Financial advice firm Portal Financial Services, formerly Portafina, has failed, according to the Financial Services Compensation Scheme (FSCS).
The firm entered compulsory liquidation on 18 January 2023 – after a petition to wind up was sent to the high court on 9 January 2023.
Portal Financial Services became authorised in 2009. According to the Financial Conduct Authority (FCA) register, the firm applied to cancel its permissions on 18 June 2021.
The FSCS said in a statement that Portal is one of the firms “associated with claims regarding the British Steel Pension Scheme (BSPS) and also defined benefit transfer advice related to other occupational pension schemes”.
The UK lifeboat scheme told International Adviser that although Portal has failed, the FSCS haven’t had any claims yet so have not yet declared the firm in default.
It is advising customers that it is open for claims.
Court case
In March 2022, Portal Financial Services was blocked from challenging a number of decisions made by the Financial Ombudsman Service (FOS) in relation to pension transfers.
The firm took the FOS to the high court arguing that it was not partially responsible for client losses after they were advised to invest a portion of their pension pots in high-risk, unregulated collective investment schemes (Ucis). Justice Sweeting rejected Portal’s grounds for a challenge.
Clients were introduced to Portal by a third-party advisory firm, Cherish Wealth Management, which was the appointed representative of Shah Wealth Management, a financial advisory firm authorised by the FCA which did not have permissions to advise on pension transfers.
Cherish clients were referred to Portal to determine their suitability to transfer their existing pension arrangements under one or more occupational or personal pension schemes into a self-invested personal pension (Sipp).
Portal’s pension transfer advice was sent to clients as a written ‘suitability report’. Cherish provided further advice on the investments to be held in the Sipp wrapper to all but one of the clients involved, the high court said.
Without Portal’s knowledge, they were advised to invest a portion of their pension pot in high-risk Ucis and have suffered losses as a result.
Both Shah and Cherish commenced winding up on 5 July 2016. Clients made complaints to the FOS in relation to the transfer advice given by Portal.
In summary, the FOS ruled against Portal on the grounds that:
- It was not entitled to “divorce” the advice on the suitability of the pension transfer from considering the suitability of the underlying investments – or to rely on Cherish doing so;
- It failed in its primary duty to properly advise on the suitability of the transfer; and
- Although, Cherish “may also have separately caused” some of the client’s losses, Portal should nonetheless be responsible for 100% of the loss.
Failed firms
It’s still only the first month of the year – but 2023 is starting to get a reputation for the year of failed firms.
There have now been 10 companies declared failed since 9 January 2023.
The firms in question are Aquila Financial Services, Vintage Investment Services, Broadgate Financial Management, Braemar Wealth Management (NW), Better Retirement Group, Plan Your Retirement Limited, Midhurst Asset Management, Nurture Financial Planning and Cadogan Asset Management.
