I was most interested to read your article concerning Bennetts UK (24 April, Insurance Times).
In November 2001, after being pursued for several years, I agreed to proceed with the sale of my long-established family broker, only as a result of Bennetts agreeing to increase its purchase multiple to 1.375% of the retained business with me remaining within the business as a consultant for the 12-month handover period.
This would seem a very attractive offer to any broker considering retiring from broking, prior to the sweeping changes that the FSA will bring.
However, Bennetts consistently failed to pay the commissions for the retained business within the timescale set out in the contract.
It was always slow in paying the invoiced consultancy fee, as my invoices always seemed to miss its cheque settlement dates, it only settled invoices once a month.
Having paid only two of the four quarters commissions, Bennetts delayed making further payment and, despite pressure, delayed making any further settlement until in November it was announced it had been put into receivership.
Ian Darbyshire [Bennetts' chief executive] was quick enough to purchase and continue in business under the same trading name, and avoid all contact with me despite a meeting in January in Bristol where I was assured some form of settlement would be put forward.
I would suggest that the only way the "phoenix" Bennetts will survive, cover costs and grow is by acquisition, it may well offer high multiples that will sound attractive as long as you actually receive settlement.
Bennett's letters to brokers advising sellers that "Bennetts UK Ltd is one of Britain's largest and fastest growing insurance intermediaries" makes no mention of its recent collapse and, as such I feel a "health warning" should be put out to the broking community.
I also wonder how, owing £13.4m, the insurers were willing to transfer their agencies and why GISC did not step in.
If further information is required I will be most willing to assist.
Town & Country Insurance Services