Financial advisory business deVere and Partners (UK) recorded a loss of £1.2m ($1.5m, €1.3m) for the year to 31 December 2017, up from a loss of £864,714 in 2016, as a result of an ongoing FCA investigation into its DB pension transfers.
Documents released on Companies House on 10 August show that gross profit for 2017 fell to £2.15m from £3.1m the previous year, “primarily as a result of a decision to discontinue the pension report writing service”.
“The company incurred significant costs in respect of an ongoing FCA investigation into a discrete area of work the business was undertaking and no longer carries out,” the strategic report stated.
Section 166 skilled person review
In February 2017, the FCA ordered deVere UK to “immediately cease” providing third-party companies with transfer value analysis (Tvas) reports or other similar reports of information “designed to assist third parties companies in transferring customer DB pensions to an alternative arrangement”.
At the time, a deVere spokesperson said the company had “entered into a voluntary requirement to cease providing advice in this area” and was working “alongside the FCA’s appointed independent body through the section 166”.
The strategic report has now confirmed that KPMG was the company appointed and that its report was finalised during 2017 and deVere has implemented the recommendations.
However, in January 2018, deVere was advised by the FCA that its investigation into a discrete area of the business would continue.
It is not clear if the discrete area refers to DB pension transfers or another type of business.
International Adviser contacted deVere for clarification, but no response was received ahead of publication.
Historic client compensation claims
As part of its annual losses, deVere stated that it has chosen to write down the carrying value of its investments held in unregulated investments.
“These investments arose solely as a result of settling historic client compensation claims,” the firm said.
No further details were provided.
Staff and costs
The number of advisers working for deVere in the UK dropped to a monthly average of 12 from an average of 19 in 2016.
In total, staff numbers fell to 35 in 2017 from 41 the previous year.
Director remuneration dropped by more than half to £320,835 last year, down from £812,833 in 2016.
This could be explained by the churn at director level. During the course of 2017, two directors were appointed on 27 January but resigned in March and July.
One director resigned in February 2017, while another was appointed in March.
At the end of 2017, deVere UK had three directors: Mitchel Hopkinson, Nigel Smith and Richard Withers.
The ultimate controlling party of deVere is listed as Mr N Green.