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FCA chases advisers for responses over Arch Cru redress scheme

by Jun Merrett on Aug 23, 2013 at 11:06

FCA chases advisers for responses over Arch Cru redress scheme

The Financial Conduct Authority (FCA) has written to advisers that have failed to provide it with figures on the number of eligible claimants for its Arch Cru redress scheme.

Firms were given a deadline of 29 July to inform the regulator of clients eligible for the scheme, which requires advisers the regulator deems to have mis-sold Arch Cru funds to provide compensation.

The FCA said 443 firms had so far provided figures of eligible claimants. From those firms, 7,021 are deemed to be eligible, and 3,333, or 48% have opted in to the scheme.

An FCA spokesman said: 'Firms were required to let the FCA know by 29 July 2013 how many consumers had opted into the consumer redress scheme. We have written to firms who do not appear to have met the deadline, requiring them to provide the report and explain why they have not complied with the scheme rules.'

Advisers had one month from 1 April to contact clients about the scheme and were required to let clients who opt in to receive compensation to know the outcome of their case by 9 December.

19 comments so far. Why not have your say?

Stan B

Aug 23, 2013 at 11:32

Astonishing figures. Despite being practically bullied, (repeatedly, with follow up letters for those not succumbing at the first or second attempt) by the FCA into applying for compensation, more than half clearly believe their advisers not to be at fault and have the integrity to resist.

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DP's IFA

Aug 23, 2013 at 11:38

Stan B. Totally agree with your sentiment. Maybe the FCA will move on & look at their comments about the FSA and failings connected with this whole sorry mess. Especially no fine or review of get out of Jail Free scheme, despite finding Capita Guilty of Grave failings. Oh. Think Not!!

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David Craik

Aug 23, 2013 at 11:44

Will the FSA admit their failings after Harcus Sinclair are succesful in their litigation against Capita?

There must be a few senior people at FCA begining to get a little worried!

Be very afraid!

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DG

Aug 23, 2013 at 12:07

http://www.citywire.co.uk/new-model-adviser/fsa-expects-opt-in-to-slash-cru-redress-and-avoid-fscs-bills/a646176

which notes that: “The regulator said it expected around 15% to 30% of consumers to opt in to the scheme”

Another wet finger in the air by the regulator.....from where do they conjure up their preposterous conclusions?! Probably the bottom of the same barrel they scraped when searching around for someone to blame for this fiasco other than the ACD and fund managers.

Equally, as Stan B so succinctly notes, a truly remarkably low figure, so far, given the manner in which investors were mercilessly encouraged to claim against their adviser.

Roll on the Harcus Sinclair court case as some in Canary Wharf need to feel the heat they are so quick to direct at the innocent.

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Lyndon Edwards

Aug 23, 2013 at 12:42

The Times reported yesterday 21st August, on (page 35) that Capita has been selected as the preferred bidder for a 6 year contract (I quote) ". . . to win responsibility for keeping tabs on thousands of criminal offenders after getting the nod for a £400 million contract to administer electronic tags.. . . . Capita will be responsible for ensuring that the systems and technology work properly together and for monitoring the offenders wearing the tags once the programme is up and running.. . . . "

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Lyndon Edwards

Aug 23, 2013 at 12:43

Sorry, a day out, the report was in The Times dated 21st, the day before yesterday!.

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Man in Black

Aug 23, 2013 at 13:08

@Lyndon

Clearly, the streets will soon be even less safe than has hitherto been the case. But cheer up. At least its not the FCA running this. If it was, we would see people who drop litter, exceed the speed limit by 2mph or not pickup after their dog in the park wearing electronic tags, and indeed earpieces to hear the frequent shrieking coming from Canary Wharf, whilst every other house was burgled by re-offenders.

@Stan B

Quite right. A majority of investors still will not blame their IFAs, though I'd be interested in knowing whether this figure includes defunct firms (where I would expect the opt-in rate to be higher).

The sad point of course is that those clients with the integrity to resist the FCA's hectoring here might go relatively uncompensated for the mother of all regulatory failures. Capita should be forced to make up their losses.

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Ned K

Aug 23, 2013 at 15:59

When I spoke to a bod from the FSA/FCA he said that most advisers PI insurers were refusing to pay on CF Arch claims (who can blame them). I was told by a PI insurer that most policies contain a fairly wide financial failure clause which many have invoked for CF Arch claims. The FSA/FCA were in correspondence with IFA's PI insurers regarding CF Arch so they were aware of IFA's PI position prior to introducing the S404 redress scheme, so they know that many IFA's will fail financially without the backing of their PI insurers.

The FSA/FCA has taken a great deal of interest in IFA's PI cover and they are prepared to let IFA's fail without it which is very odd as the FSA/FCA has never bothered to comment on Capita FM's PI insurance in relation to CF Arch - why might that be?

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Gillian Cardy

Aug 23, 2013 at 16:00

@MiB : I'd be surprised if it includes defunct firms as the vast majority of firms left / went out of business / went into administration / deauthorised / phoenixed (many with help from our - not - favourite legal firm) escaping any requirement from the FSA / FCA to undertake the review - and if that was the case then they would not have written to those clients, and they will therefore not be counted in these figures.

So much for the level playing field.

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Gillian Cardy

Aug 23, 2013 at 16:04

@NedK : when we finally have incontrovertible proof that the FSA allowed Capita to trade without PI / capital resources / parent company guarantees we will have the incontrovertible proof of a regulatory failing leading to consumer losses and industry failure which must require a s.14 enquiry.

Hoping that advisers PI insurers, and if not them then every other adviser through FSCS levies, will pick up the pieces because of that failing is cynicism in the extreme.

Which is absolutely why EVERY adviser should support the efforts to bring Capita to account for its failings.

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Ned K

Aug 23, 2013 at 16:51

@Gill,

The incontrovertible proof that the FSA allowed Capita to trade without PI cover is their silence.

"You say it best when you say nothing at all!"

I heard it fromt the Donkey's mouth that our not so favourite legal firm was doing unofficial work on phoenixing firms in return for a run at the FSCS compensation for their CF Arch clients.

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Julian Stevens

Aug 23, 2013 at 17:46

To David Craik ~ There are no senior people at FCA begining to get the slightest bit worried. The FSA has a government-granted mandate to do whatever it wants to whomsover it wants by whatever means it wants, with total impunity.

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Concerned.Consumer

Aug 24, 2013 at 14:18

"The FSA has a government-granted mandate to do whatever it wants to whomsover it wants by whatever means it wants, with total impunity"

..which is a good thing until we rid this country of Investment product sales people trading as financial advisers. A bit more pressure and the independent advice market will collapse and we can all sleep easy.

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Clean Skin

Aug 26, 2013 at 12:51

@ Gillian Cardy. What planet are you on ? Totally non representative of Industry thinking. The very type of person that the UK FS industry spawned and the UK FCA are trying hard to eradicate. Whats your history I wonder?

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Julian Stevens

Aug 26, 2013 at 20:21

Announcing an inquiry into the new Financial Conduct Authority, Chairman of the Treasury Select Committee, Andrew Tyrie MP, said only a week or two ago:

“No institution, however powerful, should be unaccountable. It is particularly important that an institution as powerful as the Financial Conduct Authority should be subject to proper scrutiny. It is with that in mind that the Treasury Committee is launching an inquiry into the accountability of the FCA."

Let us hope (and pray) this is the first, if belated, step on the road to the creation of an Independent Regulatory Oversight Committee. And that APFA will compile and submit to the Committee an appropriate dossier of material to help it with this investigation.

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Clean Skin

Aug 26, 2013 at 22:10

Hot air to appease. It will amount to nothing. Regulation in the UK is an absolute mess but nobody will say so. It's a total cock up and will take decades to sort out. There is only one way to change things. An IFA needs to get elected into parliament. .UKIP maybe... There is a chance here, and then relentlessly use this position to get things done. It is a Illegal for a UK regulator to ignore a letter of questioning from a MP in the UK. Someone out there go for it..

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Gillian Cardy

Aug 27, 2013 at 16:19

@Clean Skin : which bit of what I have said are you disagreeing with??

@Clean Skin : there's a reasonably clear precis of my career on Citywire as New Model Adviser cover star

@Clean Skin : the FSA / FCA don't ignore MP's letters - they simply repeat the same old tripe : it's the advisers' fault for mis-selling - quite ignoring the provider responsibility to follow the rules too ...

@Concerned.Consumer : if there were no advisers then there would be no-one to fall back on to cover Capita's failings - so if you were an investor in these funds you would be asking why the FSA / FCA wasn't holding Capita to account and ensuring that you got compensation for their mistakes - much as you clearly despise the adviser / sales community, regardless of whether anyone advised or sold it is the adviser community (including those who never went near the funds) that is picking up the tab and as such investors ought to be grateful that the regulators seem to be happy to use advisers / sellers as a fund of last resort to clean up mess that they can't / won't deal with themselves.

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Julian Stevens

Aug 27, 2013 at 17:50

I just discovered that Andrew Tyrie's undertaking that the Treasury [Select] Committee would be launching an inquiry into the [lack of] accountability of the FCA was in fact given in August 2011 rather than 2013.

The fact that since then things seem to have changed only for the worse paints, I think, a deeply depressing picture as to just how impotent the TSC really is in the face of the FSA.

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Knowledgable insider

Dec 02, 2013 at 11:31

Its about time this dopey Government revoked the ability of the FCA to act with impunity as it flies in the face of natural justice. If Cameron and Osborne cant understand that maybe its time for a different government!

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