In a letter to investors, Reyker Securities said it will levy fees that could be more than double the previous amount after it instigated winding-up proceedings for Merchant House Group last month.
The problems in relation to Reyker Securities Plc and Merchant Capital affects an estimated 12,000 private investors. Many of these clients originally invested with the collapsed firms Keydata, Arc Capital as well as Merchant Capital and Merchant House Group Plc.
Terms and conditions established by Reyker when it took on the business allow for charges to be imposed if Merchant House Group can no longer meet ongoing administration and custody costs.
The minimum fee for a ‘typical’ investment will be £75 a plan, but an extra £115 will be charged a year if the product is a capital accumulation plan and £195 a year if it is a monthly income plan.
Adviser view
Ian Lowes, director of Newcastle upon Tyne-based Lowes Financial Management and founder of structuredproductreview.com, said: “It seems Reyker is now seeking to charge clients what seems to be significantly more than double what they were originally going to receive from Merchant, and as much as £600 per investment, even if the investment is a simple Isa product. This should not be permitted. If nothing else, it is surely not treating customers fairly.”
When the question of TCF was put to the company, Reyker Securities did not respond as at time of going to press.
