The Financial Services Compensation Scheme (FSCS) has declared nine adviser firms in default.
The firms include Wiltshire-based Heather Moor & Edgecomb which made headlines in 2008 for its legal battle with the Financial Ombudsman Services (FOS), and two firms the scheme has been pursuing over their sales of SLS-backed Keydata policies.
A & J B and Thorn Financial Management appeared on the list of firms being chased by the scheme’s lawyers Herbert Smith, for £31,948 and £56,315 respectively, as the FSCS sought to recover compensation paid out in relation to the sale of SLS-backed Keydata products.
Heather Moor & Edgecomb hit the headlines for its ongoing battle with the FOS over £1,440 in case fees to deal with complaints from customers.
In 2008 Brian and Dolly Pickering of Heather Moor & Edgecomb took their case to the Court of Appeal arguing they should not pay the case fees as the complaints were rejected by the FOS.
In 2010 they were given the green light to take their grievances against the FOS to the European Court of Human Rights.
The same year the pair sold Heather Moor & Edgecomb's client bank to IFA consolidator Buckles, now called Sanlam Private Wealth.
Also on the list was Peterborough-based Rockingham Independent, which was declared in default on 1 November having entered liquidation earlier this year after a series of complaints over its sale of troubled life settlement fund ARM, in which 800 clients invested £40 million.
The 10 IFA firms declared in default are:
- Financial Advice Bureau (Middlesbrough)
- A & J B
- Howard Scofield Independent Financial Advisor
- Rockingham Independent
- Dickeson Taylor & Company
- Heather Moor & Edgecomb
- MI Financial Services
- Thorn Financial Management
- Alasdair MacNab
- Macmillan Financial Services
Before the FSCS can declare a firm in default it has to have received at least one claim and has showed that it is unable to pay claims against it.
The scheme has already started paying compensation in respect of these firms.
Consumers are entitled to up to £50,000 from the FSCS if they have lost money as a result of their dealings with the investment firms.