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Bluefin IFA arm hit by redress and legal costs

Recently appointed Bluefin Personal Consulting boss Graham Harvey
Recently appointed Bluefin Personal Consulting boss Graham Harvey

Axa-owned IFA Bluefin Personal Consulting has reported a £960,000 pre-tax loss for 2011, compared to a £270,000 profit in 2010.

The firm’s accounts for the year ending December 31, 2011 also reveal Bluefin has made a redress provision of £600,000 for possible unsuitable advice as well as paying an inter-company creditor £4.9m.

Figures show a large increase in administration expenses from £726,000 in 2010 to £12.6m in 2011, which the firm says largely relates to the integration of IFA firms Cavendish Financial Management, Morgan James and Watterson Wealth Management.

During 2011, Axa made contributions of £2.8m to Bluefin Personal Consulting. The firm changed its name from Bluefin Wealth Management in December 2011.

The firm is also subject to legal disputes for which it says it cannot yet make provisions for.

A statement in the accounts says: “The company is subject to claims and litigation in the ordinary course of business resulting principally from alleged errors and omissions. Although all claims are defended, appropriate provision is made for potential liabilities including expenses.

“There remains a contingent liability for all other items that arise in respect of potential claims and litigation notified to the company at the date of these accounts. Claims may arise several years after the original events which are the subject of dispute.”

Axa put Bluefin up for sale in November. In April, Capita announced it was to acquire Bluefin’s corporate advice business, Bluefin Corporate Consulting, and merge it with Capita Hartshead.

In April, Axa appointed Graham Harvey as managing director of Bluefin Personal Consulting, following the sale of its corporate arm. Harvey was previously Friends Life managing director, UK individual products.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. an inter-company creditor eh? sounds like theyre pulling the pound notes out of the bit that they know is doomed…..
    I hope any non-inter-company creditors and litigation claimants are feeling benevolent.

  2. It’s the £12m to integrate three top quality financial planning firms that interests me … What on earth costs that much – and if it really does cost that much to integrate top notch businesses then how on earth can growing a business through acquisition be a viable proposition … ??

  3. … who says a firm has to be viable, once it has achieved the aim of self-serving its architects….

  4. If this business was not owned and bankrolled by a large life co it would have gone bust years ago.

    Maybe they should just accept that this is not a profitable model and close it down. No point in flogging a dead horse.

  5. All the people who were initially involved in setting up this business have taken their money and gone on to new ventures. AXA appear to have been left with the rump of a non profit making business. The whole exercise has been an example of how not to run a business.

  6. Julian Stevens 19th June 2012 at 8:19 am

    I’d thought that standard business acquisition practice in this day and age is to buy the client bank but absolutely not any liabilities.

    Given that it’s impossible to predict the FSA’s next target for one of its “thematic” reviews (regardless of its own regulatory failings), to take on a client bank on any other basis would appear to be extremely dangerous.

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