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FSA urged to spell out stance on phoenixing

The FSA is coming under pressure to clarify its position on phoenixing after the Money Portal transfer of assets and management to Honister Capital.

On June 17, Money Portal was placed into administration with debts of around £55m. Subsidiaries Burns Anderson, Sage Financial Services and Willis Owen transferred to investment vehicle Honister Capital to be run by former Money Portal chief executive Mark Lund and other former board members. Bates was placed into administration, meaning claims could fall on to the Financial Services Compensation Scheme with assets transferred to Honister.

Leading industry figures have called on the FSA to explain why it has allowed the transfer to take place given its tough talk on stamping out phoenixing. Personal Touch Financial Services group sales director Dev Malle says: “Morally, the whole deal is diabolical. What about the creditors who may go into administration as a result? There needs to be more transparency about why the FSA has allowed this to take place.”

Threesixty partner Phil Young says: “It would be useful for the FSA and other parties involved to make public some of the details of the deal to reveal whether there have been any changes to the rules or whether an exception has been made.”

PMS managing director John Malone says: “The FSA must be much tougher and be clear on the rules.”

Positive Solutions chief executive Jim Reeve says: “For the FSA to say one thing and then allow people to do something that is seemingly against that is confusing. It needs to clarify its stance.”

Honister declined to comment and the FSA would not comment on specific firms.

Speaking at the Mortgage Business Expo last November, FSA director of small firms Lesley Titcomb warned the practice was “rearing its ugly head” again and promised to “nip it in the bud”.

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Comments

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

  1. Andrew Harwood 2nd July 2009 at 10:55 am

    FSA urged to spell out stance on phoenixing
    I do not understand how the FSA who is paid by the industry can refuse to comment on a blatant injustice that it seems to have supported. It has a duty to comment and should be forced to do so.

  2. Phoenix – FSA Stance
    I have evidence of an IFA practice “phoenix”.
    I warned the FSA 12 months before the phoenix happened, and not only did the FSA allow it to proceed, but the FSA themselves were one of the creditors for the sum of £18,000 fees owing to them from the IFA practice !!!

    I have correspondence from the FSA that they would investigate, and the final correspondence in which they tell me to stop baggering them with this issue and that they would ignore anymore letter and telephone calls I make to them !!!

    2 months after this final letter the Phoenix completed !!!

  3. What about Towry Law?
    Do small IFAs deserve a refund on the FSCS tab they picked up in order to ‘save’ the company?

  4. Lesley should become a politician
    as she seems to have the same definition of Promise and “manifesto pledge” as they do unlike the rest of society!
    When is a Phoenix NOT a Phoneix? When it is a dead parrott…………………

  5. Phoenixing and the FSA
    Just one more example of how poor the FSA is at doing its job.

  6. Mystery Shopper for IFAs 2nd July 2009 at 2:23 pm

    A case of the Pot calling the kettle black
    What a cheek, the FSA looking at pheonixing! Well what happened to the PIA c*ck ups such as the pension review. Many millions of pounds were paid out in wrongly compensation to clients who transferred preserved benefits from private sector final salary pensions. Now nearly all those pensions are insolvent and can’t meet the promised benefits. So what happens to those poor old advisers and insurers who coughed up. Now it’s been proved that if you had transferred the client one would have been done a massive favour. Better than being in an insolvent scheme eh! Conveniently FSMA 2000 does not pay compensation to mistakes made prior to Dec 2001 by previous regulators. Those very people running the PIA went straight into the FSA. That’s what I call real pheonixing with the governments’ blessing. The people involved in the review at the regulator should be made to pay personally. Under FSMA 200 acting in bad faith gives them no protection. But will anyone take up the cause? Probably not as we live in an inward looking selfish society which blames everone else for their very own mistakes. String them up is what I say.

    P S The endowment debacle is the other thing that will be proved wrong as the FOS cashes in.

  7. Stephen Girling SG Wealth Management 2nd July 2009 at 3:46 pm

    Phoenix IFAs
    The FSA has a sad record with regard to their inaction, despite talking tough. Ultimately they are meant to answer to the Treasury. I have corresponded with the Treasury Minister, Stephen Timms, for a number of years over this issue, but they clearly need to be told the extent of feeling about Phoenix companies, before taking action. If you have any cases you know of, or see related correspondence on the likes of TMP/Honister, can I urge you to forward it to Stephen Timms MP, House of Commons, London,SW1A 0AA or email stephen@stephentimms.org.uk

  8. Julian Stevens 2nd July 2009 at 4:47 pm

    FSA urged to spell out stance on phoenixing
    “Speaking at the Mortgage Business Expo last November, FSA director of small firms Lesley Titcomb warned the practice was “rearing its ugly head” again and promised to “nip it in the bud”. Promises, promises, promises……

  9. Culture of Failure continues
    We need a new Govt so that the FSA can reformed. All these failures are costing ourselves and our clients dear.

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