Is it safe to move my investments to a self-employed adviser via a third party?

I am currently seeking independent advice regarding a situation that has arisen with my existing financial advisory relationship. The firm I currently invest with has recently been acquired by a larger corporation. Since the merger, there has been considerable internal disruption, and I have been informed that several staff members, including my financial advisor of the past 2.5 years, are planning to leave.

My advisor has indicated that he intends to become self-employed and has proposed that I continue working with him independently. He has explained a process whereby I would sign an authorisation letter to transfer my investments to a third party, which would then redirect the funds to him. He mentioned this approach is intended to avoid triggering any non-poaching clauses with his current employer.

This proposal has raised some concerns for me, particularly regarding the legality and ethical implications of such a transfer, as well as the security of my investments during this process. I would greatly appreciate your professional opinion on the following:

1. Is it legally and ethically sound to transfer funds via a third party in this manner?

2. Could this process expose me to any financial or regulatory risks?

3. What would be the recommended steps to safely transition to a new advisor, especially one who is becoming self-employed?

I am keen to ensure that any decisions I make are fully compliant with FCA regulations and in the best interest of my financial wellbeing.

Thank you in advance for your time and guidance. I look forward to your response.

Thanks for your question. I would be interested in who this 3rd party is?

Aside from that, I feel your concerns are valid and whilst it may be okay from a regulatory point of view (if the 3rd party is an FCA-regulated firm), I would suggest it is not legally sound or ethical.

If the adviser has a non-poaching clause, he or she is then looking to break an agreement they have. That would probably fail a “fit and proper” status test from the regulator and does not come from an honest place.

I understand that going self-employed means they will need to be more commercially-minded, but this feels the wrong way to go about this. Being a client of a self-employed adviser does not expose you to more risks, and you will continue to be afforded the same level of consumer protections you have right now; but I would suggest that the approach feels dishonest and is about self-interest, over your interests.

I guess the question is, would you wish to work with someone who is willing to not honour a contract they have in place and go behind the back of their current employer in this way?

You can always decide yourself to move your funds to another adviser, if you do not feel comfortable with the new company, at any time. After all, it is your money.

Hope this helps.