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Ethical Financial advisers quizzed over commission

Creditors of Ethical Financial – the socially responsible inv-estment vehicle which closed its doors with potential investor losses of 1m – are quizzing advisers of the firm over commission payments.

Commission generated from sales made through the firm has been paid to a non-regulated firm called SR & JS Davies Limited which was set up by two former EF advisers.

Steven Davies, one of the directors of the firm and a former EF RI, says he agreed with EF’s management that commission be paid into SR & JS Davies Limited. He says he will pay back to EF’s liquidators any commission it is due but would not explain why the money was diverted to a different firm.

At a creditors’ meeting this week, law firm Financial Services Legal represented around 40 of the 70 shareholders who together invested almost 1m after being sold stakes by their advisers.

Financial Services Legal LLP solicitor Lisa Galloway says: “We are looking to appoint a liquidator to investigate what has happened to commission due to the firm and we will see whether investors were covered by an advice process which will decide whether the Financial Services Compensation scheme could become involved.”

Davies says: “The EF management signed a letter before Christmas to facilitate monies due going into the account at SR & JS Davies Limited. Whatever I have had in, I will pay my share to the liquidator.”


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