Reyker defends management of Merchant plans

Thousands of pensioners would have lost everything had Reyker not taken on the administration of structured products from failed provider Merchant Capital, a senior executive has claimed.

Adrian Barnwell, head of strategy and risk at the investment firm, said Reyker has fielded more than 12,300 IFA queries and 12,500 client queries between January and September this year, many of which were from people aged between 80 and 90 who were sold fixed-term products.

Despite critics in the industry claiming that the £75 administration charge imposed per plan on investors was unfair, Mr Barnwell said: “Had we not have taken responsibility, it may have come to a point where investors would have no other choice than to redeem the plan early.”

He was referring to a campaign initiated earlier this year by Ian Lowes, director of Newcastle upon Tyne-based Lowes Financial Management, who said in May that the hike in charges amounted to “unadulterated profiteering”.

However, Mr Barnwell defended the company’s position, saying: “This exercise has been profit dilutive. We have certainly not profited by taking on the administration. I will say no if I am asked to handle a similar situation.”

Mr Barnwell said Reyker has “produced a safe solution to a string of collapses”, which culminated in Merchant’s failure.

He added: “We have protected investment values of products that would otherwise have suffered badly under an insolvency process.”

Merchant Capital went into administration in January 2013, with Reyker, as custodian of the Merchant plans, instigating wind-up proceedings against the firm.

Reyker is understood to be in regular discussions with the FCA over its management of the plans.

Edward Archer, senior financial planner for Wiltshire-based Argentis Financial Management, said: “I had 12 clients affected by the Merchant collapse, and they are pleased that they are not having to deal with liquidators. The way in which the admin charges were announced was unfortunate but Reyker probably had no choice but to take that route.”