The Financial Conduct Authority described Reyker Group’s handling of Merchant Capital investors as “fair and honest”, the group’s chairman said yesterday (12 November).
Reyker began working with Merchant following the Financial Services Compensation Scheme placing former custodian Pritchard into administration in March 2012.
Merchant Capital and, subsequently, Merchant House failed to pay administration fees relating to its book of structured product plans and subsequently Reyker became the custodian of the plans.
However Reyker was criticised for its original charging structure, whereby investors were to be hit with up to £600 in fees, despite these costs having been included within their original purchase price. This was changed in January 2014 to a 1.5 per cent cap for all plans.
During a panel debate at the Tisa annual conference when Adrian Barnwell, chairman of the management board at Reyker, was asked about criticism of his firm’s handling of Merchant Capital investors, he said: “What we did as a custodian firm is save customers of other firms that collapsed through their own mismanagement.
“That is something that has been looked into by the regulator that concluded what we did was helpful for consumers, fair and honest.”
Last year, the Financial Ombudsman Service rejected two complaints over fees charged by Reyker when it took over as Merchant Capital’s custodian.
In the decisions, ombudsman Philip Roberts tells the investors that as Merchant is in administration they may be best served taking their claim to the FSCS. Reyker itself has previously said investors may not have recourse to the scheme because the plans have not failed.
The FCA was not available for comment at the time of writing.
emma.hughes@ft.com
