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Who owns the client?

Samantha Downes

Samantha Downes

It’s an age-old question and one that has filled many a lawyer’s pockets in the last couple of decades.

Who owns the client? The company or the adviser advising them?

Last week it was revealed that financial advice firm Affinity was taking some of its former advisers to court over a contractual dispute in a case that could involve up to 22 of them and affect many more.

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The case in the High Court relates to a clause on the advisers’ contracts preventing them from soliciting business from the company’s clients.

Under their contract advisers could not, within a year of the agreement being terminated, solicit or canvass the custom of Affinity’s clients or any potential clients.

Affinity is alleging that the advisers broke these restrictions by approaching the company's clients,.

Not surprisingly maybe, the barrister Chris Quinn who is acting for the former Affinity advisers, said there were a further 22 advisers interested in joining the case.

Many years ago Financial Adviser covered the case of a network which was asking advisers to sign away the rights to ‘own’ their clients - by allowing it to contact them separately.

When the story was published it was greeted with adviser outrage. The network swiftly backtracked, claiming the contract had been worded wrongly and that Financial Adviser had been given a ‘draft’ copy only.

Since then (in the mid 90s) increasing regulation and the introduction of new adviser statuses - such as appointed representatives/directly authorised etc, etc has changed the goalposts of client ownership.

It may be another price to pay for better regulation of financial services, but as far as advisers are concerned this one is set to run and run.

Maybe we should be thankful that as long financial advice remains a client-focused industry, ownership of those clients will always be up for debate.