UK-based advice firm Succession Wealth has put aside a pot of £10.4m ($12m, €11.9m) to cover any potential liabilities and compensation owed to clients who received defined benefit (DB) pension transfer advice.
The advice has “subsequently been deemed not to be in the client’s best interests”, the firm said in its full accounts to 31 December 2021, recently published on Companies House.
The company said that the advice in question was offered by an unnamed firm before it was acquired by Succession Wealth.
Succession Wealth has been “working closely with the Financial Conduct Authority (FCA) and independent third-party advisers to undertake a review and to compensate clients where necessary”.
A spokesperson for Succession Wealth told International Adviser: “This provision relates purely to advice given by a firm prior to its acquisition by Succession and we have been working closely with the FCA on the matter.”
Calculations
In the full accounts, the firm said that all case reviews have been completed and are now being examined by third-party file reviewers to determine whether, in each case, the advice given was in the client’s best interests.
Succession said: “Where the conclusion of that review is that the advice was not in the client’s best interest, then compensation is being calculated independently by a firm of consulting actuaries.”
The advice firm added that compensation calculations are still in the early stages, and as such, its management has set aside a provision based on modelling of potential redress costs by a third-party firm of consulting actuaries.
According to Succession directors, and based on the actuaries’ estimates, the actual range of outcomes will be between £9m and £11m.
IA contacted the FCA to understand its work with Succession Wealth, but the regulator does not comment on individual firms. IA also reached out to Aviva after it acquired Succession Wealth for £385m in 2022, but the insurance giant deferred commentary to the advice firm in this instance.
