DeVere UK has recorded a loss of over £1.2m for 2017 after incurring “significant costs” relating to an ongoing FCA investigation into its pension transfer practices.
Financial statements filed at Companies House revealed the company’s pre-tax losses increased from £864,700 in 2016 to £1.2m last year.
DeVere UK said in that filing that the growing losses were partly a result of an UK’s financial watchdog “investigation” into what it describes as “a discrete area of work the business was undertaking and no longer carries out” which led to “significant costs”.
In its statements deVere warned it may not be able to meet the costs of the FCA review over 2018 but said it has been provided with extra capital from its parent company to cover costs.
The company admitted that the review being carried out “will involve funding that the company is unable to meet from its forecast operating cashflows”.
It revealed that the business is currently reliant on financial support from its parent company and also raised concerns that “loss of key advisory staff could lead to a loss of income as clients withdraw their custom from the company’s service”.
In February 2017, the regulator launched a Section 166 review into the firm’s pension transfer practices which involves investigating aspects of a regulated firm’s activities if the FCA is “concerned or wants further analysis”.
As part of the agreement, deVere stopped providing reports to third party companies which assist them in transferring customers’ DB pensions.
As a result of stopping its pension report writing service, the firm’s turnover reduced from £3.08m in 2016 to £2.15m in 2017.
deVere Group increases its investment into the UK
The deVere Group’s UK Workplace Solutions Limited has received the green light from the FCA to finalise the acquisition of WPS Advisory Limited (WPSA), formerly trading as Priscum Direct.
“This latest group acquisition underscores deVere Group’s ongoing commitment to the UK and to investing in financial services firms that truly reflect a changing market, regulatory and legislative landscapes in Britain,” Nigel Green, deVere Group founder and chief executive, said in a statement.
Workplace Solutions was founded, with investment from deVere Group, in January 2015. Its mission was to bring a new approach in the way in which retirement advice was delivered in the UK.