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By Simoney Girard and Nick Reeve | Published Jul 03, 2012

Honister Capital Limited in administration

The news came six months after its chief executive Richard Pearson quit after less than a year at the helm of the company, to take what was seen at the time as a backwards step in terms of job title, joining Positive Solutions as chief operating officer.

Mr Pearson had become chief exec of Honister in March 2011, after Mark Lund announced his departure.

Mr Lund had built up the advisory business since launch in 2009, which comprised Sage Financial Services, Burns Anderson and Honister Partners. The administration does not include the execution-only broker side of Honister Partners, Willis Owen, but does include Sage, Burns Anderson and Honister Partners.

There are questions as to why it has been put into administration, given that it had produced strong reports and accounts. One suggestion relates to a lack of appropriate professional indemnity cover, but a spokesman would not confirm this before the official administration notice is sent out.

In 2011, Honister Capital’s first set of consolidated accounts since its inception in June 2009 showed strong growth. In the period up to 30 September 2010 the group of companies produced revenues of £145.5m, generating an operating profit of £5.2m.

Of the group revenues, £141.5m came from the advice businesses Burns Anderson, Sage and Honister Partners, creating £2m of operating profit. The direct-to-customer business Willis Owen made £3.1m of operating profit from £3.9m of revenue.

At 30 September 2010 Honister said the group was holding £2.9m of regulatory capital, as required by the FSA, reflected in the overall cash balance of £11.2m.

A spokesman for Grant Thornton, the administrators, said the administration not yet taken effect but was due to happen today.

A spokesman for Willis Owen said: “Willis Owen and its clients are unaffected by an entirely separate part of the overall Honister Capital Holdings business being placed into administration.

“We are a directly authorised and regulated business with the FSA and will continue to operate as normal. We can assure investors that trading continues as normal over the Willis Owen platform.

“Willis Owen remains a profitable and successful business providing an excellent service to its loyal investors. There are plans in place to develop the existing investment offering to clients. These plans will not be affected by the announcement as we continue to invest in and grow the business.”

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