We use cookies to improve site performance and enhance your user experience. If you'd like to disable cookies on this device, please see our cookie management page.
If you close this message or continue to use this site, you consent to our use of cookies on this devise in accordance with our cookie policy, unless you disable them.

Close
In association with

Home > Opinion > Jeff Prestridge

Arch Cru justice must not come at expense of advisers

Justice for Arch Cru investors must not sacrifice in its name only just those advisers who sold these investment funds in good faith.

By Jeff Prestridge | Published Jul 18, 2012 | Investments | comments

It will not be long – July 27 to be precise – before the country gets into full London Olympics’ overdrive with the start of the 30th Olympiad. For two weeks, the nation will forget that horrible thing called recession and urge its athletes onto medal success. London, no doubt, will be gridlocked as Olympics’ mania grips the City. I for one will be staying in the London Docklands for the fortnight and cannot wait to endure the trauma of the Jubilee tube.

For IFAs, especially some 795 firms who in the past recommended Arch Cru funds to some 20,000 investors, the start of the 2012 Olympics also marks another key date in their busy diaries. July 31, 2012 is the date by which submissions to the proposed £110m redress scheme outlined by the FSA must be made.

I trust that every single adviser who sold Arch Cru funds in the past and who is still trading finds the time to haul themselves away from the Olympics’ spectacle and submit their two-pennyworth.

Otherwise, there is a horrible danger that many good advisers who sold Arch Cru funds in good faith – and who still have the backing of their clients – will go out of business with little more than a murmur and with their reputations unfairly tarnished by the regulator. It is surely better to go down fighting than to expire with no more than a whimper.

Over the past year, I have done a lot of work on Arch Cru, especially in the aftermath of the initial £54m redress scheme that the FSA agreed with Capita, HSBC and BNY Mellon (separate to the £110m redress scheme announced this April).

As trustees and custodians of investors’ money, these three companies were meant to have safeguarded the financial interests of all Arch Cru investors but they failed to do so, leading to the suspension of the Arch Cru investment funds in March 2009 amid allegations of the misappropriation of fund assets.

The £54m redress scheme, the details of which were agreed behind closed doors, was rightly lambasted and for a time it stoked the fires of all who felt that investors were being short-changed.

I attended investor meetings organised by Regulatory Legal at which its outspoken Gareth Fatchett talked passionately about taking up the cudgels on behalf of Arch Cru investors (and Arch Cru advisers). But despite talking the talk, and doing some effective haranguing of MPs, Regulatory Legal made little progress and its quest for a judicial review fell on stony ground.

I also painfully watched Joe Egerton of Justice in Financial Review lose a high court battle for a judicial review into Arch Cru. And I sat back and watched MPs debate the Arch Cru scandal in the parliament, leading to the formation of an all-party parliamentary group on Arch Cru.

Although managing to meet both the FSA and Capita and while some of the all-party group, such as Conservative MP Alun Cairns, continue to seek answers from those involved in the Arch Cru scandal, the interest of most MPs has waned.

Financial justice for Arch Cru investors must prevail - but not by sacrificing those advisers who sold these investment funds in good faith

Page 1 of 3

COMMENT AND REACTION

Our Columnists

Hal Austin

Hal is editor of Financial Adviser and has been for more than a decade. He has previously worked on a number of local and national publications.

Ashley Wassall

Ashley is editor of FTAdviser and writes on all areas of retail finance. Previously supplements editor at Money Management and editor of a European private equity publication.

John Kenchington

John is editor of Investment Adviser and has written about investments for several years. He has worked at titles including City AM and was recently named in the MHP 30 To Watch list of up-and-coming media names.

Jon Cudby

Jon is editor of Money Management and has 12 years' experience covering retail personal finance. In 2005, Jon was launch editor of FTAdviser and most recently he was head of online content for Incisive Media's financial services titles.

Tony Hazell

Tony is a freelance financial journalist, having been editor of Money Mail at the Daily Mail for a number of years. He has been writing a column in Financial Adviser since 2005.

John Lappin

John is a weekly contributor to Investment Adviser with 15 years’ experience in financial journalism and 10 years writing on the IFA sector. He was formerly editor of an IFA trade magazine.

Most Popular
More on FTAdviser
FTA jobs