Fintech adviser OpenMoney is closing its employee benefits platform WorkLife, amid ongoing disputes about redundancies and staff pay.
The firm has faced difficulties since new owners took over the business in May this year, after its original backer — Moneysupermarket founder Duncan Cameron — stopped funding the enterprise.
At this point it was acquired by investors Patrick Leahy and Will Mallard, and as part of the takeover 50 staff were made redundant. A number of ex-employees have since complained about not being paid, nor receiving appropriate contributions to their workplace pensions.
Leahy, now the sole director of the business and its chief executive, has confirmed that the Worklife business will be closed and liquidators are in the process of being appointed, as he seeks new investment for the firm.
He told Manchester’s The Business Desk that WorkLife represented “a significant part of the group’s operating losses”. He added: “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).
It is understood that Leahy and Mallard’s takeover is still awaiting FCA approval on the takeover for the regulated part of OpenMoney. However Leahy has said that he anticipates much-needed new investment arriving shortly and is confident this will result in approval of the takeover.
He adds: “The business is sound, customers’ investments are safe, and we think we have a fantastic business that is going to grow strongly.”
Open Money was launched in April 2017 by Duncan Cameron and Anthony Morrow (pictured), a co-founder of Tatton Asset Management. In 2019 it acquired Jargonfree Benefits, an employee benefits platform founded by Steve Bee and Andrew Rice. This became the Worklife employee benefits platforms offered by OpenMoney.
Morrow, who was CEO, left in 2021, although has more recently worked as a non-executive director to help secure a sale when it becomes clear that funding from Cameron was to cease.
In an interview with New Model Adviser Morrow said that like many robo-advisers OpenMoney were loss-making and the business had suffered from following a “mixed-strategy” – by trying to operate across the mortgage, workplace, investment and money management sectors.
After funding from Cameron ceased Morrow helped negotiate the sale to Leahy and Mallard for a nominal sum. He says: “They were the only credible story that didn’t involve an administration and a fire sale. They had plans to do the restructure, they had investment and funding lined up, and a plan to grow the business. There was no solution that didn’t involve significant job losses and cost cuts.”
Morrow said he hopes the new owners will get funding and his “understanding is they are speaking to credible partners”. But he added: “For me to see the business I set up primarily to be a good, positive employer and help people make the best financial decisions, to see it run into the ground and stories about non-payment of staff and pensions, it makes me sad and really angry.”
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