Baronworth Investment Services director Colin Jackson says he was in touch with the firm at the end of last week so the news came as a “complete surprise”.
He says: “The implications will be phenomenal if they’re not bought out and they cease trading. They were one of the biggest providers of structured products and they used to administer products for lots of other providers. Obviously, all those people do is change their administrators but will it cause a hiccup on payments?
“I would hope that someone steps in and buys them and makes sure that everything carries on as it should. But as a big-time company in this current climate, I don’t know.”
Tenet has issued an update to advisers regarding administration but says it is still analysing the extent of its exposure to Keydata.
Group distribution and development director Keith Richards says: “I think we were all expecting a few more surprises along the way but not knowing what they might be. This is obviously one of those things.
“But I’m not surprised that we don’t know about these things until they are announced. Most things like this are invariably kept confidential until the ultimate outcome.”
Lowes Financial Management managing director Ian Lowes says: “It surprised me to a degree. I’m looking forward to finding out the bottom line here.”
According to Lowes, any money invested in Keydata should be placed in a segregated account and not in the firm’s own business account.
He says: “As far as we are concerned Keydata are an administrator of plans on behalf of third parties and their own investment services arm. They don’t hold the cash, that goes off to the bank. In any case we have FSCS protection for any shortfall in that.”
AWD Chase de Vere senior manager Jason Walker says: “My main concern now with clients is whether there will be any delay with income payments or maturity payments.
“It was an absolute surprise, I really wasn’t expecting it. I would want to know if I was a buyer of a business how they got into administration. Why weren’t they controlling their costs?
“Their business should be fairly straight forward in terms of what your costs are and what your income is and therefore it surprises me that it came out of the blue like this that they are struggling especially because they are such a big player.”