IFAs are calling for a nationwide action or support group to be created which could be used to deal ...
IFAs are calling for a nationwide action or support group to be created which could be used to deal with disputes between networks and advisers.
Plans for a national IFA support body arise from the continuing disagreement between Misys network members and its management, over the increase in fees and commissions paid to the network which were announced at the end of last year.
IFAs from other networks are also encountering similar concerns about the powers held over network members and are now calling for the industry to group together and find a way of handling complaints.
Several network members say they have strong cases against DBS Financial Management - part of the Misys Group - which they intend to take to court, however, advisers need the financial support of a national action group while they are in dispute with networks as their assets and commissions earned are in some cases being withheld.
Misys members from the Network Action Group (NAG) have now stepped up their argument against DBS and a letter has been sent from Fraser Brown solicitors on behalf of NAG to Alan Taylor, DBS managing director, in a bid to render the agency agreement void.
DBS officials say they have received the letter but are not prepared to comment at this stage.
Within the letter sent by Fraser Brown, members say several of the clauses within the agreement are anti-competitive, in contravention of the Competition Act 1998, because they attempt to prevent members from setting up rival networks or moving to other firms as well as hold onto the IFA's commissions for longer than is necessary.
Other claims made in the letter say members had to pay DBS for additional compliance work, such as pension review cases, when there was no case to answer and the work should have been included as part of the agency agreement.
However, each IFA case could cost in the region of £20,000 for pre-trial preparatory work when many advisers have their income stream frozen.
"We have had people approaching us and suggesting we should create a national group for IFAs, not necessarily limited to network members, so we have one voice and have somewhere to turn when there are problems like this," says an insider source.
" There is no alternative at the moment, but networks have huge power over us and the industry when it is the IFA who brings business to the network, not the other way around."
Avoids paperwork with two-step process
Investment process will use machines
Mark Sterling accused of operating a collective investment scheme without authorisation
'Increasing engagement will only favour those prepared to put in the effort'