tenet are saying, is that it was unapproved Keydata products that were recommended by members and have since gone pop.

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Evan Owen

Jan 21, 2013 at 10:32

Go on Simon tell the people why Tenet can't do what they claim.

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Simon Mansell

Jan 22, 2013 at 17:04

@GNewman Jan 21, 2013 at 09:33

I believe my response concerned the words allegedly used by Mr Greenwood:

'Keydata was never authorised".

Thus the true statement may well be Keydata was authorised but they later changed their minds!

Evan I will let you explain the points your make.

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Evan Owen

Jan 22, 2013 at 17:58

New solicitors representing FSCS as of today, odd.

Anyway, anybody being chased by Tenet should form a class action for a counterclaim.

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