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Old Mutual admits liability claims are inevitable in wake of Intrinsic deal

Old Mutual Wealth has admitted liability claims following its acquisition of Intrinsic are inevitable but says the deal was still worth doing.

The provider completed the acquisition of the 3000-member advice network last week.

Speaking at a press briefing last week, Old Mutual Wealth chief executive Paul Feeney said: “Lets be quite frank, there will be something out there. We know you don’t get to advise a million people and not have any issues. We think we are well covered in that space, we have indemnities on the Positive Solutions side and on this side.

“The question is, what happens when we find these issues? We have a brand and reputation and we will stand behind it. That is what I mean when I say it is a big commitment. It is not just the capital outlay to buy Intrinsic. It is also the commitment we are making having brought Intrinsic.”

An Old Mutual Wealth spokesman later added: “We have existing professional indemnity cover plus selling shareholder indemnities that cover us for past advice. We cannot discuss the specific details of the selling shareholder indemnities.”

Intrinsic chief executive Richard Freeman added the network has recently renewed its professional indemnity insurance at good rates.

Derbyshire Booth managing director Greg Heath says: “The historic liability issue will not go away and potentially undermines the value of any advice business.”

Sees pages 8 and 9 for full coverage of the Old Mutual Intrinsic deal

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