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Isa provider suspends client access after platform collapse

Isa provider suspends client access after platform collapse

Isa provider Willis Owen has halted client’s access to their investments as a direct result of the collapse of the Avalon platform.

Jason Chapman, managing director at Willis Owen, said Avalon provided its Isa plan manager administration functions and also the Sipp administration processes.

“Just over 800 of our customers are currently unable to access our platform. We are working hard to bring our services back online as soon as possible, and apologise for any inconvenience this may cause. We will keep customers informed.”

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In February this year, the Financial Services Compensation Scheme was working with the administrators of Avalon Investment Services.

The Sipp administrator went into administration on 22 February and the Financial Services Compensation Scheme said at that time it was working to understand what the firm’s insolvency might mean for its customers.

On 26 February, Embark Group, the parent company of Hornbuckle, took over self-investment pension administrator Avalon Investment Services.

Following the deal, Embark Group will set up a new entity, Embark Investment Services, which will be the regulated entity which has instant savings account permissions.

As such, Embark Group will use the acquisition to bring Isa and nominee capability to the group.

However, trading will continue under the name Avalon, Mike Douglas, head of propositions at Embark Group, told FTAdviser at that time.

Mr Chapman added in a statement today (8 March): “Hornbuckle Mitchell (part of the Embark Group) has purchased the assets of Avalon and are going to run Avalon with the existing team in place. This change will not affect customer investments in any way.”

Antony Devine, independent financial adviser at Devine Financial Management, said this is a good example of why you should not invest with “such a minor platform.”

He said: “Willis Owen, which is the surviving ‘gem’ of the former Honister Capital group which went into administration in summer 2012, is a very small company in terms of an investment retailer, and has historically been reliant on contracts with third parties like Avalon to be able to supply its services to customers.

“There isn’t any real risk to customers losing any of their holdings from the Avalon situation, as the custodians have that squared away in the normal fashion, but being unable to allow customers to trade on their accounts, with no indication as to how long this might persist, at this time of significant market instability is a very serious matter.”

He added if he were a customer of Willis Owen he would be taking a closer look at the company, especially in terms of its financial strength and infrastructure, and probably wouldn’t be thinking of staying there after this is sorted out.

ruth.gillbe@ft.com