Honister Capital, which includes advisory firms Burns Anderson, Sage Financial and Honister Partners and its subsidiary, B-A Financial Ltd, last week went into administration after it failed to secure professional indemnity insurance.
Honister Capital has over 900 self-employed financial advisers across the brands and 190 back office staff. Grant Thornton has been appointed administrator for the group.
In a note sent to advisers last Tuesday, chief executive Colman Moher told advisers they were no longer able to write new business, with immediate effect.
Honister Capital Holdings will continue to operate direct-to-consumer business Willis Owen, which will not be affected by the move.
In the note, Moher says: “Due to the history of some of our businesses, we have been exposed to large claims relating to business written by advisers who have long since left us and this has severely affected the premiums we have had to pay. The extent of policy excesses and exclusions has compounded this.
“It is with great regret that we have to inform you that we have been unable to obtain PII cover for the coming year, which means Honister Capital Ltd and its subsidiaries will be unable to trade from today. The business has had no choice but to enter into administration and consequently you are no longer able to write new business with immediate effect.”
Honister Capital was formed in June 2009, when it acquired the principal advisory and direct businesses of The Money Portal Ltd in a move that saw the rest of The Money Portal, including national IFA Bates, go into administration with debts of £55m.
The Money Portal acquired execution-only business Willis Owen and national IFA Bates Investment Services in 2003 and Berkley Berry Birch subsidiary Weston Financial Planning in March 2006, as BBB went into administration.