CommissionSep 22 2016

Adviser and firm in court battle over commission clawback

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Adviser and firm in court battle over commission clawback

A financial adviser and his former company are embroiled in a legal dispute as the latter tries to clawback £3,000 of commission.

Greg Savva and Inspire IFA have made claims against each other in papers filed with Northampton County Court.

Mr Savva, a former professional footballer who played for Greek club Olympiacos FC and at international level for Cyprus, left Leicestershire-based Inspire IFA in February 2014.

Inspire IFA, which was part of the Sesame network at the time Mr Savva worked there, said complaints had been made by two clients and these were upheld by Sesame.

The company claims it is owed commission under a clause of the contract that Mr Savva signed as part of his engagement.

But Mr Savva has disputed this and made a counterclaim, asking to be paid £6,000.

In its claim Inspire IFA says the contract Mr Savva signed “expressly provided” that in the event of a client complaint against Mr Savva being upheld, then he would be liable to repay the company an amount equal to any commission paid to him in respect of those clients.

In March 2015 the company was told by Sesame that complaints had been made by two clients in respect of Scottish Life policies and later that year it was also informed of a third upheld complaint.

As a result of these three complaints Inspire IFA has had to pay out more than £10,000 of which it is owed £3,045.42 under the contract, the company claims.

The contract, seen by FTAdviser, states Mr Savva was engaged as a self-employed IFA on a commission-only basis.

In his court filings Mr Savva said he did not consider the contract to be compliant with the “ethics, spirit and guidance” offered by the Retail Distribution Review, which came into force on 1 January 2013.

He claimed he had not been informed a claim had been made and had not been given an opportunity to respond.

He added: “I have been a financial adviser since 1986 and to my knowledge I have never had a complaint, let alone a complaint upheld.”

Mr Savva disputes the date on which the contract was signed, and said he felt pressured to sign it.

Inspire IFA has denied Mr Savva’s allegations.

In its provisional reply and defence to counterclaim, it says Mr Savva’s filings do not disclose a valid legal basis for a defence.

It added Mr Savva’s counterclaim does not identify “with sufficient particularity” the basis for which he claims the amount of money he seeks and that he has failed to disclose reasonable grounds for his counterclaim.

Inspire IFA stated it is therefore unable to respond to Mr Savva’s filings in their current form and they ought to be struck out.

A spokesman for Sesame Bankhall Group said: “This matter relates to a contractual dispute between two parties which we are not involved in or part of, and it would therefore not be appropriate for us to comment.”