Royal Liver latest lender to put its adviser offshoot up for sale

Liverpool's friendly society tries to sell off Park Row after it posts a £6m loss for 2008

Simon Evans
Sunday 10 May 2009 00:00
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Royal Liver, the Liverpool-based friendly society, has appointed the accountants Ernst & Young to conduct a sale of its financial adviser arm, Park Row, amid a flurry of activity in the ailing financial advice sector.

Royal Liver is seeking to offload the loss-making adviser business, which it bought in 2003 for £16.7m, after failing to turn around the fortunes of the former AIM-listed firm.

According to Park Row's latest accounts, the firm posted an operating loss of nearly £6m in 2008, despite a radical cost cutting programme that saw around £11m eliminated.

Park Row is currently the subject of an investigation by the Financial Services Authority (FSA) which is reviewing its systems and controls. Its chief executive, Peter Sprung, is believed to have met the regulator in March.

A spokesman for Park Row said: "We have received a number of enquiries about Park Row in recent months; the sector is changing rapidly and some are looking to enter or expand.

"We are considering our strategic options, which, as always, could range from withdrawal from the distribution space or could include adding to our presence, given that any operation needs scale in this sector."

Ernst & Young declined to comment on the sale.

Meanwhile, it's believed that Swiss Life is considering selling the UK operation of its financial advisory arm, AWD Chase De Vere, after it received a number of indicative offers for the ailing business.

In March, its chief executive, Mike Kirsch, quit the group after a restructuring of the business, which included the sale of Moneyextra and the AWD Home Finance.

No formal process has begun but it's believed that interest in the UK subsidiary, which is thought to have lost around £26m last year, has increased the likelihood of a sale.

Rumours have suggested that Towry Law, the wealth manager led by Andrew Fisher, has indicated an interest in AWD Chase De Vere, although these suggestions have been denied.

The financial advice sector is facing unprecedented turmoil with advisers facing the double whammy of major regulatory overhaul and plunging revenues. Industry estimates have suggested that hundreds of advisers could go to the wall as a result of the credit crunch.

The UK's third largest financial adviser, The Money Portal, recently appointed City advisers Fenchurch to conduct a strategic review of its business. Although Money Portal's head of strategy, Alan Easter, last month said that "affordability of debt was not an issue for the firm", it is believed that the firm is involved in talks with Lloyds Banking Group over a debt pile of around £30m. Lloyds is also being advised by Ernst & Young.

A spokesman for Fenchurch declined to comment.

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