Money Marketing Reports Robert Campbell's Remarks on Restrictive Covenants

Robert Campbell's remarks at the Tax Incentivised Savings Association client retention seminar are quoted in two separate stories in Money Marketing on June 7. The first focuses on the trend among financial firms to favor imposing non-dealing clauses rather than non-solicitation clauses on advisers because, in the case of the former, it is easier to prove an adviser's breach of contract. Evidence of a breach of a non-solicitation clause, on the other hand, is hard to find.

"The attraction of a non-dealing clause is that it is a more specific agreement and it is clearer to the court that everybody understands what the agreement is and it is more difficult for people to say they did not understand it," Campbell said.

The second story considers another theme from the seminar, the need for the firms to build strong relationships with clients, thereby preventing individual advisers from taking clients with them when they leave. If firms suspect their advisers of breaking their restrictive covenants, Campbell suggests they speak to clients first before taking legal action.

"If a firm thinks an adviser has broken their contract, there is nothing to stop them picking up the phone to the client and asking directly whether they have been contacted and persuaded by their adviser to move firms," he said. "In the majority of cases people will give an honest answer."

Read more by following the links to the first or the second Money Market article.