The director of law firm Regulatory Legal said: “We received a lot of enquiries when Honister first happened. We had 143 inquiries in total, most for high-risk investments.
“The Financial Services Compensation Scheme issues claim forms usually after default has occurred. The problem for third parties is the time it takes to issue defaults in more complex cases.
“We have received inquiries from investors with unregulated collective investment schemes, primarily. The numbers will accelerate now that Honister is in default.
“All of the advisers signed a clear indemnity against giving poor advice. It will be interesting to see whether the FSCS seeks to recover any payments.”
His comments came as Grant Thornton, the administrator, and the FSCS announced that the three former Honister Capital firms, Sage Financial, Honister Partners and Burns Anderson, have all been declared in default.
A statement on the FSCS website said: “Sage Financial, Honister Partners, and Burns Anderson, and those claimants who were clients of the appointed representatives – including those who previously had their claim rejected – are now being asked to contact the FSCS so that their claim can be reconsidered.”
Grant Thornton has confirmed that Ucis sales were carried out by the appointed representatives of Honister Capital.
The FSCS statement added: “Any customers of these firms who believe that they were mis-sold a Ucis investment should also contact the FSCS to make a claim.”
Last October Grant Thornton released details of a shortfall in assets available to the collapsed company’s creditors. It stated there was a deficit of £4.6m between all Honister assets and those owed money by the firm.
Honister Capital went into administration on 3 July 2012, citing a failure to secure adequate professional indemnity insurance.
Adviser View
Chris Hannant, policy director of the Association of Professional Financial Advisers, said: “Given where we are, there has already been a long time for people to think about the implications of the Honister collapse.
“I hope this announcement does not mean a slew of new claims. I do not see how the declaration of insolvency would generally launch a series of claims. The FSCS would have been aware of claims potential, and I would hope the FSCS has already factored this into the FSCS levy.”
A spokesman for the FSCS said: “The potential costs for Honister Capital were covered by the claims forecast for 2013/2014.”
