Harwood Wealth Management confirmed that its subsidiary Network Direct was placed into administration on 23 November.
The firm said that it was due to the “impact of a combination of the continued weakness in investment markets, together with the ever-mounting cost” of securing professional indemnity (PI) insurance.
But Harwood also revealed that Lyncombe Consultants Limited (Lyncombe), an IFA network and part of Adviser Services Holdings Limited (ASHL), is acquiring the business and part of the assets of Network Direct out of administration.
The financial terms of the deal were not disclosed.
A spokesperson for Harwood Wealth Management said: “We are pleased to have agreed this deal with ASHL, ensuring that the advisers and their clients can continue their successful relationships going forward.”
ASHL said it has acquired the “future trade” of Network Direct to provide its 100 advisers, staff and clients “with a pragmatic solution that delivers continuity for everyone”.
This will include support on “income novation” and “re-authorisation”.
In 2020, ASHL acquired Lyncombe Consultants for an undisclosed fee, as well as Cheshire-based Sense Network for £9.35m ($12.29m, €10.4m).
ASHL is building a group of companies providing complementary services to financial advisers.
‘More than cogs in a wheel’
Michael Couzens, chief executive of ASHL said: “The fact that Harwood have chosen to place Network Direct into administration is not a reflection on the quality or professionalism of the advisers and staff. We believe Network Direct is full of highly professional advisers who want to provide an excellent service to clients.
“ASHL have a vastly experienced and successful leadership team who have worked with independent advisers in networks over many years. We created ASHL because we felt there was a need for a more personal, hands-on network where advisers were simply more than cogs in a wheel.
“Because we are network-focused and with our history, we are a natural home for professional, independent advisers.”