Savers in Safe Hands funeral plan will get only A FIFTH of their money back – at most
How greedy funerals firm skimmed cash from customer fund – and enriched bosses Safe hands funeral cash was used to buy commercial property
ADMINISTRATORS appointed to investigate the demise of funeral plan provider Safe Hands Plans have told customers to expect no more than a fifth of their money back. This is despite the fact their money was meant to be safeguarded in a trust overseen by independent trustees.
This devastating and depressing news is contained in a document made available in the past couple of days to 47,000 customers of Safe Hands by FRP – and seen by The Mail on Sunday.
FRP was appointed as administrator to the business in late March. Its financial work so far confirms the conclusions of the detailed investigation that The Mail on Sunday has conducted into Safe Hands over the past two months. Namely, that trust assets have been mismanaged, misused and misappropriated.
Safe Hands was bought by Richard Philip Wells in February 2020 through private equity firm SHP
Capital Holdings for £9million.
He immediately replaced the independent trustees of the trust fund with an outside firm (Sterling
Trust Corporation) whose chief executive was a former business partner.
A director of 19 companies and a former boss of eight, including several that have collapsed, Wells has an affluent lifestyle, owning two
‘Money kept in high-risk offshore investments’
large houses in the West Midlands, each worth about £1.2million.
Safe Hands’ customers, whose average age is 70, typically paid £3,000 for a funeral plan of their choosing.
Such plans are meant to offer peace of mind, ensuring all funeral arrangements are paid for and agreed in advance.
However, if FRP’s sums prove to be right, customers will get back no more than £600, probably less.
The collapse of Safe Hands, based in Wakefield, West Yorkshire, followed the withdrawal of its application to become a regulated provider of funeral plans when the Financial Conduct Authority starts overseeing the industry at the end of July.
The watchdog is currently vetting funeral plan providers to see whether they are financially fit and proper to continue in business.
Of 75 companies on its radar, 32 have submitted applications to be authorised, while 20 have indicated they either do not intend to apply or have yet to seek authorisation. Thirteen providers have withdrawn applications, including Safe Hands. This indicates the remaining dozen are struggling to meet the required FCA standards.
The regulator is warning potential buyers not to purchase a plan from a provider that has withdrawn its application.
Among the 12 are some high-profile brands, including Capital Life (based in Wilmslow, Cheshire) and Stockport-based Pride Planning. Neither is currently accepting new purchases.
Late last month, FRP raised concerns over some £60 million of Safe Hands’ trust assets that were held in ‘illiquid, high-risk investments’, many based in offshore jurisdictions. It said their value would be ‘materially lower’.
It also questioned whether some of the assets were actually owned by the trust. However, now it has quantified what it means by ‘materially lower’.
In its latest report, it says the realisable value of these assets ‘will be between £10.6million and £16.1 million’.
These figures compare to ‘claims against the trust’ (the cost of funerals promised) of £71.13million.
‘This equates to a return [for planholders] of between 10 pence and 20 pence in the pound,’ it says.
FRP says it is working with law firm Pinsent Masons to ‘identify and pursue’ trust assets.
News of the fund’s parlous financial health has angered consumer experts and customers.
James Daley, boss of research company Fairer Finance, has long called for the funeral plans market to be regulated.
As he says (below) Daley believes the Government should step in to ensure Safe Hands’ customers are given the funeral they paid for in good faith.
Mike Lewis attended the funeral of his 95-year-old mother Doreen six days ago at Cottingley Hall Crematorium in Leeds. The cost was meant to have been paid for by a plan she bought from Safe Hands.
Although funeral company Dignity offered to carry out the funeral as part of a temporary agreement struck with FRP, Mike and his two siblings chose instead to pay for a funeral arranged by local directors Bennett of Morley.
‘They took care of the funeral for our dad, who died when he was just 62,’ says Mike. ‘They’re compassionate, reliable and support families in their darkest hour – and they did Mum proud.’
He adds: ‘We were able to reflect on her remarkable life – a member of the Women’s Auxiliary Air Force in the Second World War and someone who worked well into her 70s.’
Mike, an auditor, has taken a keen interest in Safe Hands since its plunge into administration, scouring the financial accounts of companies connected to 35-year-old Richard Philip Wells. He believes that if it is proven that trust assets were misappropriated, criminal charges should follow.
Tom Gormanly was appointed chief executive of Safe Hands when Wells bought the business. He was only made aware of the trust fund’s dire financial situation when the FCA raised concerns in February this year.
On Friday, he told The Mail on Sunday: ‘My hope now is that FRP finds out exactly what has happened to the trust fund and reveals the truth.’