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Want-away advisers slam Tenet exit fee grab

“I think a lot of networks have done that in the post-RDR world, which doesn’t really [match] the FCA’s approach. It’s the only way they can police their massive membership.”

The other adviser who is still a member of TeneConnect said this issue is not unique to Tenet and that it is not the only network which has adopted a ‘tick-box’ approach since RDR.

“All the networks are [doing it] because they are under the kosh from the regulator. The regulator goes in and says ‘you have to make sure all your members do this and this and this, and the networks have to enforce everything that the regulator says they have got to do.

“It’s an easy way for the regulator to regulate by proxy. It’s why so many DA people are saying it’s a lot less burdensome and onerous.”

He added that networks are scrambling to avoid fines similar to that which Sesame received in June 2013, which was larger than the network’s 2012 trading profit.

In January of this year, Tenet chief executive Martin Greenwood told FTAdviser sister title Financial Adviser that member firms which do not follow correct procedures are an “enormous” concern to the network and have incurred “significant costs” to the firm.

Mr Greenwood said Tenet could step up “draconian” measures to avoid advisers being tripped up by a stricter approach to conduct risk, citing in particular poor “quality of file” which means “processes followed cannot be clearly evidenced... and the FCA’s concern over conduct risk cannot be properly addressed”.

Late last year (27 December) Tenet dismissed predictions of the network model’s imminent demise, arguing that those which “invest and commit for the long term” will carry on.