It looks as if we are approaching the end of the LCF debacle. The Financial Services Compensation Scheme has now paid over £114m worth of compensation to London Capital & Finance (LCF) bondholders.
The compensation was paid as part of the government scheme and represents 12,330 LCF bonds. It isn’t coming out of the usual pool and so will not fall on intermediaries, though some bondholders were controversially deemed to have received advice and may receive funds from the standard pools of FSCS money.
As FTAdviser writes: “These payments are processed as part of a government redress scheme which was launched in November and pays 80 per cent of bondholders’ principal investment in eligible bonds, up to a maximum of £68,000.
“But the amount of compensation due to individuals will be reduced if they have received interest on their bonds, distributions from the insolvency administrators Smith & Williamson or prior compensation from the FSCS.”
In this case, we have heard a huge amount about what went wrong at the regulator – the report from Judge Gloster showed a remarkably disjointed approach within the FCA.
Yet I wonder if we also need to ask questions about how exactly mini-bonds were ever able to have a mini-boom with mismarketing galore with some blame for that surely resting with the Treasury.
ReAssure has the dubious honour of being the most complained about life and pensions firm in the latest FOS figures in the decumulation category.
FOS received 326 new complaints against ReAssure between 1 July 2021 and 31 December 2021.
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