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FSCS receives 78 claims against firm linked to collapsed DFM

FSCS receives 78 claims against firm linked to collapsed DFM

The Financial Services Compensation Scheme (FSCS) has paid out more than £100,000 in compensation related to an advice firm that placed client capital with failed discretionary fund management firm Organic Investment Management.

The compensation body has to date received 78 claims against Pensionology, of which 20 have been paid out at a total cost of £108,000.

Pensionology entered liquidation in 2017 and was declared by the FSCS to be in default on April 9, 2019.

It was one of several firms that placed client capital with Organic Investment Management, a discretionary fund manager that was told to cease all regulated activity by the Financial Conduct Authority in December last year over concerns about illiquid, potentially high-risk investments in its model portfolios. The company brought in administrators shortly after.

Philip Milton, an adviser and discretionary fund manager in Devon, bought Organic's client book in January this year, and has since been trying to extricate clients from what he believes are unsuitable investments, including unregulated offshore luxury property developments.

Mr Milton said some of these investors had previously been clients of advice firms including Pensionology and another business involved with FSCS claims, Leander Wealth. 

Leander acted as an authorised representative of Luddington Broze and later Bank House Investment Management. The FSCS said it is accepting claims against both principals, after Luddington Broze dissolved in early 2018 and Bank House Investment Management Ltd appointed liquidators on September 5..

Last month, after hearing Mr Milton's concerns, the FCA barred a claims management company from dealing with the clients of an advice company as it found there was a conflict of interest in relation to claims about investments with Organic.

The FCA barred Money Redress Limited, which obtained a temporary permission to trade as a CMC in April, from bringing claims on behalf of clients of advice company Pension Calculator Limited, which had worked with Organic and has now ceased trading.

The FSCS said it is now accepting claims against Pension Calculator's principal NJ Associates, although that firm has not yet been declared in default.

david.thorpe@ft.com