A wealth management firm which went into administration after losing a court case brought by a client is among the eight firms declared in default by the Financial Services Compensation Scheme.
Full Circle Asset Management, based in Kent, entered administration in December 2017 after being ordered by a court to pay damages to one of its clients because it had failed to apply stop losses as agreed, and failed to keep its client in assets appropriate to their agreed risk profile.
Now the compensation scheme has declared the firm in default, meaning any claims against Full Circle will be paid from the levy which financial advisers contribute towards.
On top of this, a Welsh IFA firm which the Financial Conduct Authority told to immediately stop all pension-related business is also among the firms declared in default.
Last year it emerged Strategic Wealth UK, based in north Wales, was subject to a review carried out by an independent skilled person so the FCA could be sure the firm had "robust" systems and controls.
Among the other firms declared in default were Bromsgrove-based Intelligent Financial Planning, Wales-based Stanley R Rogers Financial Services and Wigan Mortgage & Investment Centre.
Alex Kuczynski, director of corporate affairs at the FSCS, said: "FSCS steps in to protect consumers around the UK when authorised financial services firms go bust. This vital service, which is free to consumers, protects your deposits, investments, home finance and insurance.
"We want anyone who believes they may be owed money as a result of their dealings with any of these firms to get in touch as we may be able to help you."
David Rocker took Full Circle to court after his £1.5m investment fell by more than 50 per cent, alleging the losses were caused by the firm's breaches of the contractual terms over how it managed his money.
Mr Justice Morris found in favour of Mr Rocker on both of his claims.
It later emerged the Financial Ombudsman Service had around 25 complaints waiting to be handled in relation to collapsed wealth management firm Full Circle.
With regards to Strategic Wealth, the FCA placed asset retention restrictions on the firm, meaning it cannot dispose of, deal with or diminish the value of its assets without the regulator's consent.
Strategic Wealth, which is now in liquidation, claimed to have a team of specialist offshore advisers which can advise on Qrops, Qnups and offshore lifetime annuities.
The FCA did not say whether its action related to Strategic Wealth’s overseas pensions activities.
damian.fantato@ft.com
