From Adviser Guide: Picking a network part 2
Q: Who will own my clients?
The variety of answers that FTAdviser received to this question highlights the need for an adviser to raise this subject.
Most networks will contractually commit to the ownership of the clients remaining with the adviser and this is a particularly important aspect to question, according to Tenet.
There has often been some suspicion regarding this point, because of the regulatory responsibility of the network for the advice which an adviser gives.
Keith Richards, group distribution and development director of Tenet, said while nationals typically own the client on a contractual basis, networks will generally pass ownership of the client to the adviser firm.
Again, Mr Richards said ownership of clients is not something to be taken for granted, so check as part of the due diligence process.
Nick Kelly, managing director of Sesame Bankhall Group, said there is sometimes a misconception about client ownership, but the fact is, in a network, you own your clients.
He said the only reason that a network would need to contact your clients is for compliance reasons.
Mr Kelly said this was simply because the network has a regulatory and moral responsibility to stand behind the advice that is given by member firms, and therefore may need to contact clients regarding the advice that has been given if the need arises.
However according to Philip Martin, proposition and marketing director of Openwork, different networks will have different approaches so you will need to ask about client ownership as part of the beauty parade.