Financial Services Dispute Resolution
Consolidation in the Marketplace
With the advent of RDR, the industry is experiencing a lot of consolidation resulting in a significant amount of advisers moving between regulated firms.
We commonly advise on how to best deal with the departure and acquisition of advisers from other businesses, on a bulk scale or one to one basis for key advisers. This often requires negotiation of the following legal issues:
- Payment and retention of commission and fees owing
- The novation of clients and commission agencies
- The enforcement of restrictive covenants including non-compete, non-solicit and non-deal clauses
- The provision of references to the FSA and new authorised firm
- Compliance with data protection law
- Claims for the tort of inducing breach of contract often made against the new firm
In some cases, we have also seen the police arrest and bail advisers who have been alleged to have taken client data in breach of restrictive covenants and the Data Protection Act 1998.
We represented around 50 firms in responding to the FSA’s consultation paper on the s404 scheme concerning advice given by firms on the Arch cru Funds. This resulted in some significant changes to the scope of the s404 scheme when the policy statement was published. We then went on to act for those firms in seeking advice on a potential judicial review of the s404 scheme.