Towergate delays £85m misselling redress programme

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Towergate has pushed plans to begin paying redress for poor pension transfer and Ucis advice to the final quarter of 2015.

The insurance broker had previously planned to begin repayments to customers in the third quarter, but has now admitted that it will not start the process until Q4 “at the earliest”.

In a bondholder report issued in the aftermath of its second quarter results, the broker says: “Given the number of material uncertainties that continue to exist, it is not yet possible to make a reliable estimate of the group’s ultimate liability in connection with these investigations.

“However, purely for the purposes of developing business plans and cash flow projections for the group, it has adopted a range of £65m to £85m in potential redress costs for ETV and Ucis in aggregate, excluding costs and expenses.”

The maximum the business expects to recover under insurance is £12m, subject to a deductible, in addition to costs.

Towergate sold its Towergate Financial business as part of a management buy-out backed by Palatine Private Equity earlier this year, with it subsequently rebranding as Wren Sterling.

However, as part of the deal, the liabilities for the Ucis and ETV misselling remained with Towergate.