Advisory firm Essential IFA and Cofunds have settled out of court after the IFA firm looked to pursue a compensation claim through the small claims court, the platform has confirmed.
Cofunds confirmed to FTAdviser that one of Essential IFA’s clients wanted to make a £30,000 investment into his pension prior to the 2011/12 tax year, but failures by Cofunds resulted in the client’s money not being invested.
Cofunds acknowledged it was at fault and returned £30,000 to the client plus £15,000 as compensation for lost tax relief.
However, Cofunds refused managing director Peter Herd’s requests to compensate him £1,125 in relation to his client fee and a further £680 for additional time spent.
Mr Herd filed a claim with the small claims court, but he and Cofunds have now agreed to settle ahead of court proceedings. Neither Cofunds nor Essential IFA would disclose the amount paid.
A joint statement from the two parties said: “Essential IFA and Cofunds have come to a mutually beneficial settlement in respects to recent small claims court action. The deal between the two firms has been agreed on a no fault basis.
“Essential IFA has received assurances from Cofunds that customer service will continue to form an integral part of service agreements in the future.”