Racing for a fall: Failed funeral boss roared around the Silverstone track until spinning off – just days before his firm collapsed leaving 47,000 pensioners out of pocket
- A funeral plan firm collapsed in March leaving 47,000 customers facing losses
- Millionaire boss Richard Wells, 35, only bought Safe Hands in February 2020
- Just 11 days before the company went bust, Wells was racing around Silverstone
Indulging his passion for motorsport, Richard Wells roared gleefully around the Silverstone track until he spun off, ending his race abruptly.
Just 11 days later on March 23, his funeral plan firm Safe Hands suffered a similar fate when it collapsed and called in administrators.
The Silverstone spin may have dented cocksure Wells’s pride, but the failure of Safe Hands has left 47,000 customers – many of them elderly or vulnerable – facing financial losses running into thousands of pounds.
Gloomily, the administrator FRP admitted last week it had recovered only £3.7 million in cash of the £65 million that should have been ring-fenced in an independently run trust fund to cover the cost of funerals. FRP fears it may never recover anything like the full amount.
Over recent weeks, The Mail on Sunday’s Personal Finance Editor Jeff Prestridge has revealed how the staggering absence of regulation in the pre-paid funeral industry allowed successive owners of Safe Hands to divert money from the trust fund, much of it into offshore accounts. Ironically, the firm’s demise appears to have been triggered when the Financial Conduct Authority (FCA) announced it would finally begin overseeing such firms from this July.
Failed funeral boss Richard Wells (left), 35, was driving Silverstone in a supercar less than two weeks before his firm went bust, leaving nearly 50,000 pensioners facing losses
Richard Wells (pictured driving) was racing at the Praga Cup, a six-stage supercar competition, in which rich enthusiasts team up with professional drivers
Safe Hands withdrew its application to be accredited by the regulator in February when it became clear that it would not meet the required standards. It collapsed the following month.
Now an investigation by the MoS has unearthed more astonishing details of how the company has operated over more than a decade.
Established in 2010 by father and son Peter and Sean Cavanagh, company accounts show money from the trust fund was being diverted into paying bonuses to them and an associate as early as 2014.
As it sought to expand, Safe Hands secured the endorsements of TV GP Dr Hilary Jones and the late World Cup winning goalie Gordon Banks, but it also launched an audacious plot against its rivals. Posing as independent financial advisers seeking new business, some of its salesmen secretly recorded representatives of other firms making derogatory comments about Safe Hands at a meeting.
Lawyers for the Yorkshire firm sent transcripts of the comments to its rivals and sued them for ‘vicious, unprovoked, verbal attacks’ that it claimed were ‘a desperate and shamefully unprofessional effort to get an edge over the competition’.
Thousands of customers who have paid for funeral plans risk losing ‘significant’ sums of cash following a major industry clampdown (stock photo used)
However, the case collapsed when the ruse was exposed, leaving Safe Hands with a six-figure bill for legal costs. The court saga in 2016 also revealed how the National Federation of Funeral Directors (NFFD), which had endorsed the firm and was presented as an independent body, was actually one of Safe Hands’s sister companies and had the same owners.
The Cavanaghs did not respond to repeated requests for comment, but analysis of accounts show that sums from the trust fund when they were in charge were loaned to SHFT Properties, another firm controlled by Safe Hands, which was then used to buy at least five commercial properties worth £1.7 million. Although a trust is permitted to make such investments, this should be done with the interests of plan holders at its core.
In 2018 alone, a further £2 million was moved from the trust fund and paid into the company coffers before being handed out in dividends to shareholders.
Wells, 35, bought Safe Hands in February 2020 through his private equity firm SHP Capital Holdings and soon replaced the independent trustees of the fund with an outside firm 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 large houses in the West Midlands, each worth about £1.2 million.
One six-bedroom mansion in Staffordshire has a lake and is set in five acres. A Range Rover and Bentley with personalised number plates were parked there last week.
The deals, which typically cost between £3,000 and £4,000, promised customers peace of mind that their loved ones will not be hit with a big bill when they die (stock image used)
Wells competes in the Praga Cup, a six-stage supercar competition in which rich enthusiasts team up with professional drivers. Wells and his partner Alex Kapadia are in fourth place, and the businessman is planning his next race at Snetterton in Norfolk on May 14 and 15.
Safe Hands customers are, by contrast, digesting dire news. FRP admitted tracing money siphoned from the trust fund was proving ‘difficult and time-consuming’, adding: ‘A significant proportion of the funds appears to have been used to make illiquid, high-risk investments, many of which are based in offshore jurisdictions.’
Last night, Wells said: ‘It is with deep and sincere regret that Safe Hands is in this position. The company was acquired in good faith to provide funeral plans in what was an expanding sector. Due to the economic effects of Covid and other business pressures the decision was taken for the company to be placed into administration to ensure the best outcome for plan holders.’
Dr Jones did not respond to a request for comment, but there is no suggestion he or Mr Banks knew of or were involved in any impropriety. FRP declined to comment.
An FCA spokesman said: ‘The Government changed the law to bring pre-paid funeral plans under our regulation from the end of July 2022. Until then, firms such as Safe Hands are unregulated and we have limited powers.’
Fat cat with no shame
By Jeff Prestridge – Personal Finance Editor for the Mail on Sunday
Abusing the trust of elderly people is a truly despicable act. Sadly, the directors of Safe Hands Plans have taken financial abuse to the next level. It fills my bones with anger.
Thousands of people, most in their 60s and 70s, thought they were doing the right thing when they bought a Safe Hands funeral plan. The right thing for their children, their funerals paid for and nicely sorted.
But the directors took their money and made financial gains for themselves. First by taking some of the money held in trust on behalf of customers and feeding it into the company coffers so they could pay themselves handsome dividends, and then plundering the trust’s assets to fund other investments and hiding these in far-flung tax havens such as the Cayman Islands. They took advantage of a market devoid of regulation and made hay. Unfortunately, they are not alone. It will not be long, I fear, before other greedy funeral plan providers bubble to the surface like scum.
It remains to be seen whether the architects responsible for the financial pillaging that has taken place at Safe Hands are held accountable for their financial sins. I truly hope so. Justice must prevail.
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