Large numbers of Arch cru clients are likely to reject the £54m FSA compensation package and continue their fight against parties involved in the saga, according to Regulatory Legal.
The law firm says almost 500 of its 2,736 Arch cru clients have already suggested they are likely to reject the deal brokered last month between the FSA, Capita Financial Managers, BNY Mellon & Depository and HSBC Bank.
The regulator says the deal, when added to the distributions already paid and the value of the remaining assets, would give investors an average of 70 per cent of the net asset value of the CF Arch cru fund range when it was suspended on March 13, 2009.
Investors taking the compensation must agree it is in full and final settlement of any claims against the three firms but could still claim against their IFA.
Regulatory Legal partner Gareth Fatchett says: “The feedback that we are getting from investors is that they are unhappy with this cosy deal which they believe has let Capita and the FSA off the hook.”
There are fears that investors who take the compensation package are likely to claim against their IFA for the remainder of the lost assets in a move which could threaten a number of small firms.
Informed Choice managing director Martin Bamford says: “We are bound to see more IFA firms close on the back of this as investors accept the deal and then go straight after the IFA over the liability. In some cases, it will reach the FSCS and it is bound to have an impact on the levy at some point, it may not be this year but possibly the year after.”