View more on these topics

Advisers and investors in line for Keydata payout


Advisers, investors and fund managers are in line for a payout from the Financial Services Compensation Scheme following recoveries made from the Keydata Lifemark investment vehicle.

The FSCS has been pursuing recoveries from the Lifemark plans and has announced an initial distribution of 7.5p in the pound will be paid, starting next month.

Further distributions are expected next year which will take total returns to between 12 and 15 per cent of the money invested.

The FSCS has refused to disclose the total amount of Lifemark recoveries it has secured so far and how much advisers, investors and fund managers are each likely to receive.

In its plan and budget in February, the FSCS said it expects total Keydata recoveries of around £75m over the next two to three years.

Keydata invested customers’ money in around $605m of bonds issued by Lifemark, which in turn invested in US life settlement policies.

Keydata was put into administration in June 2009 and Lifemark was placed into “provisional administration” in November 2009.

To date, the FSCS has accepted around 16,000 claims from investors in the Lifemark plans and paid compensation of around £228m.

The FSCS has set out how it will allocate recoveries, which will see advisers receive a refund of some of their FSCS levies, as the cost of pursuing recoveries was allocated to the investment adviser sub-class.

Keydata investors whose FSCS claims were capped at £48,000 will also receive their share of recoveries. The FSCS has devised a formula to calculate payments for Keydata investors who have been left worse off by accepting FSCS compensation early rather than waiting for future recoveries.

The industry was hit with a £326m interim FSCS levy in January 2011, mainly to cover the cost of compensating Keydata investors.

Advisers had to pay £93m towards these costs while fund managers paid £233m.

The FSCS says where recoveries relate to compensation paid from the 2010/11 interim levy, net recoveries will go to fund managers first as fund managers were cross-subsidising advisers’ levies.

It aims to make initial distributions to investors by the end of June and distributions to advisers and fund managers by the end of October.

Yellowtail Financial Planning managing director Dennis Hall says: “This is a better position than we were in a couple of years ago and it is good to see the FSCS is shelling out. But whether it is 7.5p in the pound or 15p, this is still a drop in the ocean.”

The FSCS is separately pursuing advisers who recommended Keydata products via ongoing legal proceedings.



Aldermore to start lending in Scotland

Aldermore will start lending on residential and buy-to-let properties in Scotland next month. From 10 June, brokers in Scotland will have access to the lender’s entire product range. Aldermore head of distribution for Scotland Steve Carruthers, based in Linlithgow, will be available for broker support. Managing director of residential mortgages Charles Haresnape says: “We are […]


Cofunds chairman Charlie Eppinger steps down as L&G completes acquisition

Cofunds chairman Charlie Eppinger has stepped down and retired from the Cofunds board following the completion of Legal and General’s acquisition of the platform. In March, L&G announced it was acquiring the 75 per cent share capital of Cofunds it did not already own, for a cash consideration of £131m. The acquisition valued Cofunds at […]

Friends Life recruits new head of longevity

Friends Life has appointed Neil Robjohns as head of longevity. Robjohns joins the provider from Barnett Waddingham, where he provided specialist support through longevity-related advice, tools and research. Prior to this he was head of pricing at Munich Re. Robjohns will report to Friends Life retirement income managing director David Still. Still says: “Neil brings […]


Govt exempts offshore investors from platform rebate tax

The Government has moved to exempt offshore investors from paying tax on platform rebates. From 6 April, all platform rebates to investors have been taxable following an HMRC ruling in March. But in a written ministerial statement yesterday, Treasury economic secretary Sajid Javid said taxing offshore investors could affect the UK’s competitiveness. The Government has immediately reversed […]

Embrace simplicity!

By Fiona Holmes, proposition communications manager When I first took out critical illness cover, I was overwhelmed. It wasn’t just the form filling, it was finding out about the sheer number of illnesses I was covered for. Did it give me peace of mind that I was covered for neuromyelitis optica or systematic lupus erythematosus? […]


News and expert analysis straight to your inbox

Sign up


There are 4 comments at the moment, we would love to hear your opinion too.

  1. I wonder if any monies received will be accepted by other institutions without jumping through multiple hoops as being ‘tax-free’, because it was when it was initially invested.

  2. So the FSCS won’t disclose how much they recovered. I’ll bet they won’t.

    So of every £100 the best estimate is £15 returned. It is therefore not too difficult to make a stab at how much they recovered:

    £100- £15 = £85
    So let’s say 25% is lost.
    That leaves £60 (total recovered about £75)
    £20 for FSCS costs
    £20 for the liquidators
    £20 for the lawyers.

    So 60% went in expenses. Dear FSCS please prove me wrong.

  3. Alistair Paterson 22nd May 2013 at 10:28 am


    Don’t be so unkind. They have all their final salary scheme benefits and congratulatory retirement packages to pay for.

    They’re not a charity, you know.

  4. Harry is completely wrong on this.
    The Trustee who now has custody of the Lifemark assets has reported he expects to finally realise 12 – 15% of the amount originally invested. I believe the FSCS is going to distribute any amounts investors are due them for nothing.
    It always amazes that IFA’s moaning about Keydata issues generally have crucial aspects of the saga completely wrong.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm