Administrators are seeking £1.2m in pipeline commission from Caerus following the collapse of one of its largest member firms earlier this year.
The Welbeck Group, placed into administration in March, includes Welbeck Consulting and Welbeck Wealth Management.
Administrators ReSolve have written to network Caerus requesting payment of £1.2m in pipeline commissions on business written by Welbeck advisers.
Money Marketing understands Caerus expects to retain the commission payments to offset a loan made to Welbeck.
Any future clawback liability rests with Caerus. The firm retains trail commission on business written by former advisers.
An administrator’s report, filed at Companies House, shows Welbeck was forced to close down following a surge in adviser exits. The administrators state 25 staff left in January.
The report says: “While the [Welbeck] group initially thought it may be able to recover from such a loss, a number of other IFAs soon followed. Without the critical mass of IFAs selling financial products, the group was unable to trade.”
Money Marketing understands 14 advisers and 11 support staff left in January while 16 advisers remain with Caerus. The firm employs 330 individual advisers in total.
Openwork is also listed as a creditor of Welbeck. A statement of affairs from ReSolve shows the network is owed £877,000. Openwork says it “will always seek recovery of debts to protect shareholder interests”. Some of Welbeck’s former advisers have joined the network.
HM Revenue & Customs also has an unsecured claim of £64,000 while Metro Bank is owed around £1.5m.
Money Marketing understands the Metro Bank loan is secured against a personal guarantee from Welbeck shareholder Greg Knight. Caerus chief executive Keith Carby is a non-executive director at Metro Bank.
Greg Knight is listed as a shareholder in Caerus.
Carby, Knight and ReSolve declined to comment.