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£140,000 Claims on FSCS for Kilminster

The Financial Services Compensation Scheme has received claims amounting to an estimated £140,000 from clients of Kilminster Financial Management Limited, which went into liquidation last July. The FSCS says it has received 11 claims so far, after the company was declared in default on January 6.

The FSCS says: “The claims we have received have an estimated value of just over £139,000. As it has just been declared, we will now start the process of paying out claims.”

Last July, KFM advisers called for an investigation into a deal made with A2O. In January 2008, the majority of KFM’s 30 advisers moved to A2O in a deal that saw KFM receive £150,000.

At the same time, Kilminster Financial Management chair- man Malcolm Kilminster sold his own business to A2O for £265,000, with a further £50,000 to be paid after six months and 12 months.

Under the terms of the deal, any residual income in KFM would pass to Kilminster’s own practice if KFM ceased trading. At the time, shareholders in KFM expressed anger at the deal, believing it did not represent good value for the company.

A letter sent out to creditors in July by liquidator BN Jackson Norton blames two compensation claims, understood to amount to around £300,000, for the company having to go into liquidation, as well as key advisers leaving and the increased burden of regulation.

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