FSCS to pay out for poor advice on Arch Cru and Keydata
The Financial Service Compensation Scheme (FSCS) has opened the floodgates for consumers to claim against 16 financial advisers (including Financial & Taxation Consultants based in Exeter) some of which were involved in Keydata and Arch Cru scandals.
The FSCS has declared 16 financial advice firms across the country in default, meaning that their customers can now put in a claim for up to £50,000 for any money they may have lost as a result of their dealings with the firms.
A default means that the FSCS is satisfied the firms cannot pay their own claims and takes over the payment of those claims.
One of the firms, Financial & Taxation Consultants in Exeter, advised investors to buy Keydata products. Keydata was declared insolvent in 2009 and it was subsequently discovered that £103 million of clients’ money that was supposed to be invested in SLS Capital, a Luxembourg-based operation investing in second hand endowment policies, was missing and has never turned up.
Clients of Financial & Taxation Consultants who lost money after being advised to invest in Keydata can now claim.
Another firm, Trigon Associates in Hertfordshire, was involved in the Arch Cru debacle. The Arch Cru funds were suspended in 2009 due to illiquidity concerns, as they were invested in assets such as private equity and finances, and even Greek shipping vessels. Investors saw their assets drop 40% and there has been various mud-slinging in the past three years over who is to blame.
Arch Financial Products managed the funds, which were in turn marketed by Cru Investment Management as being safe but also offering double-digit returns.
Clients of Trigon Associates who lost money in Arch Cru funds can now claim up to £50,000 from the FSCS.
Clients of Edinburgh-based Dunedin Independent, which collapsed in February with a total of £6 million of claims against it, can also get their money back from the FSCS after the firm was declared in default.
Dunedin’s claims related to the sale of unregulated collective investment schemes (Ucis), a type of investment fund which is not regulated by the Financial Services Authority (FSA) and is typically high risk due to the nature of the underlying investments, which can range from teak to Brazilian rainforests.
The FSA is taking a particularly dim view of Ucis and is consulting onbanning the recommendation of Ucis to everyday investors.
The FSCS said: ‘We have already started paying compensation in respect of these firms. However, we’re encouraging anyone else who believes theymay be owed money through their dealings with one of these firms to contact our initial contact team if they have not yet applied for compensation.’
The initial contact team can be contacted on 0800 678 1100 or 020 7741 4100, or by email: enquiries@fscs.org.uk
The other advice firms that have also been declared in default are:
Clear View Access, Nottingham
Throgmorton Asset Management, Leicester Index Fund Management, Watford Kathleen Burton, Tyne and Wear Richard Schwartz Partnership, Belfast Private Financial Planning Services, Chester WS Ritchie trading as Caledonia Investment & Property Bureau, Clydebank Bridge Hall Stockbrokers, London RK Harrison Financial Planning, London Binary Financial Services, Cardiff Next Generation Mortgages, Cardiff PORT Financial Services, Bangor Derrick Hales Financial Planning, Halifax
Article by Michelle McGagh, republished with permission from Citywire Money – www.citywire.co.uk/money
