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Strange tale of rugby stars, an SJP firm and the FSCS

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Strange tale of rugby stars, an SJP firm and the FSCS

A firm which counted high profile rugby stars such as Jamie Roberts, among its clients, has been declared in default by the Financial Services Compensation Scheme (FSCS). But with the directors now operating a senior partner firm at St James's Place (SJP) the case raises questions about how ongoing liabilities should be dealt with.

Cardiff-based Castle Court Consulting stopped trading in 2012.

That same year two of the firm’s former directors, Andrew Booth and Jack Price, joined SJP under a new firm called Castle Court Wealth Management which is registered to the same address as the old firm Castle Court Consulting was.

Since 2012, working as an appointed representative of SJP, Castle Court Wealth Management rose to the rank of a senior partner practice at SJP and amassed high profile clients including Welsh rugby star Roberts (pictured).

However last week the FSCS declared the old firm Castle Court Consulting in default. SJP said the FSCS's declaration was only driven by one claim resulting from Sipp advice given in 2008.  

Yet since 2012 the Financial Ombudsman Service (FOS) has published four upheld FOS decisions against Castle Court Consulting – three of which were over unregulated collective investment schemes (UCIS).

When contacted a spokesman from SJP said after Castle Court Consulting stopped trading in 2012, SJP worked with the firm to resolve ‘a very small number of complaints’ raised after 2012, ‘during the period that Castle Court Consulting Ltd remained an authorised firm and the adviser concerned is no longer with the business’.

These FOS complaints were settled by Castle Court Consulting, which became de-authorised by the FCA at the end of 2015.

However when a new complaint was raised at the end of last year this pushed the firm into default.

‘The [FSCS] notice follows a claim being upheld, which was made against Castle Court Consulting Ltd on advice provided on a Sipp in 2008.  As a result, the company, which has not traded under this name since 2012, has been declared in default by the FSCS,’ the SJP spokesman said.

‘The claim relates to advice provided prior to the practice becoming a part of the SJP Partnership, and was not raised by the complainant until late 2017.’

At the time of writing Castle Court Consulting has not been wound up. But in its latest accounts from 2016 it says after the FOS found in favour of it in two ongoing claims it has re-authorised itself with the FCA.  As such ‘any claims in relation to the company that were lodged since de-registration will be dealt with and settled by the FSCS’, the accounts said. 

Rugby links

Castle Court Wealth Management has amassed a number of links with Welsh rugby players over the years. In an interview with the Sunday Times in 2013, rugby player Roberts, who has 94 test caps for Wales, said he uses Castle Court Wealth Management as his adviser and he has a testimonial to the firm on its website.

In that same Sunday Times interview Roberts said he has invested in a Sipp ‘that is biased towards sustainable energy and ecological companies such as Elysian Fuels’.

Elysian Fuels is a biofuel investment scheme which has been probed by HM Revenue & Customs (HMRC) with the Revenue issuing Sipp providers with bills over the tax relief claimed on the investment. HMRC petitioned the winding up of Elysian Fuels LLPs which took in funds from investors as part of the scheme in 2016.

When asked by New Model Adviser® if Roberts invested in Elysian Fuels following advice from Castle Court Wealth Management, a representative of the rugby player declined to comment.

As well as Roberts, Castle Court Wealth Management lists Martyn Williams, who was the third player to win 100 caps for the Welsh rugby team, among its team.

According to the firm’s website Williams is working as an ‘an introducer for Castle Court [Wealth Management] while completing his financial advice qualifications’.

Citywire view

In 2017 SJP contributed £18.9 million to the FSCS levy on all advisers, the most of any advice firm. Clearly it pays its fair share towards the total levy and without this contribution IFAs would be forced to pay much higher amounts themselves towards the levy.

In this story it may have only been one claim which prompted the firm, Castle Court Consulting, to go into default and it is unlikely to have a big impact on the total levy.

However in order to move to a place where FSCS levies come down, and in which IFAs and SJP alike view the scheme as operating more fairly, the system needs to change. We have argued before that SJP is in a better position than any firm to press for meaningful reform of the FSCS (When will the SJP cavalry ride in to force FSCS reform?).

An odd feature of this case is that a handful of claims were dealt with by the FOS, rather than FSCS, up to a point. It is not clear who decides where and when to draw the line.

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