Adviser Insights
Key contractual considerations for advisers looking to make a move
For many financial advisers, making the decision to move is an exciting career step. But too often, that excitement is followed by a cold shock: discovering restrictions in their contract which they didn’t fully appreciate at the time they signed it. We hear so many accounts from advisers who only discovered restrictions after deciding to move, or even after giving notice. This can create avoidable stress, delays, or even disputes.
This blog outlines the key contractual issues advisers commonly encounter when leaving one firm and setting up independently. It’s not legal advice, but a practical overview to help advisers understand what to look for, how to plan, and how to navigate the transitional period smoothly.
Understand your current contract BEFORE you resign
Before making any move, advisers should locate and read all relevant documents, not just the main contract. Different adviser setups lead to different contractual constraints.
The three most common scenarios and the documents worth reviewing are:
Employed Adviser → Self-Employed
Employment contract
Staff handbook
Bonus/commission schedules
NDAs or confidentiality clauses
Common themes to look out for: notice periods, garden leave, non-solicitation, non-dealing, and ownership of clients.
Leaving a Network as an Appointed Representative (AR)
AR agreement
Network policies & procedures
Fee-split payment schedules
Common themes to look out for: client ownership, agreement to novate, client data, data access timeline, income payment in notice and clawback liability.
Leaving as a Registered Individual (RI)
Self-employed adviser contract
Fee or revenue-sharing agreement
Compliance frameworks
At this stage you don’t require legal interpretation - just awareness of what you have agreed to. Many advisers have discovered substantive clauses which they weren’t aware of years after signing up to them.
Client Ownership: Who “owns” the book?
Most disputes arise from misunderstandings about client ownership. Advisers are often surprised to learn that “their” clients legally belong to the employer/firm/network. Your ability to move clients depends on contract wording, not relationship history. Some agreements specify that clients introduced by the adviser still vest with the firm
Contracts usually fall into one of these patterns:
Employer/Network owns the clients — common in employed or network AR agreements.
Adviser owns clients but grants exclusive rights to the firm for the duration of the agreement.
Shared rights where the adviser own some ring-fenced clients and he firm own the rest.
Practical step: Map your current client relationships and compare them to the contract’s definitions (e.g., “firm-introduced” vs. “self-introduced”).
Look for:
How “Firm Clients” vs “Adviser Clients” are defined
Whether there is a “buy-out” provision
Whether the agreement distinguishes new business from ongoing servicing
Restrictive Covenants: What you can and can’t do after leaving
Restrictions vary widely, but advisers commonly encounter:
• Non-Solicitation Clauses: The most enforceable and one adviser’s often breach, either deliberately or accidentally, these prevent approaching or encouraging clients to move with you for a set period.
• Non-Dealing Clauses: Even if clients approach you, you may be barred from transacting with them. Tip: Check if “initiating contact” vs “responding to contact” is defined.
• Non-Compete Clauses: Less common and harder to enforce, but some agreements restrict but some firms still include geographic or business-type restrictions.
• Non-Poaching Clauses: Apply to staff or advisers inside the business or network.
Practical step: Identify how long restrictions last and whether they apply to all clients/staff or only those you served/ worked with.
Data, Confidentiality and Communications: What you can take with you
With GDPR and FCA requirements, advisers must be extremely careful. Client data normally remains with the firm or network and you will need consent to obtain it. Downloading or exporting data can be prohibited as personal contact details stored on a back-office systems may be considered company property. Again, your contact will be clear on this. Marketing to clients post-exit could breach both contract and data protection rules.
Practical step: Plan how you will communicate your new status without using client data improperly (e.g., public announcement, LinkedIn update, personal website).
Notice Periods and Exit Procedures
Typical considerations:
Length of notice (often 1–6 months) - Longer periods often appear in employed contracts.
Whether you can work your notice or may be placed on garden leave – note if on garden leave the clock will often start ticking from the date this commences, not from the date of the contract end. During this time, however: You are still employed/contracted; You can’t contact clients; You may lose systems access
Who is responsible for ongoing servicing during notice
How pipeline cases and commissions will be treated
Practical step: Build your transition timeline backwards from your ideal start date.
Taking your permissions with you
The regulatory path affects your exit options:
Employed → Self-Employed: Need to secure authorisation (directly or via network/firm). Your former employer may control references or regulatory notifications. This can slow things up if a reference is not returned promptly. On the other hand, you could find yourself without authorisation if your employed de-authorises you more quickly than you anticipated or before you are able to be reauthorised.
Leaving a Network as an AR: Networks usually control client data. Restrictions are also often stricter around non-solicitation and client data.
Leaving as a Registered Individual (RI): Some RI agreements offer more flexibility, but constraints still apply. Pay attention to pipeline business and clawbacks and non-compete obligations.
Practical step: Factor FCA approval times and network onboarding requirements into your plan.
Financial Considerations on Exit
Pipeline business: Who completes in-flight business and how will it be paid.
Lapses and clawbacks: If a client lapses a policy after you leave, clawback arrangements often still apply.
Final Payment reconciliation: Check when final fees and commissions are paid and what deductions will be made from them.
Post termination costs: FCA fees and insurances can remain payable after the contract ends.
PI Run-Off: Some contracts require you to contribute to, or purchase, run-off cover and the timescales for this can be indefinite.
Practical steps
Audit your current contract early. Don’t wait until resignation.
Keep everything documented. Communication records help prevent misunderstandings.
Plan your pipeline and client communication strategy.
Secure your new regulatory home in advance.
Stay professional. Maintaining goodwill reduces friction and speeds up references and release. Our industry is small, calm, respectful exits preserve our reputation.
Request clarity early on exit processes and other key factors.
Moving to self-employment is liberating, but the path can be bumpy if you don’t understand the contractual boundaries guiding your departure. By taking the time to re-examine existing agreements and approaching the transition methodically, you can protect yourself and build the foundation for a thriving independent practice.
