Advisers have rallied around a retired adviser who is battling with his former and now defunct network over a complaint brought relating to advice given 25 years ago.
FT Adviser has been reporting the story of John Nightingale, who is being hounded to pay £155,000 to his former network Tenet.
On top of this he must also pay legal costs after the adviser’s application to strike out former network Tenet’s long stop claim was unsuccessful in court.
This is after an ex-client had his claim upheld for advice that took place 27 years ago – a claim brought about through a claims management company against advice to transfer into a S32 pension to preserve his GMP element.
This had protected the client through subsequent market turmoil. But unknown to him at the time, the CMC took the case to Tenet in 2022 and originally the network dismissed the claim.
you’re on the hook until you die
The CMC pursued it to Fos, which found against Tenet. After this, Tenet paid the client £155,000 redress, and then, after it fell into administration, Tenet started chasing the IFA to recoup the money.
As reported last year, the administrators of Tenet Group are Ed Boyle, Howard Smith and Rob Spence of Interpath.
On top of this, Nightingale must also pay legal costs after the adviser’s application to strike out former network Tenet’s long stop claim was unsuccessful in court.
FT Adviser readers gathered in the comment section to show support to the adviser.
One reader called the situation ‘complete madness’ while another said: “What an absolute shambles – what other industry treats their professionals like this?
“It’s no wonder we can’t encourage younger people to join this industry, you’re on the hook until you die.”
What have advisers been saying about Tenet Group?© FT Adviser
Another reader said the selling point of joining a network was always the protection they offered but said this case questioned that.
They said: “Another IFA recently highlighted the risks of being pursued by the networks insurer.
“Here we see there’s no reason for a firm to be in a network because that’s where the real risk lies. Directly authorised and in control of any complaints, PI and liabilities is the only route.”
‘What a waste’
The situation has also made a recently qualified adviser question whether this is a profession they should join.
They stated: “I’m newly qualified with a network one of the big four, FCA approved AR and I spent my day applying for jobs.
“I’d be a brilliant adviser, with contacts galore, trusted adviser status, a pipeline and tons of tech skills but it’s not worth the risk imho [in my honest opinion].
“All the networks / industry should be pushing back on this decision. What a waste of the last year of my life.”
Nightingale has attempted to hit back at Tenet paying out on what he says is a complaint which should be time barred.
He applied to strike out former network Tenet’s long stop claim.
The adviser argued an agreement he signed with the network when he joined did not mention the Limitation Act would not apply, especially not for 25-year-old advice.
But last week (September 2), the judge decided this Act did not apply here and so dismissed the application in favour of Tenet.
Nightingale must now add £13,000 of Tenet’s legal fees on top of the £155,000 bill looming over his head.
He told FT Adviser he may have to sell his home to pay it, unless he can continue to pay his lawyers to take the fight to court against Tenet’s request for redress.
One FT Adviser slammed Tenet for this situation, saying: “Happy to take fees from an adviser and then throw him under the bus when a case gets retro treatment, following what probably wasn’t even a complaint but a slippery ambulance chaser.”
Another said they had left Tenet, saying: “I think the PI insurance I was paying them, which was in excess of £25,000 per annum, was not worth a carrot.
“I am directly authorised now, and should I retire and sell my business or shut it down, I wont have to rely on them to fight any claims, as they don’t seem to have a clue.”
The complaint had been brought by a client after an ambulance chaser suggested that if he had ever had pension transfer advice, he could make a claim.
Back in 1997, he was advised to transfer into a S32 pension to preserve his GMP element.
Adviser battling Tenet launches crowdfunder for legal fee help
The claimant decided to convert this into an annuity in 2008, when rates were around 8 per cent.
However, the client had done this subsequent annuity purchase on his own initiative, and his unadvised purchase resulted in a pension of around 5 per cent level basis.
It is understood the client had not thought about bringing a complaint but after hearing from the CMC, he told his old adviser he thought “he’d give it a go”, and the CMC took the claim to Tenet.
The adviser has since launched a crowdfunding campaign to help him fight his battle and pay the costs.
amy.austin@ft.com