Broken Trust: FCA Issues Update on Philips Trust Corporation

Posted: 27th March 2024
by Nathan Maddison

It has been almost two years since the unregulated Will writing and estate planning company Philips Trust Corporation (PTC) collapsed into administration. The collapse has had devastating consequences for PTC’s clients and their families, with many clients still facing great uncertainty about the future of their investments.

At the time of their collapse in April 2022, PTC were the corporate Trustee of more than 2,000 ‘Family Protection Trusts’ and had invested more than £44 million of client funds. Many of PTC’s clients had been referred to the company (or another company in PTC’s group) by their local Building Society, and many were led to believe that PTC could help them protect their assets against care fees, Inheritance Tax and probate costs.

Following widespread outrage at the Building Societies’ involvement in referring clients to PTC, the Financial Conduct Authority (FCA) has now issued an update. Whilst PTC themselves were not regulated by the FCA, the Building Societies that referred clients were. After considering the matter ‘carefully’, the FCA has decided that they cannot take any action against the Building Societies, which they understand will be ‘disappointing for consumers’.

The FCA has now ruled that the Building Societies were not carrying out a ‘regulated activity when referring clients to PTC. Instead, they were making clients aware of PTC and the services they offered, which the Building Societies were entitled to do. As the loss incurred by clients was the result of PTC’s actions, and not the actions of the Building Societies, the FCA cannot take any action against the Building Societies themselves.

The FCA’s statement is unlikely to offer any comfort or reassurance to those affected by PTC’s collapse, especially as many of PTC’s clients only engaged with them as a direct result of the Building Societies’ referral.

Unfortunately, PTC’s clients are not alone in their experiences. PTC is one of many unregulated Will writing and estate planning companies whose collapse has culminated in scandal. Oftentimes, clients are left out of pocket, have limited access to their testamentary documents, and find that they have been encouraged to create Trusts unnecessarily.

Our team of specialists at EMG Solicitors can advise on all matters of estate planning and probate services. If you’ve been affected by PTC’s collapse or if you have any general queries about your estate, contact us for a no-obligation free of charge appointment today.