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Caerus hit by collapse of member firm

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. 

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Comments

There are 11 comments at the moment, we would love to hear your opinion too.

  1. Problems just seem to follow Mr Knight around…Google search…. ‘KLAS Greg Knight’ (4th entry … howigotmymoneybackfromy….& scroll down)

  2. Who’d buy Caerus now….at least until the true depth of this is determined, and it could be a VERY large liability indeed. Looks like a very luck escape for Skandia / Old Mutual, who were in talks with Caerus in 2012/13.
    Wisely Old Mutual bought Intrinsic, & now Richard Freeman and the Intrinsic team appear to have acquired much of the profitable part of Welbeck’s business without picking up the not inconsiderable (it would appear) legacy issues. As Welbeck was producing a significant proportion of Caerus’s overall business, and seemingly doing so largely on indemnified terms, this could prove to be a black hole for Andy Ferns etc for years and years to come……

  3. Who’s buy Caerus now…at least until the true depth of this is determined, and it could be a VERY large liability indeed. Looks like a very lucky escape for Skandia / Old Mutual, who were in talks with Caerus in 2012/13.
    Wisely, Old Mutual bought Intrinsic, & now Richard Freeman and the Intrinsic team appear to have acquired much of the profitable part of Welbeck’ business without picking up the not inconsiderable (it would appear) legacy issues. As Welbeck was producing a significant proportion of Caerus’s overall business, and seemingly doing so on indemnified terms, this could prove to be a black hole for Andy Ferns etc for years and years to come….

  4. Not good is it for Caerus – Not as if they are losing staff at the same time as rocketing up the FCA’s radar is it……. Oh well, once the contagion sets in i can see other firms leaving too once they realize the promise of a capital gain is fast disappearing……..

  5. Oh Dear not looking good is it for Caerus and Directors?

  6. Didn’t realise Caerus was up for sale Simon Templar?

  7. That was their promise John Edwards…… All about the capital gain…. Promising the SJP model but with a shareholding…… looking at their profit and the exodus of quality advisers plus the increasing scrutiny i can see then cashing in their chips!

  8. Greg Knight again! Is it just me or does trouble seem to follow Mr Knight around??

    Google Search ‘KLAS Greg Knight’ and have a look at howigotmymoneyback the alarm bells were ringing back in 2009!

  9. Yes ADviser I have heard that they have lost a lot of staff over the last year mainly from their takeover of Paradigm, heard this from recruiters morale not good either they said, terrible state of affairs.

  10. Richard Hammond 6th July 2015 at 2:58 pm

    Individual Insolvency Register

    Name Date of Birth Court Number Start Date Type
    GREGORY WILLIAM KNIGHT – 16/01/1958 High 0002216 01/07/2015 Bankrupt

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