Surrey IFA Young Ridgway & Associates is expected to be bought out within days by its former management after going into receivership on the advice of the FSA.
The firm, which has 20 RIs, went into receivership last week after the FSA expressed concerns – refuted by YRA – that it could not meet potential compensation claims relating to the sale of structured products.
Former compliance director Idris Nagaty claims the company has nearly £1m to cover around £500,000 of claims which he says should dispel fears that the Financial Services Compensation Scheme will be saddled with its liabilities.
Nagaty will be the manager of a new firm, called the Independent Financial Planning Group, which expects to acquire YRA's assets “imminently”. As IFPG is not buying shares, Nagaty says it should not suffer the same PI problems which hampered YRA, whose chairman, Philip Ridgway, retired earlier this year.
Nagaty says: “We originally wanted YRA to stay open for a couple of years but the FSA said it preferred an immediate winding up. A deal is being finalised right now.”