Open Money to be reinvented as buy and build wealth management business
Loss making Manchester-based fintech business Open Money is to be restructured as a wealth management business, and will be hiring sales staff to grow the employee benefits business.
The new co-owner Will Mallard told TheBusinessDesk.com last night that all 70 staff have now been paid their April salaries, and that a restructuring proposal is “in process”. He said: “there should be an update on this in the coming week.”
The fintech business was set up as a disruptive financial advice portal, but despite running up large annual costs, income was a fraction of the amount invested. The business lost £9.3m in 2021 on turnover of just £593k.
However, Mallard appeared mystified as to why so little attention had been focused in the past on income and customer generation in the employee benefits and wealth management arms.
“The employee benefits business is a similarly well set up platform but for unknown reasons there hasn’t seemed to be any great focus on getting more customers.”
However, he also confirmed that there will be job cuts, as reported on Friday, shortly after founder and funder Duncan Cameron pulled the plug and his co-founder Anthony Morrow sold the business to Mallard and his business partner Patrick Leahy from the tech business Elva.
“There is a parallel consultation process under way that is certainly going to have a large number of redundancies,” Mallard said.
“The future proposed plans are the business will involve a buy and build strategy of IFA businesses to grow the wealth management side (the tech platform is amongst other things an online wealth manager) with a number of new hires in the employee benefits business.
“It should be noted that the regulated part of the business has considerable protection around client investments and capital requirements. The FCA is part of this process to protect this.”
He added: “The business including cash and customers will be managed with professional and regulatory oversight under proposed restructuring.”
Mallard said his business partner Patrick Leahy, a chartered accountant and experienced chief financial officer, is now acting chief executive of the business. Mallard described the pair as “active investors”.
It is understood that several senior management have signed off on sick leave since the news broke on Friday that the business had entered into a Company Voluntary Administration.
