Dirty trick number 1: Cut off the planner from all access to centralised computer files. The planner now can't access client details. The new planner the licensee is putting forward to carry out my client's role after he leaves has that access. He is now contacting clients to discuss their situation. Without access to the computer files, my client is neutralised as a competitor.
Dirty trick number 2: Delay, delay, delay. Everything that has to be done to give effect to a smooth departure and possible handover of clients is now taking forever. "We're very busy at the moment on a lot of fronts but we'll get that document to you as soon as we can," says the licensee. On and on and on it goes, while in the meantime the new planner is still communicating with the clients who can't understand why my client is so unhelpful.
Dirty trick number 3: The confidentiality agreement. The authorised representative's agreement contains a confidentiality clause preventing the representative from using confidential information for their own benefit. That confidential information includes client details. So even if my client can remember some of those details without access to the computer files, he can't use them to set up his new operation. He will have to go to every client to get them to authorise his use of their information. And there's the rub - how can he access the clients if he's not supposed to be using their information for his own purposes.
Dirty trick number 4: Privacy issues. The licensee will claim they can't provide clients' files or information because of privacy issues. The privacy commissioner has issued guidance on how the privacy principles operate in this circumstance. The commissioner helpfully suggests the planner and/or the licensee write to all affected clients, telling them about their changing business circumstances. In the letter, the client would be asked who they want their records to stay with. There is also the suggestion at least two contact attempts be made. In some circumstances it may be necessary to place a public notice in the local press to advise the community about the planner's changing circumstances.
The licensee will use the guideline to their advantage in several ways. Firstly is the delay in sending their letter to the client or providing necessary information for the planner to send his letter. The second is in respect of the default provision. No reply from a client will mean their records will remain with the licensee.
Dirty trick number 5: The transfer agreement. Many licensees include in their authorised representative's agreement a requirement that the new licensee sign an agreement with the old licensee, effectively taking responsibility for the client. More great opportunities to white ant the planner's intentions. Again there is delay: "We've asked our solicitors to prepare the transfer agreement but you know how slow solicitors are. Still, we should have it in a week or two."
Then there are the terms of that agreement. If they are in the least bit onerous to the new licensee they may refuse to sign them. The planner is then caught between the old licensee demanding the agreement be signed, as they are permitted to do under the contract, and the new licensee saying they won't sign because the agreement is onerous to them. The result is at best lengthy delay and at worse the complete frustration of the transfer.
Dirty trick number 6: The audit. When a licensee hears a planner is intending to leave, they love to schedule an audit. Indeed, they can easily argue it is important to know the planner is not leaving because they want to avoid a liability they've created. And, of course, if the audit takes long enough and is detailed enough there might be issues that can justify action of some kind by the licensee against the planner. At the very least it will divert the concentration of the planner long enough to allow their replacement to get under their guard in respect of the clients.
Dirty trick number 7: The outstanding commission. There are a number of arguments a licensee can use to avoid paying outstanding commission. After the audit there may be payments the licensee feels should be repaid. Then there are costs not previously levied. And let's face it; no planner would feel they can take on a licensee in a court case. So often the licensee's strategy is just to refuse to pay for any spurious reason and invite the planner to do something about it, like court action.
So what is the solution to this litany of dirty tricks? There is no single answer. Being aware of the possibilities is the first step. It is also obviously important to make sure the authorised representative's agreement covers these issues. But above that it may also be worthwhile to try to choose a licensee with an ethical culture that would not use these tricks to undermine the planner wanting to leave the network.
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