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Brewin vs Charles Stanley: rival CEOs speak out
by Danielle Levy on Apr 11, 2014 at 10:55
Brewin Dolphin’s decision to sue rival firm Charles Stanley has received qualified backing from wealth management CEOs.
While supporting Brewin’s decision to protect its franchise, the CEOs also question whether airing their dirty laundry in public could prove damaging for the broader industry.
Brewin is suing six former senior employees from the office, known as the ‘Leicester Six’, alleging they breached their contracts and conspired with Charles Stanley to cause losses to their business. Charles Stanley has denied the claims and said it will ‘vigorously resist’ them.
The Charles Stanley defence document, exclusively revealed by Wealth Manager last week, exposed a list of grievances. These typify the tensions that exist in most large wealth management firms as they seek to centralise and become more profitable.
The Leicester Six’s complaints centred on Brewin’s move to a unified rate card, the imposition of an internal suitability review,
the allocation of costs of the FSCS levy and a new strategy to drive profitability.
Richard Whitehead, chief executive of Dart Capital, identifies with Brewin’s decision to protect its business, but questions the fallout for the broader industry.
‘You have to be seen to protect your own interests. The people that have moved wanted to leave which is fine and they should be allowed to do so, but not at the risk of breaking the terms of their past employment. Why they wanted to move has meant they have aired their dirty laundry, which is not healthy for the industry,’ he said.
‘It would have been better if they had kept it out of the public eye. These things are better dealt with behind the scenes. It is a shame the personal aspect has been aired so much by the individuals. It doesn’t show anyone in a good light.’
Ashcourt Rowan chief Jonathan Polin (pictured) said: ‘It is totally understandable that companies have to protect themselves, as we would against any movement of that number of people, but it is unfortunate the way the news has come out. From Brewin Dolphin’s point of view, they want to absolutely let people know that they are not going to take this lying down and will follow through.’
One chief executive from a medium-sized wealth management business, who preferred to remain anonymous, said the dispute typifies Brewin Dolphin’s journey, like others, to become more efficient and profitable.
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