A2O sale fails over liability concerns
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The administrator for Alpha 2 Omega says it has failed in its bid to secure the sale of the adviser network.
Benedict Mackenzie joint administrator Simon Underwood says that despite interest from a number of parties they have failed to reach a successful conclusion due to concerns over the transfer of liabilities and confidentiality issues under the Data Protection Act.
Underwood says that since his appointment numerous advisers have tendered their resignation from the network with many looking to alternative networks or seeking FSA authorisation.
A20 was placed into administration late last month. North East IFA Moneygate was believed to be frontrunner for the business only to revise its bid downwards, a third was placed on the table late last week.
In an adviser update, Underwood says: “One of the focuses of the FSA has been that the administrators protect the position of all clients of A2O and it was anticipated that a sale of the network would have assisted with this objective.
“In the circumstances I now require all client files to be held to my order. Client files will be required by the administrators - and/or the Financial Services Compensation Scheme, if appropriate - in the event claims are received relating to business conducted by Advisers when appointed to A2O (including current known claims, and claims received in the future). I shall be circulating further details and an undertaking for you to complete and return to me in the near future.
“As regards commission payments, I am taking legal advice and hope to be able to revert to you regarding the position towards the end of next week with further news. In the meantime I am unable to make any payments from the commission account.”
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Readers' comments (9)
Anonymous | 17 Feb 2010 12:55 pm
I suppose the few ifas left will have to pick up the bill for this one also!!!!!!
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Evan Owen | 17 Feb 2010 1:19 pm
Small IFAs will end up with the 'liabilities', it will carry on until there is only one firm left, Mike Fenwick predicted this over two decades ago, nobody listens...
Should small firms be in the same FSCS pot as networks? They are not in the same category for supervision or fees!!
This is depressing me and I don't even have to pay...
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Anonymous | 17 Feb 2010 1:24 pm
I am saddened by the position A2O now finds itself. A lot of good people will have lost their livelihoods as a consequence. I know this network had good intentions and would not have chosen this end. I wish everyone well.
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Anonymous | 17 Feb 2010 1:30 pm
Think the Administrator's missed the boat on this one. "An undertaking for you to complete" - surely there would be one in the AR agreement? Oh-Oh is that the same agreement that agrees to pay commission to the AR.
So you want AR's to sign a legally binding undertaking after the event? Do you really think that is going to happen? Would anyone be daft enough to sign it?
Just ask Sesame about old DBS files. They might have received them but remember the warehouse scene at the end of Raiders of the Lost Ark? That's why they ask former members for a copy of the file (and paying the princely sum of £20 in the process) should there be a complaint about old business - could it be that's easier than trying to find the files?
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Realist | 17 Feb 2010 1:42 pm
Inevitable end to another poor IFA business. The sad part is that those that were of good quality will forever be tarnished with the regulator and prospective employers as a result of their association. Others, however, deserve all that'll come to them...and one suspects that it will.
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Anonymous | 17 Feb 2010 3:15 pm
If Mr Richard Lindley had the audacity to take on Malcolm Kilminster after the mess he left his practice in then he deserves all he gets. Its just a shame yet again on the good ifas in A2O who will now have delays in being able to write business.
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Anonymous | 17 Feb 2010 3:15 pm
If Mr Richard Lindley had the audacity to take on Malcolm Kilminster after the mess he left his practice in then he deserves all he gets. Its just a shame yet again on the good ifas in A2O who will now have delays in being able to write business.
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anonym0us | 17 Feb 2010 7:15 pm
this further demonstrates the reducing value of many IFA business's as we head towards the train crash that is RDR.There will only be restrictive availability for INDEPENDANT advise post RDR. More for the highly trained and a value-less business for those not equiped by training or desire. 57 is the average age of a IFA in UK. The "head in the sand" attitude will no longer be an option after 2012. Having been to a MONEYGATE seminar they obviously have done their DD on this one. Prefering to "jog on by" and let A2O administrators try and salvage something from the mess.The quality individuals will no doubt find a home based on what they are.Quality! The cream always comes to the top.I have seen this when regulation kicked in on mortgages.Some how mortgage brokers think they are excluded from the whole RDR thing !! WRONG.
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Incompetent Regulators Awards Team | 18 Feb 2010 11:58 am
I just don't know why anyone would join a network!
E.g. we have a bunch of incomepetent regulators and networks are just another bunch of incompetent people to get in the way and create more problems. In other words 2 sets of parasites to hinder ones business.
IFAs selling packaged products should not be regulated, just licenced.
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