Pensions and wealth management business Mattioli Woods is in a legal battle with its professional indemnity insurers over £400,000 worth of potential claims about advice it has given.
In its preliminary results for the six months to 30 November, published this week, the firm says its PI insurers are refusing to indemnify the firm for the claims, which relate to the period from 18 February 2010 to 17 August 2011.
Its results state: “The group is of the opinion that the insurers’ position is without any merit and is challenging their view.
“The estimated compensation payable should the clients’ claims be successful, with no indemnity provided by the insurers, is £400,000.
“To the extent that the group believes it is possible but not probable that a claim will succeed and result in an economic outflow, no provision is made in these financial statements.”
The firm has increased its pre-tax profits 26 per cent to £2.5m, up from £2m in the six months to 31 May.
Its revenues increased 29 per cent to £11.3m, up from £8.7m, as its client assets grew 13 per cent from £2.9bn to £3.24bn.
Syndaxi Chartered Financial Planners managing director Robert Reid says: “While PI insurance is meant to protect you there is always a chance you have done something in a particular way that invalidates it or someone sees a liability where you do not.”