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Embark buys Liberty Sipp's £3bn client book

Liberty Sipp will be wound down after Embark reached a deal to buy its £3 billion client book.

Embark buys Liberty Sipp's £3bn client book

Sipp and platform provider Embark has acquired the £3.2 billion client book of Liberty Sipp, New Model Adviser® can reveal.

The deal, for an undisclosed sum, will see Embark take on Liberty Sipp’s whole book of pensions. It has not acquired the actual Liberty Sipp company, which will be wound-down with support from Embark once the acquisition is completed.

Liberty Sipp works with 754 financial advisers and made an operating profit of £500,000 last year. The firm's managing director John Fox (pictured) will continue to run the book of business along with director Julie Dean. 

Claims firm Anthony Philip James & Co (APJ) recently launched a number of Financial Ombudsman Service complaints against Liberty Sipp over unregulated investments it accepted, including collapsed Costa-Rican scheme Ethical Forestry. Liberty Sipp has denied any wrongdoing. 

As Embark is acquiring the assets rather than the entire Liberty Sipp business, the liability for any claims will remain with Liberty Sipp as it is wound down.

A spokesman for Embark said Liberty Sipp will operate until these complaints are completed and will continue to have professional indemnity insurance cover, making it ‘unlikely’ that cash assets will run too short to pay successful complainants.

The Liberty Sipp book is being bought through Embark subsidiary EBS Pensions. According to Embark's spokesman non-standard assets make up an 'insignificant' 3% of the combined EBS and Liberty Sipp assets.

After the deal Liberty Sipp products will rebrand but client will keep the same terms and conditions. 

An extra £2 million of regulatory capital will be injected into EBS which will administer the Sipps. The deal brings Embark’s total assets to £15 billion - £5 billion short of where the Sipp and platform provider is aiming for by 2020.

Embark chief executive Phil Smith (pictured above) said the acquisition will safeguard Liberty Sipp’s customers.

‘This transaction, at this time, provides protection for the consumer clients of Liberty Sipp. It is also highly positive for the employees of both businesses and will further improve the growth trajectory for wider stakeholders of the Embark group.

'Fundamentally, the ex-Liberty team, their clients and distribution partners will thrive with the supportive financial strength, scale, and technology resources of the Embark group.'

Fox added: ‘We are moving from being one of the fastest growing small players in the Sipp market, to driving the continued growth of one of the largest sector players,’ he said. 

The combined business will be headquartered in Embark’s Manchester office with a smaller operation in London.

The deal comes just days after AIM-listed financial services firm STM announced it had bought troubled Sipp provider Carey Pensions

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