Tavistock Investments has pledged to underwrite the liabilities held by Financial Ltd once it closes the adviser network.
Earlier today, Tavistock’s annual results revealed the firm is planning to close Financial and launch a new network called Tavistock Financial.
Money Marketing revealed Tavistock was considering closing Financial in July.
The stricken network was banned from recruiting appointed representatives in July 2014 after the FCA found “systemic weaknesses” in the company’s systems and controls.
A Tavistock spokeswoman says: “Financial Ltd had made full provision for its liabilities in its accounts before we acquired the business as part of the acquisition of Standard Financial Group.
“Tavistock Investments, as agreed with the FCA prior to completion of the acquisition, will underwrite the provisions made in the Financial Ltd accounts.”
The firm says 236 advisers have already moved to Tavistock Financial. Remaining Financial Ltd advisers will be invited to become ARs of the group’s other advice business, Tavistock Partners.
Tavistock announced the acquisition of Standard Financial Group, the parent company of Financial Ltd, in January.
It paid £500,000 for the business initially, plus a deferred consideration of £2,000 for each adviser who remains with the group until 31 March 2016.
In its results, Tavistock says: “The establishment of the new network will enable the company to achieve significant operational cost savings, most notably through a reduction in the level of the professional indemnity insurance premium and other regulatory fees.”