Regulation  

Advice firm enters liquidation after FCA asset restriction

Advice firm enters liquidation after FCA asset restriction
Jennifer West/Bloomberg

An advice firm has entered liquidation following restrictions placed on it by the Financial Conduct Authority to prevent it from disposing of assets.

Alexander David Securities entered voluntary liquidation on July 1. After stopping the firm from disposing of assets without its approval due to unpaid compensation, the FCA said it “remained concerned” that the firm was not able to meet its debts as they fell due. 

The director’s powers have now ceased, passing over control to joint liquidators at BDO.

The company is still authorised by the FCA and will remain subject to supervisory oversight.

The Financial Ombudsman Service has upheld complaints that the firm's advice was unsuitable and transfers were not in the customers’ best interests. 

In May, the City watchdog said it was acting so that money was available to pay compensation owed by Alexander David Securities, including unpaid redress awarded by the Fos.

On BDO’s website, the liquidators said they will be contacting the Fos to determine what further action needs to be taken in respect of these claims.

As the firm is in liquidation the ombudsman service will contact clients to ask for permission to refer the case to the Financial Services Compensation Scheme (FSCS), acccording to the FCA.

The company had permission to hold and control client money until June 29, 2020, following FCA intervention.

It had provided regulated activities through a number of appointed representatives, including Beer & Young, OS Wealth Management, St. Pauls Marketing Limited and Templeton Securities Limited.

The last two provided investment advice, and recommended clients transfer their pensions into self-invested personal pensions and to invest those funds into mini-bonds, the regulator said.

Costs associated with distributing client money back to clients, including the joint liquidator’s fees, will be deducted from the client money.

Though the liquidators will be liaising with the Financial Services Compensation Scheme to determine the company’s position and what cover may be available. “Further updates will be provided in due course,” BDO said on its website.

ruby.hinchliffe@ft.com