Cru scandal puts 100 firms at risk of closure

Thankfully, having stayed well clear of CRU despite many approaches and incentives, I simply cannot understand why any adviser / business would go against everything they tell their clients and 'take a punt' on a new scheme just because it looks good?

I do genuinely feel for some advisers who have been duped by 'good marketing' and it should be outlawed how investor firms portray themselves, however, we as advisers have a responsibility to check these people out before investing clients money.

It is no suprise that the FSA will come down hard on firms who sold it to the masses, as again it proves, it was being 'sold' to clients based on the earnings potential to the adviser, not what the client wanted. You cant tell me that suddenly every client in their ATR assessment came out with "Oooh yes, I'll have some of those Private Equity Schemes Please"? It just wouldnt happen.

This example simply makes life harder for the good advisers in the world. Stick to what we do best and do the right thing for the client.

Dont go off on tangents to earn a quick buck as it nearly always ends in tears !

As the article states, the Cru and its funds were regulated by the cretins at the FSA and they should take responsibility for the misrepresentation of risk.

After all, isn't that what they are supposed to receive their grossly inflated salaries and bonuses for?

Having said that, when I attended the Cru meetings, none of the funds seemed to be very cautious in my opinion.

Why is it that firms like Canada Life fully supported CRU, did their due diligence get duped as well.

It all underlines again, that if you do not fully understand a scheme do not invest in it.

However, it is a bit rich for the useless bank favouring FSA to be tellings IFA's they should have looked into such schemes in more detail. Their ineptitude has brought the country to the brink of bankruptcy. Or perhaps they have forgotton already!

Why are people still prejudging. We still await the values for the cell companies and they maybe down valued (as many funds have been these last 18 months in all sectors) In addition lets wait and see what Capita offers as the options for the funds. I wonder whether the organisations who are stirring up rumours and scandal kind of terminology have a vested commercial interest in doing so?

A fund which demonstrated a 3 year track record and was approved by the FSA qualified as cautious should have all those who enabled such funds to operate brought to book before any other representative IFA body. It would also ask questions of ALL funds as to what they hold under the bonnet in the murky world of fund management with all its smoke and mirrors. So.... lets wait for the facts to emerge and then consider accountability.

having invested in the cru funds myself, there were no lquidity issues when I sold mine and clients funds, this was after the arrow visit to Capita in October.

The questionis "what caused the problem and who was involved" may provide the real answer and how this should be dealt with.

I suspect 1/2 billion pounds of the banks bail out could solve the problem and save face and probably do a fairer and better job.

Thankfully, having stayed well clear of CRU , I simply cannot understand why any adviser / business would go against everything they tell their clients and 'take a punt' on a new scheme just because it looks good?

I do genuinely feel for some advisers who have been duped by 'good marketing' and it should be outlawed how investor firms portray themselves.

It all underlines again, that if you do not fully understand a scheme do not invest in it.

However, it is a bit rich for the useless bank favouring FSA to be tellings IFA's they should have looked into such schemes in more detail. Their ineptitude has brought the country to the brink of bankruptcy. Or perhaps they have forgotton already.

IF there is a report on the CRU debacle by the FSA in due course, lets please see one that looks at ALL the parties involved failures including teh FSA itself unlike th Structured Bond report recently released which was good at identifying everyone else's failings excpet the FSA's own which meant it was NOT balanced and means they have not publicly identified/learnt from their own mistakes.

The meetings that I attended promoted the funds as low risk. The literature was slick and the presentations were on the same lines. Sometimes you wonder whether you're missing something, as other advisers are promoting the investment. I later learned that some advisers were taking a 1% trail: did that particular incentive cloud their better judgement?

Another possibility is that, as I am obviously too thick to remain in this industry after 2012, I was also obviously too dull to understand the product being promoted to me and therefore couldn't fall for it any way.

Perhaps it may have been that after more than twenty five years in this business, I don't believe a word of any of the bullshit I hear from insurance companies or fund management groups. The Threadneedle UK Money Securities Fund springs to mind after recent events. Sadly, I fell for that one, but certainly I'll avoid Threadneedle in the future. Well, at least until 2013.

The 1.5% trail offered to many IFA's should have been a warning sign.

Common Sense would have told anyone that this strategy was doomed as soon as outflows occurred

Arch Cru made a selling point about the illiquidity - meaning that led to smoother returns. they should have been laughed at, rather than invested in

And glad I am of my caution.

But one does have to wonder about the role of the FSA in all of this as others have pointed out they had "authorised" this scheme and some fairly large companies with quite large resources had also taken this scheme on and were happy it seems to recomend.

I am not against this sort of innovation in principal but perhaps if the FSA is done away with and a consumer lead office is a partial replacement then this type of product along with others would be precluded. But allowed under a City regime of "buyer beware" for a more experienced and risk taking investor.

Because as Karl points out at present recommending anything like this is taking a huge risk for the adviser. The directors of the bust scheme will no doubt have taken their money out and lived to do it all again.

Surprise, surprise. Another sensationalist story from Citywire.

As William Ward said, the people involved need to wait for the facts to emerge before considering accountability.

Journalists will never stop facts getting in the way of a good story however.

I have decided to stop using their website due to their tabloid tendencies.

I drank the mans wine and listened to his presentation. Slick ,but low risk in smaller companies?? Me not think so !

How many advisers are RDR compliant and Level four who advised on these?

I would have thought a smaller co fund for a small amount be more appropriate .

Me not level four yet.

but i can do due diligence !!!!!!

I believe the Arch cru Portfolio fund was marketed in the cautious managed sector. Who decided it went into this? Or are IFA's never to trust the sector descriptions?

Due Diligence my A#*e. I spoke at length with Arch and was unable to obtain any transparent or tangible information on the underlying assets, sufficient enough for me me to feel confident to recommend the funds. These funds were cloaked and masked and many of the investments were subject to non disclosure agreement- So would someone please tell me how they conducted their due diligence when faced with this lack of disclosure?

If a new fund coming to market has to be authorised by the FSA then amongst any other aspects they might be looking at, no doubt 'risk' potential, surely will be top of their list.

This being the case why should the FSA not be held fully accountable - I believe one is unable to sue the FSA but surely whoever heads up the department responsible should be despatched with haste.

To get the right answers you have to ask the right questions - I shall do that now and make available the response from the FSA as soon as is possible.

Why is it in finance people can't take responsibility for their bad advice.

Always wanting to blame other people for their failures.

They resent regulation then when they have a failure they try to blame fsa.

If the fsa advised people on investments we wouldn't need to pay ifa's.

My opinion is ifa's are parasites, why aren't they paid on perfomance of investments.?

Is it because they wouldn't earn anything .

could someone tell me what ARCH Cru funds actually invested in?