Employee rights legislation may have scuppered Park Row/2plan deal

Talks over the transfer of 240 Park Row advisers to 2plan Wealth Management may have fallen through as a result of legislation introduced three years ago to preserve employees' terms and conditions when switching employer.

Lawyers acting for both parties were set to sign an agreement for the transfer today, but IFAonline understands the board of Royal Liver, which owns Park Row, was concerned by the financial implications of the legislation, known as the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).

Royal Liver was hoping to include 90 head office staff in the transfer, but 2plan was most interested in Park Row's adviser base.

As the staff would not be included as part of the deal, Royal Liver would have been forced to cover their redundancy costs as the Park Row business was wound down. IFAonline understands this may have run into the millions.

It is believed the board then pulled out of the deal, although Royal Liver was unavailable for comment.

Chris Smallwood, chief executive of 2plan, this afternoon expressed his surprise at the u-turn, revealing he was due to sign legal documents confirming the transfer at lunchtime today.

"We have been in exclusive talks with them over the past few weeks and had always believed that both parties were working well together with the same level of integrity and honesty.

"Last night a conference call between both parties confirmed that an agreement had been reached which we were all happy with and indeed we were due to sign legal agreements at just after 1pm today.

"Sadly however, we then saw press statements, issued without our knowledge, saying that the deal had collapsed."

Park Row says there is "no panic here" after today announcing it had failed to secure "satisfactory terms" with 2plan over the transfer of its 240 advisers. The FSA was poised to sanction the deal.

"It really is business as usual for our advisers," Park Row sales and marketing director Carey Shakespeare says. "There's no panic here. We have been in talks with firms for six months. We will find a suitor when we find one."