Origen Financial Services is subject to a ‘skilled person review’ due to fund recommendations made to a number of defined benefit scheme members who were part of a previous enhanced transfer value exercise.
The national advice group, which is owned by Aegon, has estimated a cost of £204,000 for the review, according to its accounts for the year ending 31 December 2014.
The company was informed of the Financial Conduct Authority’s plans to review the fund recommendations in January 2015.
The section 166 reviews cover a range of areas and often involve lengthy and complex investigations, delving into past business and current operations of firms.
Origen’s accounts read: “Whilst the directors do not anticipate any redress as a result costs as a result of this review, it is not possible to predict the value or probability of any such additional costs arising until the review is complete.”
The document also revealed that the company made a pre-tax loss of £1.1m in 2014, compared to a pre-tax loss of £5.6m in 2013.
In August 2013, the FCA rejected criticism of its use of controversial ‘skilled person’ reports, which require firms to pay for a review into their own practices, after receiving a number of complaints from the industry in response to a transparency paper published in March the same year.
Feedback revealed that the industry wanted to know more about the FCA’s use of the reviews, in particular how the it decides to commission a review and the evidence used in making this decision, as well as the outcomes of investigations.
Earlier this year, it was revealed that the FCA’s skilled persons review regime may not be cost-effective. According to data from a City law firm, only 2 per cent of such reviews last year led to enforcement action.
Reynolds Porter Chamberlain said this was half the rate for the previous year (to 30 September 2013), with partner and regulatory specialist Richard Burger stating that this could mean the reviews were not cost-effective.
ruth.gillbe@ft.com
