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BBB winds up national shell and leaves liabilities with compensation scheme

Berkeley Berry Birch is winding up the shell of its national IFA firm and dumping its liabilities on to the Financial Services Compensation Scheme in a corporate reorganisation.

The move has provoked uproar among the IFA community who say BBB is offloading liabilities which will have to be picked up by other IFAs through the FSCS levy. The levy has risen in recent years and covers compensation claims on firms such as Towry Law subsidiary Advizas, RJ Temple and The David Aaron Partnership.

The BBB restructure sees assets – including clients and 150 advisers – transferred from Berry Birch & Noble Financial Services to the formerly dormant BBN Financial Planning. BBNFS has ceased trading and is being wound up along with all liabilities for current and future complaints and pension reviews. The FSCS says it is has no powers to stop the restructure.

The move comes with BBB undergoing due diligence over its proposed merger with Inter-Alliance to create the fourth-biggest IFA in the UK, with 2,000 RIs.

Hargreaves Lansdown chief executive Peter Hargreaves says: “Words escape me. They are asking the IFA community to pick up the tab for transactions they know nothing about.”

Durlacher analyst David Pannell says: “This will happen increasingly across the industry to all the medium-sized firms that are facing difficulty. Advisers will be brought out of the business and given new contracts and the liabilities will be left in the old company.”

BBB says it cannot comment on the move because of the merger discussions.


L&G cuts bonuses as life profits rise by 7%

Legal & General has cut with-profits bonus rates despite achieving a 14 per cent investment return on with-profits assets last year. The company says returns in 2003 were in excess of its longer-term expectations but negative returns in 2001 and 2002 were well below expectations so smoothing means this has not yet been fully reflected […]

Premier releases latest tranche of structured offering

Premier Fund Managers this week released the latest tranche of its Premier limited editions structured product, a six-year growth plan based on the FTSE-100. The manager says the structured product is offering investors the potential of growth whether the market rises or falls and there will be 100 per cent redemption of capital whatever the […]

B&B chief executive Rodrigues resigns

Bradford & Bingley group chief executive Christopher Rodrigues has resigned to take up a position as president and chief executive of Visa International in San Fransisco. He will be replaced by Stephen Crawshaw, currently in charge of the group&#39s core lending and savings business. Crawshaw says: “I am clear about our priorities in both the […]

Kreis puts value in capital

Kreis Consulting is looking for up to £3.3m to add up to six pubs to Tomahawk pubs. This is an enterprise investment scheme that differs from most EISs by providing income through dividends, as well as the usual capital growth The EIS was established in 2002 to buy and develop rundown pubs in the London […]


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