With Exeter Fund Managers being put into administration, it is likely that the compensation scheme levy for this particular sector, which covers many fund managers including boutiques and some advisory businesses, will rise substantially.
The compensation scheme has said it will review the figure of 28m but managers will find themselves paying for others’ mistakes.
Whether it is a fund protecting pension-ers on the occupational side, part of the fund protecting clients of advisory busin-esses, or investors with fund management businesses there will always be strains.
Complaints are being heard that many fund managers have little to do with the splits’ failure and believe the amounts are unreasonable. They believe business and investment failure are being rewarded and suggest that the way in which ownership is structured within fund businesses means they are less able to shell out in such cases than, say, the insurance sector.
We have some sympathy. The system does put a strain on many businesses which have done nothing wrong but it is worse for IFAs. Perhaps the two groups should get together to put a case for replacement of the scheme. Product levy anyone?
An adviser’s place
Money Marketing this week offers a former IFA who has converted to being a St James’s Place adviser the chance to say why he thinks this is a good decision. This paper has always favoured independent advice while accepting that some advisers may have a business case for doing something else. The paper will not censor debate. If you disagree with Wai Man Cheung’s case for converting, we suggest you write and tell us why. The case for independence will not be weakened by being restated.