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Financial Ltd could be wound down in ‘radical’ restructure

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Tavistock Investments is considering winding down adviser network Financial Ltd as it looks to restructure the business, Money Marketing understands.

Tavistock announced its acquisition of Standard Financial Group, the parent company of Financial Ltd, in January.

It paid £500,000 for the business initially, plus a deferred consideration of £2,000 for each adviser who remains with the group until 31 March 2016.

Money Marketing understands Tavistock is considering a range of options to restructure Financial Ltd, and has invited some of the network’s members to move across to its adviser business.

Tavistock has 300 advisers and offers an exit strategy for principals looking to retire.

One option under consideration is to wind down Financial Ltd and move all of its members to Tavistock.

Money Marketing understands Tavistock would still be responsible for Financial Ltd’s liabilities in this scenario.

Financial Ltd was banned from recruiting new ARs and individual advisers for four and a half months in July last year after the FCA identified “systemic weaknesses” in the network’s systems and controls.

The FCA required the network to carry out past business reviews into pension switching and Ucis advice.

A source close to the business says: “Financial Ltd is in need of a radical overhaul and there are a range of options available.

“Regardless of what happens there is a commitment to continue with the past business reviews and keep hold of the liabilities.”

Financial Ltd managing director Brian Galvin says the network is changing its proposition, but refused to comment further.

Tavistock chief executive Brian Raven says: “Tavistock Investments is integrating Financial Ltd’s staff and advisers into the group on a planned basis agreed with the FCA before the acquisition completed.

“Each phase of the process is being checked with the FCA to ensure that all required permissions and approvals are obtained.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Ronald McDowell 15th July 2015 at 9:27 am

    I wonder how much each adviser will get from the £2000 bounty paid by Tavistock! just a thought.

  2. I am genuinely astonished any business is still with Financial Ltd given their history

  3. I can only see this as a positive move for Financial. I wish them and their advisers all the best for the future

  4. Well be astonished – they provide a really good cost effective service, the “issues” are all as you say historical, but as usual the press dig up something bad to sensationalise, as good news is not “news’.
    Compliance is maybe a bit heavy in areas where it should be, but better than running the risk of it not being right in the future.

  5. Julian Stevens 15th July 2015 at 2:40 pm

    Given the FCA’s propensity for hindsight reviews and PI insurers’ standard practice of yanking up the ladder at the first whiff of trouble, it doesn’t seem very prudent of Tavistock to have bought any FA business without rigorously excluding all and any potential future liabilities. Fold the company then migrate its client bank would seem to be safer, even if it would mean dumping everything on the FSCS.

  6. What you fail to understand is that Financial have already settled or set aside funds for all their liabilities under completed FCA reviews and are actually solvent, something other networks cannot offer. Maybe thats why Tavistock have taken them on as they are a good purchase with a good membership of quality advisers

  7. Julian Stevens 16th July 2015 at 4:33 am

    If Financial is such a good purchase, Gordon, and has already set aside sufficient funds to cover all and any possible future liabilities, why is Tavistock thinking about winding it down?

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