Portal Financial Services LLP has been declared in default with nearly 300 claims of poor advice against it.
The Birmingham-based firm, formerly called Portafina LLP, entered compulsory liquidation on January 18 this year.
The Financial Services Compensation Scheme (FSCS) declared the company as failed today (March 16).
There are currently 291 claims against the firm, two of which have been rejected, one successfully upheld, and the remainder are still being processed.
The majority of the claims are related to pension transfer advice, with a small number related to the British Steel Pension Scheme.
In July last year, the FSCS said it had been monitoring Portal, which at that point had applied to the Financial Conduct Authority to have its permissions struck off and was not accepting new business.
In the year before, from July to December 2021, the Fos had recorded an uphold rate of 95 per cent for complaints against Portal.
According to Companies House, Portal’s last accounts were for the year to March 31, 2020. Its March 31, 2021 accounts are overdue.
Accounts from three years ago show gross profit falling from £4.5mn in 2019 to £1.7mn in 2020 and turnover falling from £7mn to £1.7mn.
The BSPS case
During 2017, BSPS members were asked to make decisions about their pensions as part of a restructure of the scheme.
About 8,000 members transferred out of the scheme, with transfers collectively worth about £2.8bn.
But concerns about the suitability of the transfers were soon raised, leading to an intervention from the Financial Conduct Authority that resulted in a number of advice firms – key players in the debacle – stopping their transfer advice service, while others went out of business.
The debacle created a mountain of liabilities, which lawyers believe could end up costing the industry up to £300mn.
The FCA announced last year that it plans to deliver £71.2mn in compensation to former members of the scheme who received unsuitable advice.
The scheme covers those who transferred out between May 26, 2016 and March 29, 2018.
However, last month a number of steelworkers wrote to the FCA expressing concerns about the regulator’s calculations for the scheme.
sally.hickey@ft.com
