Protection advice firm Eunisure has entered liquidation after recording a £2mn loss last year.
The firm, which was acquired by AFH for £4.5mn in 2017, entered liquidation last week.
Butcher Woods was appointed as the firm’s liquidator, according to a notice published by the Financial Conduct Authority today (July 11).
Eunisure advised on life insurance, critical illness and income protection, employing some 42 people.
According to the FCA, existing policies remain in place meaning clients should continue to make payments as usual. However, the firm is no longer able to broker any new policies.
In the year to October 31, 2021, audited accounts on Companies House show the company made a £2.3mn loss after making a £4mn profit the year before.
Administration expenses increased by £1.3mn that year, while gross profit fell from £6.5mn to £199,000.
Currently, the Financial Ombudsman Service has fewer than 10 open cases against this firm and has resolved fewer than 10 cases against it this calendar year.
Eunisure had national coverage throughout the UK and AFH had hoped to “significantly increase” the distribution capacity of its business.
In its accounts, published in April, Eunisure’s directors said: “Even in the event of falling markets and without further growth the group can continue to trade profitably and maintains sufficient facilities to cover its short and long-term liabilities.”
They added that this assessment has been stress tested for “lower than anticipated revenues”.
According to its latest accounts, Eunisure overstated its earnings by £114,488 in 2020, leading it to reinstate them in its most recent filing.
When AFH bought Eunisure in 2017, it paid £1.5mn from its own cash resources, holding back up to £3mn which was set aside to be paid over a 48-month period in four tranches.
This second payment was dependent upon set performance criteria of Eunisure being met in each 12-month period.
Prior to its acquisition, in 2016 one of Eunisure’s advisers conned the business out of £8,000 by claiming commission for insurance policies he had made up.
When he did not pay back the money a criminal investigation ensued, after which the broker was sentenced to nine months imprisonment and ordered to carry out 90 hours of unpaid work.
FTAdviser has approached AFH and Butcher Woods for comment.