Proposed Creditors’ Voluntary Liquidation
Why did the Directors decide to place the Company into Liquidation?
The Directors took the decision to place the Company into Liquidation because of the mounting number of complaints it was facing regarding advice provided to British Steel pension scheme members in relation to their defined benefit pension transfers between August 2017 and February 2018. The subsequent claims being made against the Company rendered the business unviable.
Further to the above, the excess payable on the Professional Indemnity insurance (“PI”) in respect of these claims, which represents approximately £30,000 per claim, could not be met by the Company. The Company’s PI cover expired on 2 August 2021 after which the Company was unable to continue to trade and exercise its permissions from the Financial Conduct Authority (“FCA”).
What is a Liquidation?
A Liquidation is a formal insolvency process designed to bring the activities of an insolvent company to an end. The Liquidation is being handled by the appointed Liquidators. In this instance, the Joint Liquidators are John Dean Cullen and Rachel Helen Lai of Menzies LLP.
The Liquidators have a duty to bring in the assets of the Company and realise them for the benefit of creditors as a whole. They are also required to investigate the reasons for the Company’s failure and report on the conduct of the directors.
I am a client of the Company. What should I do now?
Prior to being placed into Liquidation the Company was looking to sell the client book to an unconnected third party, in order to avoid having a number of orphaned clients. However, the sale was not finalised prior to the Liquidation, therefore, the Liquidations are now considering the position in respect of the sale. The Liquidators will not transfer any client data that they are not entitled to transfer, and they are liaising with the FCA in respect of any proposed sale.
It is up to you whether or not you engage with any purchaser and new client agreements will be issued. All client agreements have become void upon the Company ceasing to trade and being placed into Liquidation.
I am a client of the Company. What happens to my pension?
Your pension fund remains with the relevant provider (e.g., Aegon, Prudential, Quilter, etc.), and is not affected by the Liquidation other than the matter of no longer receiving ongoing advice from the Company as your pensions advisor. The Company has ceased to trade and is no longer able to advise you in respect of your pension fund. You will need to discuss this matter with the pension provider directly, or with any newly appointed financial advisor. If you require any advice in the interim, you should seek your own financial advice.
I am unsure who my client agreement is with?
Please note, the Company’s parent company, Portfolio Financial Consultancy Ltd t/a Portfolio Wealth Management, is not affected by the Liquidation of the Company. These are two separate registered entities. The parent company, Portfolio Wealth Management, is still trading and clients of Portfolio Wealth Management are unaffected by the Liquidation. If you have any uncertainty around which company your client agreement is with, you should check your client agreement urgently.
I believe I received unsuitable advice regarding my defined benefit pension transfer. What should I do now?
It has come to our attention that the Company might have provided its clients with unsuitable advice in respect of their defined benefit pension transfers. You have a right to complain to the Company. However, as the Company has been placed into Liquidation and declared in default, the steps you need to follow if you have a complaint have changed.
If you believe the advice you received from the Company may have been unsuitable you should consider making a claim. The FCA have produced an advice checker that is simple to use and will assist you in determining whether the advice you received was suitable and of good quality. This can be found here:
https://www.fca.org.uk/consumers/pension-transfer-defined-benefit/advice-checker.
As the Company is in Liquidation, if you determine that the advice you received was unsuitable, you can make a claim with the Financial Services Compensation Scheme (“FSCS”).
Claims can be made through the website:
https://claims.fscs.org.uk/Guidance.
The FSCS can also be contacted on 0800 678 1100 or by writing to:
Financial Services Compensation Scheme
PO Box 300
Mitcheldean
GL17 1DY
Contact made via the website may receive a faster response.
The FSCS will investigate whether your claim meets the qualifying conditions for compensation. However, you should still make a claim to the FSCS for the losses you might have incurred as a result of advice given by the Company.
Who are the FSCS?
The FSCS protects consumers when financial services firms fail. It is the compensation scheme for customers of UK authorised financial services firms. It has eligibility criteria both in respect of the people and businesses who are covered. For eligible clients, the FSCS will cover custody assets and client money shortfalls up to £85,000 including the costs associated with their distribution back to clients.
The Liquidators are working with the FSCS in this matter and they have been notified of the Liquidation.
I have an ongoing complaint with the Financial Ombudsman Service (“FOS”) or am intending to make a new complaint, what happens to that?
If you already have a claim with FOS, you don’t need to take any action at the moment. As the Company has entered into Liquidation, the FOS will no longer assess complaints against it. The FOS will contact you shortly to ask permission to transfer your complaint to the FSCS. When the FSCS receives your file, it will contact you directly to ask you to submit your claim. There should be no need to submit all of the claim documents again.
Any new claims made following the company being placed into Liquidation should be directed to the FSCS in the first instance.
I am a client (or former client) of the Company. Am I a creditor of the Company?
You are a creditor of the Company if you are owed redress. In some cases, whether you do seek redress and for how much has yet to be determined. Clients of the Company who may be due redress are considered contingent creditors at the present time.
If I have a claim against the Company, what is the prospect of recovering my monies directly from the Liquidation estate?
Any claims against the Company from clients will rank as an unsecured creditors for the purpose of the Liquidation. The return of any monies will be dependent on the asset realisations and whether there will be sufficient monies to pay a dividend.
At present, it is uncertain whether a dividend will be paid to the unsecured creditors. The outcome for unsecured creditors will depend on the Liquidators’ investigations, the costs of the Liquidation and the total level of claims received in the estate.
If you believe you have a claim against the Company in respect of unsuitable advice, you are encouraged to make a claim with FSCS per the guidance above.
Do I need to use a claims management company?
You should proceed with caution if you are approached by a claims management company (“CMC”). For the vast majority of clients, there is no benefit in involving a third party in making a claim against the Company. The CMC is likely to seek a fee which may reduce what you get back.
If you are considering using a CMC to assist with the return of your assets, we suggest you discuss this with myself first using the contact details provided below.
All customers should remain alert to the possibility of fraud. If you are cold called by someone claiming to be from Menzies LLP, please end the call and call them back using the number below. Be cautious if you are approached by one of these companies. Any client who believes they have a complaint against the Company should contact the FSCS in the first instance.
Who and how should we contact if we require further information?
Email: AWDallas@menzies.co.uk or PElvin@menzies.co.uk
Telephone: 029 2049 5444 or 029 2067 4996
All documentation in respect of the Liquidation will be uploaded to the proposed Liquidators’ portal which can be accessed upon application to the Liquidator using the contact details above. These portal details have been circulated to all potential creditors upon to appointment of Liquidators.
Will the Liquidator be investigating the affairs of the Company?
The Joint Liquidators have a duty to consider the conduct of the directors of the Company and also to consider any areas requiring investigation with a view to making asset recoveries.
We should be pleased to receive from you any information that you have about the way that the Company’s business was conducted or potential asset recoveries that you consider will assist me. Please note that this request for information forms part of my usual investigation procedure.
I am unable to disclose any specific information with regard to these matters, as to do so may prejudice a successful outcome.
Will the FCA oversee the Liquidation?
The Company is still authorised by the FCA and remains subject to supervisory oversight and the FCA’s rules. John Dean Cullen and Rachel Helen Lai are authorised to act as licensed insolvency practitioners by the Insolvency Practitioners Association.
The Joint Liquidators are liaising closely with the FCA.
