Sussex advice firm being wound up following SVS Securities British Steel debacle

Hannah Godfrey reports...

East Sussex-based Fiducia Wealth Solutions, which is understood to have worked with steelworkers and collapsed DFM SVS Securities, has been instructed to cease all regulated activity and is in the process of being wound up, Professional Adviser can reveal.

According to a note on the FCA register, Fiducia must cease all regulated activity and must not recommence any regulated activities unless it has the Financial Conduct Authority’s (FCA) prior written consent.

The firm must also cease to act for any affected clients and contact product providers to instruct them to put on hold all transactions related to the firm’s regulated activity that has not yet completed.

Elsewhere, the note on the register said the firm must not take any action that has, or may have, the effect of disposing of, dealing with or diminishing the value of any assets without the FCA’s prior written consent.

Additionally, it must not dispose of, sell or transfer whole or parts of its client bank unless it has the FCA’s written consent.

Pension transfer confusion

PA understands Fiducia worked with collapsed discretionary fund manager (DFM) SVS Securities, which entered administration in August 2019.

According to the FCA, SVS Securities encouraged advisers to promote risky portfolios to clients moving from defined benefit (DB) pensions. PA also understands Fiducia worked with steelworkers who transferred out of the British Steel Pension Scheme.

Echelon Wealthcare managing director Alastair Rush, who has worked closely with the steelworkers since the British Steel saga, has alleged some steelworkers had some of their investments placed into obscure investments through Fiducia via SVS Securities. Portfolios at the DFM contained various bond funds, some of which held the likes of Botswana Diamonds PLC, a business that handles diamond exploration and development activities in Zimbabwe.

Rush said: “I spoke with a steelworker in November about this. His shoulders slumped, he was unable to speak and his eyes welled up. These are the unseen and silent victims of industrially applied bad financial advice.

“He felt ashamed that he had jeopardised his retirement and of his family by being so trusting and going from the certainty of their DB scheme into the speculation of some of the SVS investments – beggars belief. The transfer was an absurdity anyway, and into something like this is incompetent – and that’s being polite.”

Though Fiducia worked directly with clients, advice firm Better Retirement Group provided what it described as “specialist DB transfer services” to Fiducia clients. The firm has since stopped advising on pension transfer business following issues with PI insurance renewal.

Better Retirement Group director and owner Stuart Bayliss told PA: “We provided DB transfer specialist services for clients of Fiducia for a period of time, and our role was to Fiducia – we weren’t advisers to the individual clients and therefore didn’t have a role in the underlying investments, although we did to ensure underlying investments that were made to Fiducia matched the assumptions of investments that had been made in the calculation based on the client’s indicated attitude to risk and capacity for loss.”

Bayliss said his firm stopped advising on DB transfers back in August, but will seek to re-enter the market when the firm’s insurance is up for renewal in March.

He explained: “We do have a voluntary requirement (VREQ). It came into place as a result of the fact that we were self-insuring though in-house capital our PI liability for DB from March and the regulator changed their policy on this – that retain capital could only be used for old business rather than new business. Therefore we ceased advising new DB transfers as of August, and this was confirmed in a formal VREQ on 24 October.”

Caretaker director appointed

According to Fiducia’s Companies House page, Philip Stone was appointed as a director at the firm on 18 November 2019. Then, on 30 November, long-term director Kevin Kempthorne, who had been at the firm since August 2014, resigned as director.

Stone is also owner of Phil Stone Insolvency Consultancy, and confirmed to Professional Adviser he had been appointed by the firm’s shareholders as a caretaker director to wind the company up in an “orderly fashion”.

Stone disputed Bayliss’s recollection of events and claimed Better Retirement Group provided “all” pension transfer advice. He also suggested both the transfer advice and investment advice was provided by Bayliss’s firm and not Fiducia. He also claimed Fiducia “never provided any advice to any BSPS members”.

On 25 November, Stone wrote to the FCA to confirm Kempthorne had resigned and that the firm had ceased trading.