IFA network Alpha 2 Omega has been placed into administration.
As revealed by Moneymarketing.co.uk, Simon Underwood and Rupert Mullins of Benedict MacKenzie have been appoin- ted joint administrators for the network as of January 25.
Last week, the FSA suspen- ded A2O from all regulated activities over concerns around its compliance arrangements.
A2O sent a letter to its 50 appointed representatives, informing them the regulator had decided to change its permissions and had ordered it to cease all regulated activities for which it has permission from 5pm on January 21.
Earlier this month, the FSA ordered A2O to stop new business on certain specific funds, including Arch cru, as well as on structured products, pension transfers and drawdown.
It is understood that a number of A2O clients had sign- ificant exposure to Arch cru.
It is the second time many of the A2O advisers have faced network problems after Kilminster Financial Management went into liquidation in June 2008.
KFM head Malcolm Kilminster’s own practice, alongside around 30 ARs, transferred to A2O in January 2008 in a deal that earned Kilminster £150,000. He sold his own business to A2O for £265,000, with a further 350,000 to be paid after six months and 12 months.
The deal saw any residual income in KFM pass to Kilminster’s own practice if KFM ceased trading.
The FSCS has had £224,500 of claims from KFM clients so far.
One A2O appointed rep says: “There has been a disgraceful lack of communication from the network from start to finish on why it got into this position.” He says he and other appointed reps have been inundated with calls from other networks looking to recruit since news of A2O’s suspension from regulated business.