This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.
X
MM+cover+small+180914
Categories:Advisers

Honister Capital goes into administration

  • Print
  • Comments (32)

Honister Capital has gone into administration after it failed to secure professional indemnity insurance.

Grant Thornton has been appointed administrator for the group, which includes advisory firms Burns Anderson, Sage Financial and Honister Partners and its subsidiary B-A Financial Limited. Honister Capital has over 900 self-employed financial advisors across the brands and 190 back office staff.

In a note sent to advisers this morning, seen by Money Marketing, chief executive Colman Moher says advisers are no longer able to write new business, with immediate effect.

Honister Capital Holdings will continue to operate direct-to-consumer business Willis Owen, which will be unaffected by the move.

In the note to advisers, Moher says: “Due to the history of some of our businesses, we have been exposed to large claims relating to business written by advisers who have long since left us and this has severely affected the premiums we have had to pay. The extent of policy excesses and exclusions has compounded this. 

“It is with great regret and sadness that we have to inform you that we have been unable to obtain PII cover for the coming year which means that Honister Capital Limited and its subsidiaries will be unable to trade from today. The business has had no choice but to enter into Administration and consequently you are no longer able to write new business with immediate effect.”

The note says all employees face immediate redundancy, with the exception of certain staff who will be retained on full pay to effect an orderly wind down. 

The administrator’s representatives are holding meetings with advisers today and tomorrow at 10am to outline details of their redundancy packages.  

Nigel Morrison, Alistair Wardell and Richard White of Grant Thornton have been appointed joint administrators of Honister Capital.

Morrison says: “It is unfortunate that the only course of action possible in this situation for the Group is an orderly wind-down.

“No customer should be disadvantaged as the group does not hold client monies, although I would urge any customer who has paid for but not yet received a financial product to contact the product provider in due course.”

In February, Honister Capital chief executive Richard Pearson announced he was leaving the firm after less than a year in the role. Group chief financial officer Moher replaced Pearson in April.

In August, Honister announced it was cutting staff in a bid to reduce its operating expenses as a result of increased regulatory and trading costs and in January, Honister reassured investors that it will be able to meet its liability costs this year in a solvency statement filed to Companies House.

A Willis Owen spokesman says: “Willis Owen and its clients are unaffected by an entirely separate part of the overall Honister Capital Holdings business being placed into administration. 

“We are a directly authorised and regulated business with the FSA and will continue to operate as normal.  We can assure investors that trading continues as normal via the Willis Owen platform.”

Honister Capital was formed in June 2009 when it acquired the principal advisory and direct businesses of The Money Portal Limited in a move that saw the rest of The Money Portal, including national IFA Bates, go into administration with debts of £55m.

The Money Portal acquired execution-only business Willis Owen and national IFA Bates Investment Services in 2003 and Berkley Berry Birch subsidiary Weston Financial Planning in March 2006, as BBB went into administration.

The firm took on Millfield Partnership Limited and the Sage network in July 2006 for £10.5m, with the rest of Millfield placed into administration.

Honister Capital has provided two helpline numbers for affected advisers, which open at 11.30am today. Advisers can call 01482 385385 or 01625 667000 if they have any questions about the firm’s administration.

  • Print
  • Comments (32)

Daily Email Updates
If you enjoyed this article, sign up to receive the latest news and analysis from Money Marketing.

The Money Marketing CPD Centre
Build your annual CPD - you can log and plan your CPD hours for free with The Money Marketing CPD Centre.

Taxbriefs Advantage
Advantage is a digital reference source giving unbiased, independent, answers to your technical queries. Subscribe to Taxbriefs Advantage.

Readers' comments (32)

  • Great. Another failed umbrella group goes belly-up. Its PI insurers can obviously see what's about to happen so now the rest if us can pay the claims through FSCS.

    Meantime, the usual suspects of Directors have jumped ship, avoiding liabilities and off to their next ventures, which I have no more confidence in than their long list of past failures.

    Unsuitable or offensive? Report this comment

  • Phew - Im glad I left them when I did - that place was run by a bunch of individuals with not a degree or ounce of sense between the managers.

    Good luck to the employees - I hope you get your commission. Richard Pearson should have told his employees whats happenning before jumping the sinking ship - however, what goes around, comes around.

    Unsuitable or offensive? Report this comment

  • Here we go again, first Inter Alliance, then Millfield, then Bates Millfield, then Bates, and now Sage.

    The lack of notice is amazing!

    Unsuitable or offensive? Report this comment

  • Perhaps we should be asking who will be able to secure cost effective PI Insurance? If the present round of funding via fines for the FSA and Treasury continues and the Ombudsman proceeds along the peoples champion route, it seems likely that many firms will suffer or fail. Maybe less snearing of our less fortunate Industry colleaugues and more action is required.

    Unsuitable or offensive? Report this comment

  • It looks to me that they cherry picked the best parts of other groups that were in trouble prior to going into administration and now they themselves have gone. I know of other groups that have gone the same way but what annoys me is that their CEO's are now living the life of luxury. Perhaps I am becoming cynical or jealous even as I am not limited and must see out these difficult times to the very end.

    Unsuitable or offensive? Report this comment

  • Perhaps the answer to PII is that it should no longer be a condition of FSA registration for firms and each individual adviser should have their own PII.

    That would sort out the wheat from the chaff.

    After all, if a solicitor sets up his/her own practice as a sole trader, they have to have individual policies.
    Most IFAs operate as sole traders even if under the umbrella of a network or larger firm.

    Why not advisers ? After all, if you employ someone you have to have employers liability insurance and it is advisable to combine it with Business insurance for equipment and loss of business through disasters etc.

    The costs of PII for most individuals could be dramatically reduced and only the dodgy dealers would suffer higher costs.
    My current network charges me £1080 pa for my contribution to the collective policy (£90pm) I am sure that I could negotiate a better deal, based on the risk profile of my practice.

    If this was adopted, networks would not have to close down and their RIs would only see those who failed to secure cover, lose their jobs.

    I am sending this in to the FSA as a suggestion. Anyone listening ? Thought not! Better close down this sector once and for all much easier for the FSA.

    Unsuitable or offensive? Report this comment

  • I see Sage Financial were / are on the Herbert Smith Keydata list...

    Unsuitable or offensive? Report this comment

  • I am an adviser with Sage and have had no communication from them regarding this matter at all. I have been informed by your publication via email this morning. The laugh is, they have just completed the annual fitness and propriety for advisers, when are the FSA going to ensure the wellbeing of advisers and ensure these Networks are properly run with the Directors offering personal guarantees. Having been in this position with MBSL (Network Data) we will watch our commission pay of Network debts where as 90%+ belongs to the AR firms not the network.

    Unsuitable or offensive? Report this comment

  • Surely nobody can be surprised after the capital restructure in January of this year. Cynically reorganised for failure by the owner and his representatives.

    Unsuitable or offensive? Report this comment

  • The past is the present.

    Legacy carry over is frightening and if the historical track record of buyout companies is unknown then this causes problems for us all.

    Unsuitable or offensive? Report this comment

View results 10 per page | 20 per page | 50 per page

Have your sayEdit my profile/screen name

You must sign in to make a comment

Fund Data

Editor's Pick



Poll

Is Labour right to be concerned about the unintended consequences of the Budget pension reforms?

Job of the week

Latest jobs

View all jobs

Most recent comments

View more comments