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FSCS pays out £750,000 over Harlequin IFA

FSCS ends up paying more than three-quarters of a million after FOS clears firm in overseas property investment complaints

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An advice firm that gave recommendations that helped clients invest in collapsed overseas property scheme Harlequin is responsible for more than three quarters of a million in Financial Service Compensation Scheme payouts to date.

Earlier this month, Money Marketing reported on numerous complaints over IFA firm Stuart Black Limited’s advice regarding investments into the unregulated scheme’s interests in the Dominican Republic.

While the Financial Ombudsman Service cleared adviser Stuart Black over at least four complaints seen by Money Marketing, including over recommendations to remortgage to access more funds to invest in Harlequin, the FSCS had begun payouts after opening up to claims in October last year.

FSCS and FOS in confusion over Harlequin IFA compensation

Data obtained from the FSCS shows that £751,094 has been paid out to date on 11 successful complaints – an average of more than £68,000 a claim. Two have been rejected while three are still in progress.

While the lifeboat fund is only able to pay out a maximum of £50,000 to anyone mis-sold investments, investors can reclaim 100 per cent of their losses where their retirement savings are held in insurance products.

Harlequin marketed and built overseas luxury property developments. Some clients invested in the developments using Sipps.

The Serious Fraud Office charged group chairman David Ames with fraud in February, and alerted clients who were advised to make Harlequin Sipp investments that, if their advice firm had gone bust, they could potentially claim on the FSCS.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Robert Milligan 26th July 2017 at 4:32 pm

    From our recent FCA bill it looks like we are individually paying around £3000 each per Investment Advisor towards the FSCS, please explain why the PI of these company’s who are defaulted by the Regulator seem to get off “scott free” As we also have paid a similar figure each for our on going PI, We then calculate the Burden for next year and accordingly increase our Advice Charge, Who is Paying!! Really !!

    • Julian Stevens 27th July 2017 at 2:20 pm

      The reason why the PI insurers are getting off “scot free” is almost certainly because their policies simply didn’t cover the sales of UCIS. Like so many other firms, Stuart Black Ltd didn’t think to check and, as usual, neither did the FCA.

      BTW, the title of this piece should be The regulated FA community have had to pay out, via the FSCS, £750,000 over Harlequin IFA.

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