Swansea-based independent advisory firm AW Dallas Financial Services, trading as Portfolio Pensions Consultancy will be wound down and placed into liquidation in the next few days.
The firm ceased trading on 2 August 2021 and went into creditors’ voluntary liquidation on 5 August, with John Cullen, partner at accountancy firm Menzies, being instructed by AW Dallas’ directors to help with the process.
Shareholders and creditors were given notice of this on 23 August 2021.
The move is mainly the result of financial advice given on defined benefit (DB) pensions to British Steel scheme members, the accountancy firm said.
This is because AW Dallas received complaints on the advice provided to clients between August 2017 and February 2018, several of which were referred to the Financial Ombudsman Service (FOS).
The total liability in respect of such complaints is expected to exceed hundreds of thousands of pounds if upheld, Menzies said.
As a result, the volume of complaints filed with the FOS has made the company insolvent.
Inappropriate M&A bid
At first, AW Dallas directors and the accountancy firm hoped that the business and its assets could have been sold through a “pre-packaged sale and administration of the company to an associated business”, Menzies said.
But while an offer was made, the Financial Conduct Authority (FCA) opposed the sale as the offer was made by a firm which is connected to the IFA business, with the directors and senior managers being the same for both companies.
The regulator did not think it was appropriate for the M&A deal to go through or that it would benefit clients that were “potentially mis-advised by AW Dallas, and whose redress liabilities would likely be left to the Financial Services Compensation Scheme (FSCS)”, the accountancy firm added.
Other offers were made for the customer list by other unconnected companies, but of much lower value, and Menzies concluded that they were insufficient to warrant placing the firm in administration.
Seeking redress
John Cullen, partner at Menzies, said: “We had hoped to sell the business and assets of the company for a certain sum, and in so doing allow the business to continue operating.
“This has not been possible however, and despite owning a client list of more than 200 client accounts, the directors have been left with no other option but to instruct Menzies to assist with placing the company into liquidation with immediate effect. We hope to complete a sale of the customer list to a third party shortly, but regrettably the value generated will not be significant.
“The directors of AW Dallas Financial Services came to us for insolvency advice because of the mounting number of claims the firm was facing, nearly a quarter of the client book. The excess payable on its professional indemnity insurance liability in respect of these claims, which represents about £30,000 ($40,845, €34,900) per claim, could not be met.
“Any individuals seeking redress from AW Dallas Financial Services should refer their claims to the FSCS, which is able to guarantee payment up to a value of £85,000.”
