The court case, which took place this week, centred around ‘disturbance allowances payments’. These payments were made to IFAs when they joined the firm to compensate them for the upheavel of changing their business models when they joined the firm.
The court battle focused on whether Bluefin’s £243,052 ‘disturbance allowance’ to Ashley and Helen Armstrong was repayable when they left the national IFA and focused on the terms and conditions under which the payments were made.
The Armstrongs joined Bluefin, then called Thinc, in April 2008 as self-employed advisers based in Belfast, but had their contracts terminated in September 2009. Thinc was bought by Axa in 2006 and rebranded as Bluefin in January 2009.
Thinc lost the original case in October as the High Court Judge said in the ruling that “minimum performance requirements” were not mentioned in the contracts.
The Judge said that the Armstrongs were repeatedly assured in terms by Nicholas Boyle, at the time Thinc’s commercial director with particular responsibility for recruitment, and Julie Martin, then director of area recruitment and development manager in Northern Ireland, that the only condition was that they should stay with Thinc for three years.
They were also said to have been assured that there was “no formal minimum performance requirement, but that there was a proposal to bring in a minimum performance requirement”, with the figure currently under discussion of £50,000. However, this was not a contractual requirement and would include repeat income from business already written as well as new business.
In the conclusion, the High Court Judge said: “There was evidence, and it stood to reason, that the Armstrongs relied on the ‘no other conditions’ assurance when they applied to join up and signed up with Thinc.
“It is true that there could still be a question as to what the assurance amounted to – for instance could it be interpreted as permitting reclaim of the payment upon termination by Thinc without cause? However, it would be ridiculous to suppose that that is how they viewed the assurance, and it was plain from Mrs Armstrong’s evidence that they did not.”
The case is one of many that Bluefin has brought against ex-advisers to claim back the allowances.
In October 2010, FTAdviser reported that an ex-Bluefin adviser was being sued by the national IFA firm for nearly £30,000. In June 2011, Bluefin also began proceedings against two more ex-advisers, claiming it was owed £264,000 in disturbance allowances.