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Administrator Grant Thornton confirmed to FTAdviser that advisers of failed network Honister have had their trail commission frozen.
A spokesperson for the administrator said: “It [trail commission] has been frozen. The administrator has a duty to make sure the commission is only paid when it is due and it will take a little time to find out who earned what.”
John Winful of Winful Associates, an IFA firm that is an appointed representative of Honister, told FTAdviser that the admnistrator had frozen all of its members bank accounts into which trail commission is paid.
Mr Winful said that his income is currently around 80 per cent made up of commission and that he will have to contact his clients to revise agreements to pay the trail into a different account if the accounts are not re-opened.
He expects that “apathy” on the part of some clients in signing new agreements could mean he will lose around 20 per cent of his trail income at “a conservative estimate”.
He said: “I can understand why they might do this with Honister Partners, but I hire nothing from them. I earnt this money and they are holding me to ransom.”
Mr Winful added that he has still received no official communication from either Grant Thornton or Honister themselves to inform him of the firm falling into administration on Tuesday (3 July).
He said that he found out the firm had collapsed when a colleague called him at 7am, following receipt of an email that was sent to some advisers. Mr Winful claimed he has still not received any communication and nor have many other colleagues.
A spokesperson for Grant Thornton confirmed that Honister sent an email out to advisers at 7am on Tuesday.
The spokesperson said the administrator sent out another email at 10.30am, but added that there were some technology issues with this because “everyone was logging on at the same time”.
Back office systems provider Intelliflo has set up a helpline for Honister advisers, after it fielded at least 250 calls from worried IFAs that use their system to manage their client database and email records.
Mr Winful said that he is currently able to access the system, but that he has heard from several others that they have been unable to gain access.
