View more on these topics

FSCS investment claims jump almost 80% in 2012


The number of compensation claims relating to failed investment firms has jumped 78 per cent over the last year with payouts for collapsed investment firms totalling over £105m.

The Financial Services Compensation Scheme has published its annual report for 2012/13 which reveals almost all the major claims against the investment intermediation class have been upheld.

The FSCS has paid out £29.6m in MF Global claims, £25m in Arch cru claims, £16m for spreadbetting firm Worldspreads, £6.5m for Pritchard Stockbrokers and £1.8m for Keydata.

The report also shows the number of new claims related to collapsed investment firms has gone up by 78 per cent from 6,899 in 2011/12 to 12,300 in 2012/13. Over the same period the uphold rate has gone from 81 per cent to 90 per cent, while the average payout for claims in the investment intermediation class has dropped from £16,467 to £9,488.

The FSCS has admitted it missed its target last year to decide on 90 per cent of claims within six months of a receipt of a claim, excluding those relating to savers in failed banks and building societies.

The FSCS decided on 84 per cent of other claims within the six month period, and says this was because many claims were complex and required further investigation and legal advice.

FSCS chief executive Mark Neale says: “Despite paying out substantial amounts of compensation in respect of Arch cru, Worldspreads and MF Global, our continuing work in managing the complex detail of the claims has meant that the FSCS has done less well delivering against some of our service standards than we would have liked.

“However we remain strongly committed to the six month delivery service standard for this sector and are doing everything we can to meet it.”

FSCS compensation table July 2013.jpg
Source: FSCS annual report 2012/13


Aviva warns charging ban fails to tackle ‘back-door’ payments

The Government’s draft rules to ban consultancy charging for automatic enrolment do not go far enough to tackle “back door” payments between providers and advisers, according to Aviva. Pensions minister Steve Webb laid out draft regulations before Parliament this week to implement the ban on consultancy charges for auto-enrolment, first announced in May. The draft […]


Gross’ Pimco Total Return sees $9.9bn outflows as investors flee bonds

Bill Gross’ Pimco Total Return fund was hit by a record $9.9bn (£6.5bn) in outflows last month as investors panicked over how the Federal Reserve’s eventual tapering of quantitative easing would affect the bond market. The fund, which is the largest in the world with assets under management of $268bn, has suffered during the heavy […]

Tax allowances and exemptions

Helen O’Hagan, Technical Manager at Prudential, looks into the planning strategies that can deliver considerable tax savings for your clients. Inheritance tax (IHT) Consider Margaret, featured on our Planning Matters family hub, who is a sprightly eighty year old with four children and several grandchildren. She’s recently been widowed and IHT planning is high on […]


News and expert analysis straight to your inbox

Sign up


There are 8 comments at the moment, we would love to hear your opinion too.

  1. It really does highlight the stupidy of these classifications when you see ‘failed investment firms’ includes spreadbetting punters and a product provider (Keydata) in there.

  2. Julian Stevens 4th July 2013 at 3:31 pm

    Yes, but most of these payouts weren’t in respect of claims, in the sense that people actually sought compensation. Rather, they arose from directives on the part of the FSA without anybody else’s views, let alone objections, having been accorded the slightest consideration.

    And, of course, the ArchCru and Keydata payouts would have been nothing like as bad had the FSA done its job properly and averted both train wrecks before they actually happened. Too busy concentrating on its RDR and beating up the IFA sector.

    The FSA and the FSCS seem to regard the industry in general and IFA’s in particular as a bottomless pit of money from which to compensate everyone and anyone for the failings of the former.

    We’re not an aggressive regulator, says the FCA, but cross us and we’ll squash you underfoot like some tiresome and inconsequential insect. There are plenty more where you came from. Errr, in case you hadn’t noticed, there seem to be rather less these days.

  3. There are plenty of IFA’s left who will pay for the mistakes of others, as always happy to pay up!

  4. Steve Barrett 4th July 2013 at 4:24 pm

    Anonymous @3:05pm

    Absolutely spot on re spreadbetting – what on earth has that got to do with the IFA sector. Next thing we know they`ll be including bookies in there, and we`ll be having to compensate gamblers for losing their £10 on the 3:45 at Kempton Park !!

  5. tyrone murphy 4th July 2013 at 4:29 pm

    When you see figures like this being quoted, you can understand why people join firms like St James’s Place where these costs would be covered.

  6. I know that there are many people desrving of compensation, but there are many more who make claims, who don’t and are lying.

    Would it not be fair to rename the FSCS/FOS combine “the Idiot’s Put Option” ?

  7. Missold Investments 5th July 2013 at 12:16 pm

    The figures would be much higher if FSCS were not actively discouraging such claims. We saw this with three of the Lehman-backed structured products (NDF June 2008, DRL Kickout and ARC 6). FSCS published a note to investors in Sept 2010 telling them not to bother claiming. A few months later, FSCS starting (quietly) paying claims for those same three plans, but only to those who pushed the case. Most affected savers don’t know about this.

  8. Again. Five companies quoted – none of which we have recommended and may have actually discouraged but we are picking up the bill. It doesn’t matter who is responsible it’s a disgrace.

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 advice.

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