Liberty to retain liabilities following Embark merger

Liberty to retain liabilities following Embark merger

Embark has completed the purchase of assets of Liberty Sipp via its subsidiary business EBS Pensions Limited.

The acquisition brings together £6.8bn worth of assets under administration and a combined book of 32,000 self-invested personal pension (Sipp) clients.

The transaction brings the total number of Sipp schemes under the Embark group to about 56,000 with 140,000 consumer clients and total group assets under administration of about £15bn.

Embark will place £2m of additional regulatory capital into EBS to support the growth of the business and give Liberty financial support throughout the wind up of the business. 

Following the purchase, the transferring Liberty products will be re-branded although they will be maintained on the current terms and conditions, operated by EBS.  

The purchase of Liberty comes after Embark said it would be looking to make acquisitions ahead of its IPO in 2020

Phil Smith, CEO of the Embark Group, said: "This transaction, at this time, provides protection for the consumer clients of Liberty. 

"It is also positive for the employees of both businesses and will further improve the growth trajectory for wider stakeholders of the Embark Group.

"The ex-Liberty team, their clients and distribution partners will thrive with the supportive financial strength, scale, and technology resources of the Embark Group."

Following the transaction, Liberty Sipp will retain its liabilities and will pay out using the assets that it currently holds.

Earlier this year (8 August) it was reported the Financial Ombudsman (Fos) had received just over 500 complaints about Liberty from clients who had allegedly lost money after making investments.  

The total value of the complaints was estimated to be £18m by law firm Anthony Phillip James & Co (AJP), which pushed for the firm to compensate its clients.  

The complaints relate to historic business and Liberty has already reduced its exposure to unregulated investment schemes to 4 per cent of its book.

John Fox, managing director of Liberty, said: "The timing and cultural fit of this transaction is excellent for all of us at Liberty.

 "We are moving from being one of the fastest growing small players in the Sipp market, to driving the continued growth of one of the largest sector players.

"We have many complementary strengths and capabilities but share a clear passion for consumer outcomes and service. We look forward with excitement, in what has been a challenging period for the Sipp market."

In its recent financial results, Embark Group reported its total assets under administration had increased 42 per cent to £11.5bn during 2017, as the group edged closer towards listing on the stock exchange in the coming 18 months.

The merged business will be headquartered within the Embark Group in Greater Manchester, with a satellite operation in London.

Ivor Harper, director at Park Financial, said: "Liberty retaining its assets is all well and good, unless it finds that the redress exceeds, at some point, its assets. What then? FSCS will have to step in, I assume.