The Financial Services Compensation Scheme has declared 16 investment and pensions advisory firms in default, including one liable for losses in relation to the Arck investment schemes.
A declaration of default means the FSCS is satisfied a firm is unable to pay claims for compensation made against it, paving the way for customers to call for cash.
The latest list includes Nottingham-based HD Administrators LLP, which back in March 2012 had a supervisory notice issued to it by the Financial Services Authority stating it lacked competent and prudent management as its two approved persons, Kathryn Clark and Michelle King were not fit and proper.
Later that year, the Serious Fraud Office confirmed it was working together with Nottinghamshire Police and the FSA to investigate allegations of serious fraud in relation to Arck and HD Administrators.
In October 2015, Ms Clark, who was also a director of Arck, was found guilty of fraud in relation to the scheme and given a two-year suspended sentence, along with fellow director Richard Clay, who was jailed for 10 years for his part in what the SFO branded “an elaborate scam”.
By then it had been revealed by The Insolvency Service that the “vast majority” of schemes in the HD Sipp might not be able to recover funds, due in part to a £12m gap in bank statements, and the FSCS stated it was considering paying compensation for clients.
Last September, the FSCS said it was satisfied that HD Administrators was liable for losses in relation to those schemes held in the HD Sipp.
So far it has upheld 49 claims against HD Administrators totalling £1.8m.
Elsewhere on the list, an IFA who teamed up with a former premiership footballer has also been declared in default.
Back in 2009, Kevin Neal Associates formed a business with Rob Lee, former midfielder at Newcastle United to try to offer naive young footballers more reliable independent advice.
The pair formed Fortress Wealth Management - not in default - with the company split equally 50/50.
The rest of the list was as follows:
There were two London-based investment advisers; Barton Financial Planning and Portland Financial Management.
In the Midlands, for life and pensions there was Newcastle under Lyme-based ASC Financial Management Limited; Worcester-based D&R Stern; Edstone-based Decifa and Birmingham-based Shields Financial Services. On the investments side, Solihull-based Broadstreet IFA - formerly David R.Greening & Co. - and Dallington-based Davenport Curo - formerly Fisher Financial.
In the north east, Harrogate-based investment adviser KFS Holdings was found in default, while in Scotland, it was Edinburgh-based Croft An Rie 2013 - formerly Graeme P Chatham.
In the south east, life and pensions advisers Morris Forshaw from Maidstone and Regency Financial Resources in Hassocks, joined investment firm Geco - formerly SR Financial Management - which was also based in Hassocks.
Finally, in the south west of England, life and pensions adviser Dominic James Barry from Weston Super Mare was also declared in default.
peter.walker@ft.com
