An advice firm thought to be involved in the British Steel saga and suspended by the financial regulator has been bought by a Swansea-based wealth manager.
Earlier this year S & M Hughes Limited, which trades as Crescent Financial, was told to cease all regulated activities by the Financial Conduct Authority, effective from May 31, and in June FTAdviser reported several steelworkers had enlisted the help of the adviser to transfer out of the British Steel Pension Scheme.
In a statement yesterday (July 24) Swansea-based Portfolio Financial Consultancy announced it is to acquire Crescent Financial, following S&M Hughes "voluntarily" relinquishing its regulatory permissions and apparently making an approach to the wealth manager.
Portfolio Financial Consultancy said it had been in discussions with the FCA which approved the wealth manager's bid to take on Crescent's clients.
In its statement the wealth manager said it "wishes to make clear" that Crescent's directors and shareholders would not benefit financially from the transaction and funds received are expected to be set aside for former clients and "potential creditors".
Portfolio Financial Consultancy serves south and west Wales with six advisers and an additional 12 support staff.
The company said the acquisition would benefit Crescent's clients with "continuity of advice and level of service".
Members of the BSPS were asked to decide what to do with their pensions as part of a restructuring process in 2017.
As a result about 8,000 members transferred out of the old scheme by October last year, with transfers collectively worth about £2.8bn.
But concerns about the suitability of the transfers were soon raised leading to an intervention from the FCA, which resulted in 10 firms - the key players in the debacle - stopping their transfer advice service.
Speaking with FTAdviser last month Alastair Rush, principal at Echelon Wealthcare, who has been involved in helping steelworkers with their pension decisions, said he has seen advice suitability reports from Crescent that referred to death benefits and flexibility, and distrust of Tata Steel, which he thought were "not enough to justify a transfer and more likely not when the client is in his thirties or forties".
rachel.addison@ft.com
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