Open Money to close employee benefits business with loss of six more jobs

Troubled Manchester fintech OpenMoney is to close its Worklife business, which offered financial advice to small business employees as part of employee benefits packages.

Trading as OpenMoney Benefits, and formed in 2019, the business was delivered through a partnership with Aberdeen-based independent financial adviser Futura and other partner companies.

Patrick Leahy, chief executive of OpenMoney, and as of 24 August 2023, the sole remaining director of Open Money Benefits Limited, confirmed to TheBusinessDesk.com that the business is to close as part of the process of ‘right-sizing’ the remaining parts of OpenMoney in order to secure investment and receive approval from the Financial Conduct Authority.

“OM Benefits/Worklife is in the process of being closed with liquidators being appointed, the formal date should be in the course of this week,” he said on Tuesday (29 August). 

“This is a significant part of the group’s operating losses. We can’t comment on what the FCAs view of this (is) but it makes the investment more attractive as the remaining business is near breakeven with huge capacity for consumers accessing regulated finance advice both directly and through partners (subject to FCA approvals).

“The investment is directly connected to the corporate restructuring and the FCA approvals.”

OpenMoney has been gripped in turmoil ever since founder Duncan Cameron withdrew funding from the loss making financial advice platform in April 2023. 

Over 50 staff have now lost their jobs and many have contacted TheBusinessDesk.com to complain they have not been paid what they are owed or received contributions to their pension accounts by the company.

Patrick Leahy

Last week Leahy admitted this was the case, but said it started before he was involved in the business, a claim denied by co-founder Anthony Morrow.

Leahy, a director of technology business Deep Inspire, and business partner Will Mallard, agreed to buy OpenMoney in May insisting to staff that the business was being placed into a CVA (Company Voluntary Arrangement), with Leahy becoming a director.

Although TheBusinessDesk.com understands that detailed conversations were held with a licensed and credible potential administrator, no formal legal process has commenced.

At the time of press, no application of a notice to appoint administrators has been filed.

A confirmation statement was filed at Companies House yesterday (29 August 2023) confirming that all documents are up to date and accurate including that the “persons with significant control” are Duncan Cameron and Anthony Morrow.

The FCA would not confirm or deny any authorisation application. 

However, any new entity assuming the management of people’s money has to prove it is adequately capitalised with new investment, and for the regulator to approve of the change of ownership.

Leahy added: “The FCA quite rightly are being prudent with ensuring the correct pieces are in place including funding, management and controls are in place together with the completion of corporate restructuring of Open Money Limited, Open Money Benefits which are progressing to CVA and CVL respectively. This has been a tough process for staff and creditors but is nearing conclusion.

“There are lots of acquisition opportunities in the finance market and the business has a strong tech and core staff  base with good compliance discipline.

“There will be further information available in the coming weeks.”

Futura have not responded to requests for comment.