It’s been reported that Vintage Investments Services have proposed a partnership voluntary arrangement. The firm is on the brink of collapse after it fell into trouble over mounting pension transfer claims relating to the British Steel Pension Scheme.
Steven Hodgson and Paul Adams, the senior partners in the Stockton-on-Tees-based Vintage Investment Services have asked creditors to approve a partnership voluntary arrangement (PVA) that will allow the business to be sold as a going concern rather than be wound up completely.
If the arrangement is agreed some of the proceeds from the sale will be passed to the Financial Services Compensation Scheme (FSCS) to pay compensation.
According to reports the FCA is aware of the PVA proposal and has not objected. New guidance which has been published today suggests that PVA deals could become more common when advice firms wind up as the regulator looks to ensure some of the proceeds from asset sales are directed to the FSCS and subsidising in part the compensation fund.
A document setting out the terms of the PVA reveals an unnamed consolidator is looking to buy Vintage and its Teeside hub in a deal worth an initial £800,000, with another £800,000 potentially to be paid out based on performance. Any sale proceeds will only go to creditors and not the firm’s shareholders.
The agreement is designed to achieve some sort of payment towards creditors like the FSCS and thus reduce the burden on all advisers who pay towards the FSCS levy. According to the PVA, a sale worth £800,000 would deliver the FSCS 24.42p for every £1 owed.
The value of any claims above what the FSCS recovers from this PVA sale would come from the normal FSCS levy pool.
A virtual meeting will be held on 5 July and the proposal will need to be signed off by over 75% of creditors to come into effect.
Why is the firm under investigation by the FCA?
In 2017 Vintage Investment Services highlighted difficulties when by the FCA to voluntary give up its defined benefit transfer advice permissions following a regulatory visit. The firm had advised several members of the British Steel Pension Scheme (BSPS).
It was reported that the regulator had found 11 unsuitable pension transfer cases when it had looked through the client’s files.
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