There has been some upheaval this week as turbulence in Westminster led to the proroguing of Parliament, court rulings and Boris Johnson’s sixth defeat in the commons.
Things fared little better for advisers, however, as claims against a collapsed advice firm reached more than £23m and one firm landed in hot water with the ombudsman service over a platform switch. It’s time for the week in news.
1 Platform problems
This week FTAdviser reported an advice firm had been forced to compensate a couple whose pension pots and Isas were moved onto a new platform which they could not access.
The Financial Ombudsman Service ruled in the clients’ favour after they complained Pharon Independent Financial Advisers had not explained the move would mean they were unable to access the portfolios themselves.
The firm argued the key features document had explained the platform was adviser access only and that the clients had not transferred all of their Isa funds, which Pharon had taken to mean they wanted some funds accessible and some left managed by the firm.
But the Fos said Pharon had changed the couple’s access arrangement without their instruction and the firm held responsibility for this, ruling the firm to compensate for the transfer fees, 8 per cent interest and £200 for the trouble.
2 Claims upon claims
A mighty £23.3m has now been paid out by the Financial Services Compensation Scheme on claims brought against collapsed adviser Financial Page.
According to the lifeboat scheme, this figure was comprised of 853 upheld claims — out of the 1,062 reported — against the firm, which entered administration in July 2014 after being found to have given unsuitable pensions advice.
One adviser, Neil Liversidge, managing director of West Riding Personal Financial Solutions, recently helped one of his clients claim back £21,500 in compensation.
In further claims news data from the Fos showed St James’s Place and Sesame again topped the list of most complained about adviser firms in the first six months of this calendar year, but the ombudsman had to apologise to SJP for incorrect data published on its website regarding its uphold rate.
3 Up the tax
A think tank urged the government to hike the rate of capital gains tax to match income tax levels, arguing the move would increase revenue for the government by £90bn over five years and create a fairer system for taxpayers.
But advisers branded the suggestion a “poor move” which would act as a disincentive for savers.
Alan Chan, director at IFA Wealth & Pensions, added taxing income and investments at the same rate would ignore the level of risk taken for the investor.
4 Please sir, can I buy your space?
Fraudsters reared their heads into the car park market this week as administrators warned scammers were targeting investors who had opted for one of four car park investment companies now in administration.
Investments in the car parking schemes — Park First Freeholds, Help Me Park Gatwick, Park First Glasgow Rentals and Park First Gatwick Rentals — were sold to individuals and corporates in the UK and internationally, both directly and through Sipps.