Financial Services Compensation Scheme  

FSCS receives claims against failed trustee

FSCS receives claims against failed trustee

The Financial Services Compensation Scheme has started to receive claims against a trustee which allegedly failed to carry out sufficient due diligence on unregulated investments.

To date the lifeboat scheme has received 285 claims against Highpoint Trustees, formerly known as Citadel Trustees.

Of these, 256 claims are in progress and 27 have been unsuccessful, while scheme has paid out about £30,000 to two claimants.

The majority of claims (197) are for unregulated collective investment schemes.

Highpoint Trustees defaulted with the lifeboat body earlier this year (May 18) after being dissolved in September.

Claimants alleged that Highpoint Trustees failed to carry out sufficient due diligence in respect of non-standard investments for which the firm acted either as trustee or escrow agent.  

In February, the FSCS said it had started assessing sample claims related to investments in Sustainable AgroEnergy, EcoPlanet Bamboo, Merco Bonds, Forest Lakes, Global Forestry Investments and Eco-Synergies.

The industry has seen its FSCS levy skyrocket in recent years due to firm failures and rising claims in the pensions and investments market.

Back in January, the lifeboat scheme had forecast its levy for the year to be £1.04bn, which was a jump of 48 per cent on last year’s total.

But the FSCS cut this by £206m to £833m earlier this year, as it expects firm failures and some claims to be delayed over the next few years.

Advice firms are expected to contribute £240m to the levy. This is the same as last year, due to the fact the class is forecast to breach its funding limits for the second year in a row.

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