Merchant Capital clients start to get FSCS cash

The Financial Services Compensation Scheme has declared 12 authorised and formerly authorised investments and life and pensions in default, meaning they are unable to pay claims for compensation made against them.

On the list was London-based Merchant Capital Limited, formerly known as Merchant Capital Plc, the structured products business that went into administration at the start of last year.

This presaged the collapse of parent company Merchant House Group, which was the subject of winding up proceedings initiated by Reyker.

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The firm began working with Merchant following the Financial Services Compensation Scheme placing former custodian Pritchard into administration in March 2012.

Merchant Capital and, subsequently, Merchant House failed to pay administration fees relating to its book of structured product plans and subsequently Reyker became the custodian of the plans.

FTAdviser later revealed in April 2013 that these investors were to be hit with up to £600 in fees, despite these costs having been included within their original purchase price. This was changed in January 2014 to a 1.5 per cent cap for all plans.

Other investment and life and pensions firms that were declared in default were:

• West Yorkshire-based Ian Brining & Associates, formerly known as Ian Brining & David Meakin Independent Financial Advisers;

• Warrington-based Langmore James Associates Limited;

• St Albans-based PIFA Limited, trading as Bluebond Investments;

• Clevedon-based Aston Court Chambers;

• Bristol-based Mirage Asset Management;

• Salisbury-based Radley Financial Consultancy;

• Halesowen-based TE Woodward & Co;

• Brighton-based Johnson Gower Financial Planning Limited;

• Midlothian-based Ian L. Maclean and Company Limited

• Caldicot-based Robert Kenny Associates

• Swansea-based Tawe Associates (Mortgage & Financial) Limited.

Mark Oakes, head of communications for the FSCS, said: “We have already started paying compensation in respect of these firms.

“However, we are encouraging anyone who has not been contacted by us and believes they may be owed money as a result of their dealings with any one of these firms to get in touch with FSCS.”

Update 29 May 2014: The article has been updated to clarify Reyker became custodian of the plans and did not take on the Merchant Capital book, as well as the change in investor charges.