FSCS declares former IFG subsidiary in default

FSCS declares former IFG subsidiary in default

The Financial Services Compensation Scheme has declared IFG Financial Services Limited in default after one pension transfer advice claim was upheld against it.

The subsidiary, previously called IFG Life & Pensions Limited and trading as Goldstone Financial Service, was once part of IFG Group. 

The FSCS told FTAdviser there were five claims against the firm, but only one was upheld. This relates to pension transfer advice.

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“The single valid claim is what has triggered the firm to be declared in default,” an FSCS spokesperson said. The claim is now in the final calculation stage for payment.

An application to dissolve the company was filed on August 15, 2019, before IFG Group was sold on to private equity. It was then dissolved via a voluntary strike-off in December 2019.

In IFG Financial Services Limited's last full accounts on Companies House, it says the business made a profit of just £1,119 in 2018 after posting a loss of £52,276 in 2017.

It put the loss in 2017 down to the reversal of an accrual for commission due on an IFA which was paid in 2016.

When the company was dissolved in 2019, IFG Financial Services Limited's total assets were £2.6mn and total provisions were £113,673.

It said the provisions covered legal expenses “relating to the sale of business, which completed in 2014”. It estimated £43,544 of the provisions would be used in 2019. 

Until 2014, IFG Financial Services Limited operated four offices across the UK. But in September of that year, the business and assets were sold to Ascot Lloyd, according to Companies House.

After this, filings say it became an investment holding company. Claims with the FSCS are against the investment holding company IFG Financial Services Limited, and not against the part of the business sold to Ascot Lloyd.