Having ceased to trade on 2 August 2021, the Swansea-based firm of independent financial advisors, A.W. Dallas Financial Services Limited (“AW Dallas”) t/a Portfolio Pensions Consultancy, will be wound down and placed into liquidation in the coming days.
John Cullen, Partner at accountancy firm, Menzies LLP, was instructed by the directors of AW Dallas to assist with placing the company into creditors’ voluntary liquidation on 5 August 2021 and provided notice of this intention to shareholders and creditors earlier today, 23 August 2021.
Principally as a result of advice given to British Steel pension scheme members in relation to their defined benefit pensions, AW Dallas has been the subject of complaints in respect of advice provided to clients between August 2017 and February 2018. Several of these complaints have resulted in referrals to the Financial Ombudsman Service (“FOS”), and it is thought the total liability in respect of these complaints could exceed hundreds of thousands of pounds if upheld.
The volume of complaints and subsequent FOS referrals made against AW Dallas has rendered the business insolvent.
Initially, the firm’s directors and their advisors at Menzies LLP had hoped that the business and assets would be sold through a pre-packaged sale and administration of the company to an associated business. However, while an offer was made for the business and assets which would have benefited creditors, the Financial Conduct Authority (“FCA”) opposed the sale due to it being received from a firm which is connected to the directors of AW Dallas, the directors and senior managers of both firms being the same. The FCA did not believe it appropriate for the directors to continue to benefit from customers that were potentially mis-advised by AW Dallas, and whose redress liabilities would likely be left to the FSCS.
The firm’s offer was the largest in monetary value but the FCA considered the outcome to creditors was not materially better given the scale of liabilities and expected costs. Offers have been made for the customer list by other unconnected parties, but these are of a lower value and the directors and Menzies LLP have concluded that they are insufficient to warrant placing the company into administration. Accordingly, the decision was made to place the company into liquidation.
John Cullen, Partner at accountancy firm, Menzies LLP, said:
“We had hoped to sell the business and assets of the company for a certain sum, and in so doing allow the business to continue operating. This has not been possible however, and despite owning a client list of more than 200 client accounts, the directors have been left with no other option but to instruct Menzies LLP to assist with placing the company into liquidation with immediate effect. We hope to complete a sale of the customer list to a third party shortly, but regrettably the value generated will not be significant.”
Explaining the background to the liquidation, John Cullen added: “The directors of A.W. Dallas Financial Services Limited came to us for insolvency advice because of the mounting number of claims the firm was facing, nearly a quarter of the client book. The excess payable on its professional indemnity insurance liability in respect of these claims, which represents about £30,000 per claim, could not be met”.
“Any individuals seeking redress from A.W. Dallas Financial Services Limited should refer their claims to the Financial Services Compensation Scheme, which is able to guarantee payment up to a value of £85,000.”
Frequently asked questions for clients of AW Dallas can be found on the following webpage:
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