The Saturn Portfolio Group is planning legal action to enforce “contractual property rights” in the wake of its purchase of the troubled van Eyk Advice NZ group late last year.
Craig Stobo, Saturn chair, confirmed the group would pursue at least one of the former van Eyk advisers – understood to be a current Forsyth Barr adviser – through the courts in relation to the December 2014 takeover deal.
“Saturn Portfolio has continued its successful transition of the former van eyk NZ businesses it purchased in December 2014,” Stobo said.
“In the course of that transition it became apparent that the transaction required the clear enforcement of contractual property rights in relation to the ownership of client revenue. We have elected to pursue enforcement.”
He said Saturn had already settled privately with another former van Eyk adviser “to the satisfaction of both parties”.
According to Stobo, the current Saturn case highlighted a widespread industry issue that needed to be addressed.
“As a director of an impartial national AFA business whose revenues are solely those of fee for client services it is my considered view that the industry needs to shed the patched cottage practices born of the last century and move to the professional self regulated business disciplines of the future,” he said. “If we don’t embrace professional standards amongst ourselves voluntarily we don’t deserve a sustainable reputation from clients for excellence and we deserve regulation imposed from on high.”
Saturn inherited about nine advisers following its purchase of the troubled van Eyk Advice NZ group flagged last October with one immediately decamping to Forsyth Barr.
According to the Saturn website, only four ex-van Eyk (formerly Perpetual) advisers remain with the independent financial planning firm.
Wrangles over adviser exits are not uncommon in the industry with a high-profile case involving the AMP-owned Spicers and Forsyth Barr making headlines last year.
In a mixed result, the former Spicers adviser now with the Napier office of Forsyth Barr, Les Cunningham, agreed to comply with limited restraint orders but the court overturned AMP’s ‘perpetual no soliciting clause’.
Justice J Dobson ruled in the High Court at Napier that: “I consider that Spicers’ attempt to enforce broadly prohibitions in perpetuity is likely to make it more difficult for it to obtain relief to recast the restraint within what are now claimed to be reasonable bounds. The Court should not be seen to be condoning any practice of contracting parties stipulating for draconian restraints on the basis that the court will come to their rescue on a fallback position to modify the contract after the event.”