Your IndustryJul 3 2020

Adviser slams ‘aggressive’ CMCs as he bags client £52k

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Adviser slams ‘aggressive’ CMCs as he bags client £52k

An adviser helping clients navigate the Financial Services Compensation Scheme has criticised “aggressive claims-chasing companies” for circling round the investors.

Philip Milton, of Philip J Milton and Company, said he has been guiding clients who were placed into potentially illiquid and high-risk investments by the now-defunct discretionary fund manager Organic Investment Management Limited and the advice companies associated with it.

The Devon-based adviser and DFM, who has claims management company permissions, is directly helping about 20 ex-Organic clients claim for a small fee, but is sending information, links and step-by-step guides for free to all of the 1,600 Organic clients it inherited in January last year.

The company's most recent victory saw a client returned with the biggest cheque to date when £52,000 was recouped from the FSCS.

Mr Milton said: “Aside from a very small number of fortunate investors in 2018 whose transfers had progressed but no investments were bought, then almost without exception [ex-Organic clients] can claim compensation.

“Many clients have followed our simple, free guidance and have claimed directly, already receiving thousands of pounds from the FSCS.”

‘Parasitic’ CMCs

Mr Milton has urged his clients to avoid “parasitic CMCs”, which he says can take up to 48 per cent of the client’s payout.

He said: “If my client had gone to a claims-chasing company, it would have taken as much as £25,000 of the £52,000 pot for doing very little.

“Indeed, several clients have noted that a new spate of unsolicited contacts have started from these vulture-like organisations all keen to take their rightful compensation away from [them].”

Mr Milton said he was fighting with “aggressive” claims companies – from the “usual culprits” to “a barrister and his chambers” – who have cold-called investors and given the impression they needed to appoint legal assistance to secure their compensation.

He added: “It’s all so wrong. All [the investors] need to do in the vast majority of cases is to contact the FSCS, as almost all selling entities have been accepted as in default.

“Data protection does not seem to worry these CMCs, which hawk around lists of confidential information like there is no tomorrow.”

The numbers so far

The majority of successful claims linked to Organic have been made against the advice companies associated with the defunct DFM.

Pensionology UK and NJ Associates Financial Services are two of the companies which placed client capital with Organic and are the names that appear most often when managing the clients’ claims, according to Mr Milton.

More than £700m has been paid out against the two collapsed advice companies, the FSCS told FTAdviser.

The lifeboat scheme has paid out £533,000 for 58 successful claims relating to pension advice against Pensionology UK, which was declared in default in April 2019.

There have been 15 successful claims against NJ Associates, which the FSCS placed in default in January of this year, totalling a further £175,000. 

These claims related to personal pension transfers and self-invested personal pensions, the lifeboat scheme said.

The FSCS has received some 74 claims against Organic relating to Sipps, personal pension transfers, pension advice and portfolio activities, but has paid out just one claim – £1,800 for an investment portfolio claim – against the DFM so far.

imogen.tew@ft.com

What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.