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Wiltshire: £650m safeguarded for investors following appointment of Smith & Williamson

7 September 2016
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Thousands of investors have had their money protected after a self-invested personal pensions operator with client assets of around £650m became insolvent. The financial safeguarding work was carried out by Smith & Williamson following the collapse of Wiltshire-based European Pensions Management Ltd (EPML).

Recovery specialists from Smith & Williamson, the accountancy, investment management and tax group, were appointed joint special administrators and, in a tight timeframe, all of EPML’s existing 6,000 clients were moved to new self-invested personal pension (SIPP) and independent savings account (ISA) providers. This was done through three separate sales of the firm’s entire book of business.

Formed in 1998, EPML was a privately-owned independent SIPP operator with its registered office at Manor Farm, Chilmark, north west of Salisbury.

EPML was also an ISA plan manager, enabling members to consolidate tax-efficient savings. In addition it provided small self-administered schemes (SSAS) for independent trustees, commercial property investments and general investment accounts.

Greg Palfrey, who leads Smith & Williamson’s restructuring and recovery services team in the UK and works out of the South Coast office in Southampton, is one of the joint special administrators. He said: “This is a superb outcome for the 6,000 relieved clients of EPML after it filed for insolvency earlier this year. 

“All the funds, totalling £650m, have been safeguarded. We worked closely with the Financial Conduct Authority (FCA), the financial services regulator, to ensure the smooth sales, having first generated and handled expressions of interest from potential buyers.

“Furthermore, the special administration meant that we did not have to tread on the quicksand related to any primary pooling of client money.

“Primary pooling would have led to a protracted and costly process for creditors, bringing them further financial worry, because we would have had to first establish the claims that clients have in this pool to enable the distribution of funds to them.”

EPML administered around 5,000 SIPPs with around £630m of funds and its ISA business comprised around 800 ISAs of around £20m in value.

EPML’s SIPP and SSAS business was sold to Suffolk Life Pensions, part of the Curtis Banks Group.

The ISA business, where Saxo is party to the contract, was sold to Saxo Capital Markets, part of the Saxo Group, and the remainder of EPML's ISA business was sold to The Share Centre.

Smith & Williamson’s appointment as joint special administrator is reportedly only the 13th of its kind in the UK since the introduction of the Investment Bank Special Administration Regulations in 2011.

Crucially for creditors, the regulations allow special administrators to help speed up claims for assets rather than creditors having money tied up for years in red tape. 

Lessons learned from the collapse in September 2008 of Lehman Brothers, the global investment bank, which was the largest bankruptcy filing in US history, helped shape the regulations so the returns process for frustrated creditors could be made easier.

According to the FCA, there are approximately £2 trillion of pension assets under management in the UK pensions industry, of which around £100 billion is administered through SIPPs.

Springing into life in the early 1990s, a SIPP is a government-approved personal pension scheme. Clients either manage their own SIPP, which is in essence a long-term saving plan with tax efficiencies, or have a financial adviser to assist them.

The rise in self-managed pensions is largely attributed to the demise of generous and guaranteed final salary pensions, which came with a career for life, and the rise in life expectancy which will see many of us being retired for 20 or 30 years.

EPML filed its application for a special administration order on June 20 of this year because it had become insolvent. 

Smith & Williamson was appointed joint special administrators of EPML on June 21; EPML’s existing clients were officially moved to new operators on July 15. 

Work by Palfrey and his team on the case is ongoing.

 


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