National IFA Chase de Vere made an £11.2m pre-tax loss for 2012 after setting aside £14.4m to cover the costs of its Keydata legal battle and compensating clients sold Arch cru and payment protection insurance.
Its accounts for the year to 31 December, published today, show Chase de Vere incurred exceptional costs totalling £14.4m last year, including £700,000 for Arch cru redress, £300,000 for PPI compensation, and £600,000 for the firm’s FSCS levy for 2012/13.
The company is also involved in a review, started by the FSA in 2011, relating to “certain regulatory matters”. Chase de Vere declined to explain the nature of the review but has seen fit to reference it as part of the firm’s potential future liabilities.
Chase de Vere is expected to be named one of the lead defendants in the FSCS’ legal case to recoup compensation paid to investors from advisers who recommended Keydata.
The extent of the legal costs and the uncertainty over the case’s outcome has seen Chase de Vere secure a letter of support from parent company Swiss Life to vouch that the company has enough funding to continue to operate.
The £300,000 set aside for PPI redress relates to liabilities inherited from a business that used to be part of Chase de Vere, but has since been sold on.
Chase de Vere made a pre-tax profit of £1.3m in 2011 and recorded exceptional costs of £2.1m.
Chase de Vere chief executive Stephen Kavanagh says: “We have previously acknowledged the impact which some legacy issues could have on our short-term profitability. In line with this we made a provision in 2012 to provide for a number of such legacy issues and associated legal costs.
“We believe our company is incredibly well positioned to be successful.”