Cru Investor Meeting: advisers fear threat to their businesses

Advisers have explained how much they have to lose from the problems facing the suspended Arch Cru fund range.

Speaking to Citywire before the Cru investor meeting at the Hyatt Regency hotel in London this afternoon, Felixstowe-based adviser Paul Schwer of Paul Schwer Financial Services said the future of his business hung on the suspension of the Arch Cru fund range being handled properly.

‘If w don’t get this sorted out, it only needs one client to complain. It only needs that complaint to be upheld, it only needs the Financial Services Authority to determine that one complaint is a successful class action and we fold,’ he said.

‘We’ve got 35 clients in this and if you starts forking out 35 £5,000 excesses, that’s it. I and a lot of other IFAs just won’t be here,’ he added.

Schwer is personally invested in the fund and also has his mother’s money in the fund – he admitted the conversation with his mother has been ‘the hardest of the numerous conversation I’ve had to deal with.’

Shrewsbury-based adviser Tony Granger of Mentor Professional was critical of the levels of communication following the suspension on 13 March.

‘No-one has come forward and said “this is what it means” - this is why we’re here. Someone should have made a statement, be it Capita or whoever, saying, “look these funds have been suspended until this date, you can only redeem so much of the clients’ investment over a certain period.” Let them explain exactly what this liquidity problem is.’

Another IFA was puzzled at how, after completing the due diligence process with Cru, the funds could have arrived at their current position.

Have your say on the situation facing the Arch Cru funds in our blog debate and our revelation of the soft loans between the investment cells underpinning the funds and Cru Investment Management.