Financial Services Compensation Scheme  

FSCS ‘prepared to step in’ on advice firm facing claims

FSCS ‘prepared to step in’ on advice firm facing claims
Don Stelmaszek/Pixabay

The Financial Services Compensation Scheme has said it is “prepared to step in and pay claims” if an advice firm facing 190 claims becomes insolvent and is unable to meet the claims itself.

The FSCS told FTAdviser its resolution team was monitoring pensions advice firm Portal Financial Services LLP and liaising with the Financial Conduct Authority.

Usually the FSCS only steps in when a firm becomes insolvent and is unable to pay claims.

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Portal has been asked whether it is able to pay the current 190 claims against it with the Financial Ombudsman Service but is yet to respond to requests for comment.

The firm is authorised by the FCA, although it has applied to have its permissions struck off and is currently not accepting new business.

An FSCS spokesperson said: “They [resolution team] have confirmed we are monitoring the firm and liaising with the FCA to ensure we are prepared to step in and pay claims if Portal does become insolvent and is unable to meet claims itself.”

As reported by FTAdviser last week, Companies House documents show the company has not yet filed its report and accounts which were due in December last year.

The ombudsman has said "virtually all" the complaints against Portal are defined benefit transfer related.

In its most recently published data, covering July to December 2021, the Fos recorded an uphold rate of 95 per cent for complaints against Portal.

While data for January to June 2022 is yet to be published, a Fos spokesperson told FTAdviser on Friday (July 15): “[We] expect the uphold rate to continue to be very high for that company.”

The last accounts filed for the company are for the year to March 31, 2020.

These show gross profit falling from £4.5mn in 2019 to £1.7mn in 2020 and turnover falling from £7mn to £1.7mn.

Administrative expenses have also dropped, from £4.1mn to £1.4mn, with operating profit rising slightly from £325,000 to £338,000.