Two advisers have criticised Tenet for imposing an unexpected £500 charge to leave its TenetConnect adviser network that was not outlined in the contract they signed at the time of joining.
Advisers at two separate firms, both of whom wished to remain unnamed, each have experience of trying to leave TenetConnect.
One firm is an ex-member of Tenet. One of its directors said he was surprised to see the extra ‘resignation fee’ included in a statement from the network, but paid the fee to avoid trouble.
The fee is in addition to any extra PI premiums or regulatory levies which might be demanded by the network and which are imposed in year-long periods.
The second firm discovered the fee in a ‘summary of accounts’ document, seen by FTAdviser, which was sent after it had signalled its intent to resign. It successfully fought against paying the fee, and it was credited back to them in a statement a few weeks later.
The firm had been trying to leave the network and remains critical of aspects of its operation, but a director said it decided in the end not to resign on the basis that it would be too costly and problematic to leave and seek alternative authorisation.
There is no mention of the £500 fee in a copy of the contract between TenetConnect and advisers seen by FTAdviser, and neither adviser could find any supporting paperwork in which the fee is listed.
Mike O’Brien, group brands director said the network would not comment on individual cases. He also told FTAdviser he could not provide a detailed explanation without knowing the names of the individuals involved.
He stated in general terms, however, that there was no standard ‘exit’ charge applied and that any fees levied would be in detailed in the contract or one of the supporting documents setting out additional terms that advisers receive when they become members.
Mr O’Brien added that each contract and set of supporting documents could contain different clauses unique to the firm involved. He asked the advisers to raise the issue with their Tenet account managers.
He said: “Any charges levied when advisers leave are in full accordance with the contractual terms that will have been signed when they became a member.”
The two advisers also criticised Tenet in particular and networks in general for adopting a “box-ticking” approach to policing member firms post-Retail Distribution Review in an effort to limit claims.
The ex-Tenet adviser told FTAdviser: “We aren’t delighted with being network members anymore. We had outgrown it way ahead of the RDR.
“When you find that [for] any guidance coming from the network, we had already done it or felt we could do it better that starts to tell you we don’t have to be a network member.
“They are becoming super paranoid, so they are moving away from principles based regulation to a tick-box [method].