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Openwork denies unfair treatment over client opt-outs

Openwork has defended itself against claims that its practices in relation to client transfers after advisers leave the network are unfair to customers and designed to dissuade firms from resigning from the network.

According to one adviser who left the network in 2011, during his one-month notice period Openwork contacted his clients to inform them they would automatically be transferred to another adviser within the network. Clients were offered seven days to opt-out of the transfer.

The adviser, who asked not to be named, criticised the handling of the process, saying that it was not in the interests of clients, many of whom did decide to opt out and continue to be serviced by him. He claims that he was told he should not contact clients during the notice period.

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He said: “I think the Openwork stance is: Loyalty goes to the stayers; leavers be damned.”

Philip Martin, marketing and proposition director for Openwork, said that the right to transfer clients to another Openwork adviser firm is clearly stated in both the adviser contract and the client point of sale contract.

He added that it is a consequence of the network taking “responsibility for the advice given by our advisers and the servicing of clients”.

According to the Openwork franchise contract, which FTAdviser has seen, all mortgage-related client files and all information received from a client is considered “confidential information”. Both are relinquished to the network upon the adviser’s departure.

The contract contains a clause that states leaving advisers must not “compete, or prepare to compete” with Openwork during the one-month notice period. A related non-solicitation clause prevents the adviser from approaching existing clients for a further 12 months.

The adviser claimed the letter from from the network was the first his clients had heard of his intention to leave and that many did not associate with the Openwork brand.

He said that many of them had been with the adviser since before he joined Openwork and were therefore concerned that their data was controlled by the network, not to mention the loss of a longstanding trust-based relationship.

People notified in this way included the adviser himself and his wife, who were technically their own clients. Also included was the recent widow of a longstanding client, whom the adviser was helping with sensitive financial processes.

The adviser added that most of his ‘important’ clients opted out and remained with him.

Philip Martin, marketing and proposition director for Openwork, said: “We do not believe that clients can be ‘owned’ by an adviser or by any organisation.

“This process is open and transparent and clients have the option of moving to an adviser outside the network if they choose to exercise it.”

“As a business 67.5% owned by its advisers we believe it is important that we retain value in the network for the benefit of our stakeholders and are able, at all times, to provide clients with a consistent and compliant service.