IFAs would, no doubt, have concerns about the general reputation of financial services from the problems facing mini-bond providers. Yet it is the fact that we know the FCA and FSCS may aim to provide compensation and make the regulated market pay for it – that may be of greater concern.
Another mini-bond provider Blackmore Bonds has failed to make interest payments to some of its investors. Some investors say they have not been paid despite assurances to Money Marketing from the chief executive that due interest payments would be made.
One detail that may concern IFAs is that Blackmore used Surge the same marketing consultancy used by LCF.
The FCA has suggested that advertisements from claims management companies leave a lot to be desired. The regulator reviewed more than 200 CMC advertisements. Many suggested much higher average amounts of compensation than would generally be available. We can be pretty confident that CMCs are not enjoying their newly regulated status.
There does seem to be an incredible amount of fraudulent activity currently blighting the market.
This is grim. A few weeks’ back we discussed the sad and sorry tale of stockbroker SVS being prevented from doing business by the FCA with very poor practice in terms of transfers and very high charges.
Now it appears that fraudsters are targeting the firm’s clients with the administrators issuing an warning to avoid scammers posing as white knights. I think the FCA are under-resourced to deal with this whole horrible range of scams and fraud.
A.J. Bell says that transfers surged partly due to the big increase in transfer values in the three years after the pension freedoms, information it has obtained from the FCA using a Freedom of Information request. It argues that this shows the market working. The debate continues.
Woodford Investment Management will not disclose any of its holdings for now top ten or otherwise – a significant departure from its previous policy - as the fund remains closed for at least another 28 days.
