Independent financial adviser Chase de Vere has posted a £11.6m loss for 2012, reflecting mounting legal costs in the company’s battle with the Financial Services Compensation Scheme over recompense for Keydata investments.
In its annual financial results for 2012 the company reveals it spent £14.3m on “exceptional items”, up from only £2.1m the year before.
This includes £13.7m for regulatory and litigation provision including the potential fallout of the Keydata legal battle with the FSCS, as well as £600,000 for the FSCS levy, £300,000 to cover the legal costs of defending against the FSCS claim, and £300,000 for potential payment protection insurance mis-selling claims.
After taking into account the exceptional items the company’s underlying profit was £3.2m compared to £3.4m in the previous year.
Last year, the FSCS sent claim letters to hundreds of IFAs in pursuit of those who recommended Lifemark-backed Keydata products.
Investors subsequently expressed frustration with the delayed response from the Financial Ombudsman Service in dealing with the Keydata claims.
In his report, director Gavin Chapman said: “During the year the group continued to build its defence against the legal claim received from a firm of legal advisers acting on behalf of the FSCS indicating their intent to pursue a claim against AWD Chase de Vere Limited, as one of a number of investment intermediaries, for recompense in respect of redress payments made by FSCS in respect of Keydata.”
Last month (19 June), Chase de Vere told FTAdviser sister publication Financial Adviser it hoped to recruit five new advisers, thereby swelling its ranks to 17 advisers in total.