ifa reported in late 2016 that Bridges Financial Services had finalised negotiations to purchase the financial advice business of Queensland-based Heritage Bank.
As at 1 January, only five out of 13 Heritage advisers had moved across to the Bridges licence. One joined Centrepoint Alliance while another was picked up by GPS Wealth. The rest are still considered inactive, the data shows.
IOOF did not immediately respond to ifa’s request for comment.
One former Heritage risk adviser said she decided to rejoin her former employer, GPS Wealth-aligned Stream Financial, after being made redundant following the Bridges takeover.
“My former boss from Stream Financial, who I had kept in contact with, had sent me an email and offered me a position. I was extremely fortunate the way things rolled out,” Janis Glassop told ifa.
“But I know some of the other advisers with Heritage are still looking for positions.”
According to Ms Glassop, around 20 people were laid off in the acquisition, including advisers and administration staff. The transition process, however, was smooth, she said.
“It was difficult for Heritage to make such a huge chunk of people redundant, but I felt that I was extremely well looked after,” Ms Glassop said.
The sale of the business came in an effort to allow Heritage to focus on the growth of their core business. as well as provide customers with a broader range of financial planning options.
The change involves the transfer of Heritage financial planning customers to Bridges, with current advice and investments remaining unchanged, according to a statement.
Sure that may or may not happen depending on the contracts in play. Some legal teams tie the adviser up so much that if he/she accepts one of these clients as a client even if it is at the clients wishes they will take legal action.
It’s a question of case law and intent Michelle
The client has the right to go wherever he wants and if he has had a loyal relationship and wants to keep this then there is nothing stopping them from doing this
The only legal argument would be if there was intent on the advisers part to break the relationship
Effectively there are only one or two contracts in the industry that are wrote with the terms you are suggesting and I would question their validity from a legal standpoint
In case law andcto my knowledge I I don’t think a judge has yet made a ruling opposing the constitutional rights of a client re freedom of choice
Now this would be interesting
I think someone did not fully think this one through
Given the loyal brand presence and customer base heritage has being a regional player in Queensland to make advisers redundant and expect customers not to move is a strange strategy
These same advisers have a lot of loyal customers so when you send them a letter saying their adviser is now transferred expect them to also move
Given a lot of advisers would of had their own personal mobiles on there business cards and now working for other wealth organisations, expect some leakage of the client base