A former adviser has lost their case challenging Tenet’s long stop claim meaning they will need to pay almost £13,000 in legal fees – on top of a looming £155,000 bill for compensation.
The adviser, who wishes to remain anonymous, was unsuccessful in a hearing held at Leeds Combined Court earlier this week (September 2).
This hearing involved the adviser’s application to strike out former network Tenet’s long stop claim as it is seeking to reclaim compensation from the adviser against a complaint brought 20 years after the advice was given.
The adviser’s argument falls under the long stop provision of the Limitation Act 1980, which says a contract cannot be enforced beyond 15 years.
FT Adviser has argued in favour of a hard stop for advice for many years.
The adviser signed an agreement back in 1995 when he became a member of the network, which did say the agreement would not expire upon leaving or dissolution.
However, the adviser has argued the contract did not point out the Limitation Act would not apply here.
But the judge decided this Act did not apply here and so dismissed the application in favour of Tenet.
The adviser says Tenet was awarded their legal costs of £12,900 which the adviser now has to pay.
Battle against compensation
This could have a knock-on effect on his ongoing battle against Tenet over client compensation, as the network looks to recoup the funds for a claim paid out in 2022.
The adviser was an appointed representative of the M&E Network between 1995 and 2010, which later became known as Tenet.
The advice in question was given in 1997 in relation to a pension transfer into an annuity product.
It is understood that, given the average GAD rates at the time, would have provided the client with an approximately 8 per cent return each year, even through the Credit Crisis and subsequent market turmoil.
In 2022 the client brought a complaint about the transfer advice to Tenet after a claims management company got in touch, suggesting that anyone with historic pension transfers could be eligible to claim.
Tenet tells adviser to pay £155k for advice given more than 20 years ago
In May 2022, Tenet gave its decision and did not uphold the complaint, citing that it could not find evidence to support the allegations made against the adviser.
But the CMC then lodged a complaint with Fos against Tenet, stating the advice provided by the network was not in the client’s best interests and caused a financial loss.
In December 2022, the Ombudsman upheld the complaint, stating Tenet had not acted fairly.
Tenet paid out the £155,000 redress but is now looking to recoup this from the adviser, who has since retired.
The adviser has argued this should not be happening as it is outside the time limit to bring a complaint.
Generally, the ombudsman would not investigate a complaint if it is more than six years since the event, and the person complaining took more than three years to complain from the point they knew (or reasonably should have known) there was a problem.
But there can be exceptions to this for longer-term products, such as pensions.
Network collapse
Back in June 2024, Tenet Group and three of its subsidiary companies called in the administrators and shut down some parts of the business.
This came almost a year after the network shut down and ARs were moved to Openwork as part of a deal.
TenetConnect ARs were given the choice of retaining their independent status through Openwork’s IFA business 2plan Wealth Management or becoming part of the restricted Openwork proposition.
Meanwhile LSL Property Services, owner of the Primis mortgage network, bought TenetLime, the mortgage and protection advisory network with 133 appointed representatives.
Tenet then later sold its national IFA practice Tenet & You to private-equity backed My Pension Expert.
Tenet declined to comment.
amy.austin@ft.com