A2O staff dismissals threatened potential sale

Network Alpha to Omega (A2O) will not be sold and the business is to be wound down, administrators Benedict Mackenzie say.

Simon Underwood, administrator at Benedict Mackenzie, reveals one of the main stumbling blocks to a deal was concern by potential purchasers regarding liabilities. This includes fears over potential employee claims following the administrator's dismissal of A2O staff.

He also cited client confidentiality issues under the Data Protection Act as a further reason for the failed negotiations.

Underwood is disappointed discussions had not concluded in a sale and confirmed the Winchester office will be closed down.

"We haven't been able to secure a sale so we have given notice to advisers to explain the position and we are moving to a position where we are winding down the company's affairs accordingly," he says.

North-East based Moneygate was at one point believed to have bought the network, but the deal fell through and Underwood says there were a number of potential buyers.

The administrators will now focus their efforts on advisers leaving the A2O network.

"Since my appointment some advisers have tendered their 'resignations' from the A2O network and it is believed that many are in the process of registering with alternative networks or seeking direct FSA authorisation," says Underwood in an adviser update. "In the circumstances we will now focus our efforts on processing reference requests.

"One of the focuses of the FSA has been that the administrators protect the position of all clients of A2O and it was anticipated that a sale of the network would have assisted with this objective. In the circumstances I now require all client files to be held to my order."

On the subject of commission payments due to A2O advisers, Underwood says: "We are awaiting legal advice about commission accounts and how much is owed to parties and will be going through this on an adviser to adviser basis."

A2O launched six years ago and claimed on its website - now taken down - to be one of the UK's 50 largest IFA businesses.