Ishall tell you a story about a very acquisitive, rapidly growing IFA. Over a period of a few years, it accumulated businesses, staff and clients and boasted after a few years of being a major distributor of financial products.
Meanwhile, the average IFA kept his head down, worked hard, serviced his clients and looked on in awe. “Why can’t I do that?” a few of them thought. As one major brokerage and another got into fin- ancial difficulties, they were snapped up by the business.
A few old wise heads could not understand how businesses that had floundered could be moulded together into one coherent, successful, prosperous lump.
Other observers could not understand how the business did not seem to have suffered the downturn in markets and the recession as they bragged of new investors and acquisitions.
A few months ago, we heard murmurings that they were short of cash and needed new investors. Then we heard of a management buyout. The current management had found someone to back them to buy the business.
Every life company and unit trust group sighed with relief that one of their major distribution channels was on a sound footing and would be around to flog lovely products with all that luscious commission.
Should we be congratulating The Money Portal, or TMP as they seem to prefer to be called? Well, actually no. I believe it is unfair for the firm to dump their potential misselling liabilities for the rest of the industry to pay for.
As part of the deal to transfer the advisers from Money Portal to Honister Capital, the business left behind the potential misselling liabilities of the Bates’ advisers who were transferred to a new entity – Honister Partners.
You might be wondering why am I so hot under the collar about it. Every person reading this column, unless they are thinking of doing the same thing, should be exceedingly hot under the collar. Who is going to pick up the bill?
I am even more incensed in this particular case because this is not the first time it has happened with many of these advisers as the majority of Bates advisers came from Millfield, which also went into administration with liabilities.
So this year when you get your FSCS levy and you splutter over your coffee when you see the amount that you are being asked to pay, take your hat off to The Money Portal.
Peter Hargreaves is chief executive of Hargreaves Lansdown