According to a statement issued by the Financial Conduct Authority (FCA), the firm made an application to the court on Tuesday after admitting that it was no longer solvent.
The joint special administrators have been named as Adam Stephens, Finbarr O’Connell, Henry Shinners and Gregory Palfrey of Smith & Williamson.
In a separate statement on its website, the law firm revealed that an FCA investigation was conducted in 2014 into a pooled account used by EPM to house clients money, which threw up concerns about the three “systems of controls” employed by firm when handling client assets.
On 18 March 2016, EPM voluntarily agreed to stop taking on new clients and reduce the cash from new fees.
“As a result of the above matters, substantial professional fees have been accrued in dealing with the above and related matters. These have not yet been paid in full.
“Professional advice was sought and the company’s directors were advised that EPM was insolvent and that it should be placed into special administration to provide protection for the clients and creditors,” said Smith & Williamson.
Introduced by the UK government in 2011, the special administration regime (Sar) aims to help resolve situations where investment firms with client money or assets fail. The FCA said under these circumstances the framework is used is to ensure “money is returned to customers as soon as is reasonably possible”.
Potential sale of books
The regulator said it was considering selling the firm’s book of business to another Sipp operator in a bid to provide “continuity of service to the EPM’s clients”.
“If EPM’s book of business is not sold, the special administrators will return as much client money to clients as possible, as quickly as possible,” said the FCA.
It stressed that the majority of client’s money “is in place as required”, but admitted it would know more once special administrators complete their investigation into the firm.
If the investigation finds that money cannot be reimbursed to client then they may be eligible to make a claim to the Financial Services Compensation Scheme (FSCS), said the watchdog.
When contacted by International Adviser, EPM declined to comment.