DeVere UK is the British branch of a worldwide financial management group responsible for pension savings and planning, domestic and international mortgages, and various wealth management services. The firm bills itself as a visionary in long-term financial management solutions. However, the UK branch has been forced to rely on monetary assistance from its parent group to cover substantial losses for the 2017 business year.
Losses of up to £1.2 million were attributed to an investigation into the firm by the Financial Conduct Authority (FCA). A spokesperson for deVere UK claimed that the investigation regards:
“[A] discrete area of work the business was undertaking and no longer carries out.”
While the successful wealth manager is far from dire financial straits, this latest blow follows pre-tax losses of £864,700 in 2016. Uncertainty within deVere UK has led to a loss of key advisory staff, which is expected to have consequences for the company’s profitability in the future. Advisors working for deVere UK are braced for customers to “withdraw their custom from the company’s service”.
Outlining the FCA Investigation into deVere UK
In early 2017, the FCA issued a Section 166 (S166) into deVere UK’s activities in the pension transfer sector. Also known as a skilled person review, an S166 report is an independent review of a company’s business practices with regards to a specific area of concern.
In the case of deVere UK, the FCA wanted to review the firm’s activities regarding final salary pension transfer reports. After the report was implemented, deVere UK ceased providing transfer value analyses for third party organisations to perform final salary pension transfers. DeVere UK claims that stopping this activity has directly contributed to significant loss of revenue.
The Financial Ombudsman Service (FOS) has previously ruled against deVere UK in favour of pension transfer claimants who believe they were misled as to the value of their retirement savings. It is understood that pension compensation was not a significant factor in deVere UK’s loss of revenue however.
In recent months, the FCA has been prolific in altering the permissions of multiple financial product or service providers to reduce the likelihood of final salary pension transfer mis-selling. The loss that has hit deVere UK is indicative of a wider financial trend affecting most independent financial advisers (IFAs) and self-invested personal pension (SIPP) providers conducting final salary pension transfers.
Money and Me Claims: Final Salary Pension Transfers
At Money and Me Claims, we agree with the FCA’s stance that a final salary pension transfer is rarely suitable for retail customers. However, we understand the attraction of high cash-equivalent transfer values and high advertised rates of return.
If you believe you were mis-sold a final salary pension transfer following a report such as deVere UK provided, you may be entitled to compensation. Please do not hesitate to contact us to find out more.