Almost a third of ex-Honister advisers have left industry

The Financial Services Authority has approved 606 applications for “approved persons” status from ex-Honister advisers, is currently considering 13 and seven advisers have withdrawn their applications, leaving 274 of the 900 advisers unaccounted for, FTAdviser can reveal.

Honister Capital went into administration in July 2012 leaving 900 appointed representatives awaiting re-authorisation after the firm went into administration.

The regulator suggested that it would seem that those 274 advisers have not come back into the industry, if they cannot be accounted for.

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A spokesperson for the FSA said: “Even if the 200-odd advisers came back into the industry to do a different job they would still need a CF30, so they haven’t come back into the industry by getting a CF30 or a SIF.”

It has been widely documented that Honister failed because it could not obtain professional insurance cover. A network who did not want to be named told FTAdviser that networks “may not want those liabilities that some ex-Honister advisers may come with”.

In fact Openwork confirmed to FTAdviser that, in the main, it refused one application for every two accepted although it did not elaborate on the reasons for this.

The FSA has confirmed that out of the 606 “approved persons” applications it has issued, 416 ex-Honister advisers applied for controlled function 30 and 190 of them applied for a significant influence function.

Of those applications that are currently in progress, 10 have applied for CF30 and three have applied for SIFs. Of those applications that were withdrawn, four of these had applied for the CF30 function and three of them had applied for SIFs, the regulator confirmed.

FTAdviser also found that networks have taken on a maximum of 597 ex-Honister advisers, with Tenet leading the way.

Tenet has taken on 180 former Honister advisers, Sesame has taken on 124 advisers, Openwork has 60, True Potential has 48 ex-Honister advisers, Intrinsic accounts for 40, SimplyBiz also has 40 advisers, Sense has 26 advisers, Paradigm took on 21 advisers, Positive Solutions has taken on “less than 20”, Financial Ltd accounts for 15-20 advisers, In Partnership has also taken “under 20” and Lighthouse has taken on three.

Philip Martin, proposition and marketing director at Openwork, said: “While we have now taken on 60 former Honister advisers - largely through our IFA proposition 2plan wealth management - we have rejected an additional 30.”