FSCS declares Bates Investment Services in default
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Former Money Portal subsidiary Bates Investment Services has been declared in default by the Financial Services Compensation Scheme.
The FSCS says it has so far received eight complaints about the firm totalling compensation of around £130,000.
Bates was placed into administration in June 2009, along with its parent company Money Portal which had debts of over £52m. The Money Portal’s other subsidiaries, Sage, Burns Anderson and Willis Owen continued under a new parent company, Honister Capital, while Bates advisers transferred into a new entity, Honister Partners.
In an interview with Money Marketing in July last year, Honister Capital strategy and business development director Alan Easter said that Bates was a profitable business but had been supported by historic inter-company loans from Money Portal which were called in when Money Portal was forced into administration. He said the move had nothing to do with dumping liabilities onto the compensation scheme.
The majority of Bates’ 500 advisers transferred across from Millfield when it went into administration in 2006 and so only had three-year trading records with Bates.
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Readers' comments (7)
Anonymous | 26 Apr 2010 5:22 pm
Here we go again another levy to hit us I suspect. As was said a while ago 'last one out turn of the lights'
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Anonymous | 27 Apr 2010 9:17 am
The levies would be a lot less if numerous less-scrupulous advisers stopped 'churning' their companies and as the article says above "dumping liabilities onto the compensation scheme". I've repeated seen evidence of 2 or 3 firms operate sequentially from the same business address, with names designed to deceive. The last honest adviser will be the one to pick up the tab,
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Gillian Cardy | 27 Apr 2010 9:55 am
And no-one's yet come out to say how Burns Anderson or the parent company will be affected by the fraud case recently reported on - if they are held liable and PI doesn't pay up could there be more on the way ... ??
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Chris Neil | 27 Apr 2010 10:02 am
Now there's a thing!!!!
Potted history; Millfield heavily in debt losing a million per month bought buy the Money Portal already in debt who borrowed even more money to fund the purchase of Millfield who were in debt to several life offices around 3 million a piece.
And who sanctioned the purchase of Millfield by the Money Portal? yes you have guessed right again and it is the top answer on family fortunes..... The FSA.
In reply to anonymous 9.17
Now there's a thing!!!!
Last year I dicovered an IFA in Cardiff who had systematically been ripping clients off and in one case had transferred a client out of one of the UK's leading accountacy firms FS scheme.
He had also done the "Phoenix" job, (and I don't mean the admin company) trading from the same premises under a different name. I wrote a lenghty report on this and sent it to our Lords and Masters (sic) and guess what they did?
Yes you have guessed right again and it is the top answer on family fortunes, SFA oops meant to say FSA......
Why should they give a toss when they can just bolt the stable after the horse has gone and send the bill to the rest of us through the FSCS
But then I have given up being surprised by anything that eminates from the FSA these days. They'd have the Queen kneeling before them if they had their own way.
Chris Neil
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Anonymous | 27 Apr 2010 11:57 am
Whilst a lot could be said about the happenings one key matter is that it seems the liabilities under Bates will now fall to the FSCS. Some questions come to mind:
1. Why did the FSA permit liabilities to move from the original firm and its advisers rather than move across to the newco?
2. What sanctions or training if any have been applied to advisers that moved across where the FSCS considers that compensation is due (presumably due to an adjudged failing in respect of an advisors advice). For example and pervesely, the same adviser in newco could theoretically encourage a client to complain about advice they had provided in old co which would fall on the FSCS and still be able to advise the client in the newco - perhaps on how to invest the compensation! (this may be unlikely due to client relationship issues but it demonstrates the inequity of the situation). If nothing has been done about such advisers or their advice then under FSA principles why is that TCF?
3. Whether the FSA required work of Bates in relation to reviewing past advice - if so has that continued in newco, stopped entirely (hardly TCF) or fallen on the FSCS (hardly fair on the rest of the industry).
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Evan Owen | 27 Apr 2010 2:34 pm
The FCS said it would go after 'the ultimate holding company'.
Gor for it and stop piling the agony upon the long suffering small firms!!
There but for the grace of God go I, and I'm not even religious.
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sean | 27 Apr 2010 6:51 pm
I keep saying it - why oh why or why are we as an industry responsible for other businesses that fail. If the FSA (who we also pay for) did it job this wouldnt occur. Can you imagine the Government trying to get car dealers to stump up the money to bail out car manufacturers or other dealers - no neither can I.
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