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Fund management chiefs call for Keydata inquiry

Fund management chief executives have called for an independent inquiry into the failure of Keydata to avoid similar failures in the future.

Chief executives including Cazenove Capital Management’s Andrew Ross and Rathbone Brothers’ Andy Pomfret have signed a letter published in today’s Financial Times calling for a Keydata inquiry to be set up.

Other signatories include Hargreaves Lansdown executive director Peter Hargreaves, Brewin Dolphin Holdings executive chairman Jamie Matheson, Charles Stanley Group chairman Sir David Howard, Fleming Family & Partners chief executive Mark Davies, Smith & Williamson chairman Gareth Pearce, and Vestra Wealth managing partner David Scott.

The letter says the investment management industry supports the general purpose of the Financial Services Compensation Scheme.

But it adds that there are concerns about the £326m industry levy, mainly to pay for claims relating to Keydata unit Lifemark, and how it has been allocated.

The letter says: “It is in the interests of consumers, clients, our industry and our indeed our regulators that lessons regarding Keydata’s failure are learned. We therefore urge the setting up of a full and independent inquiry to establish what happened and how it can be avoided in the future.

“With regulatory robustness and reform currently at the top of many agendas it seems appropriate to explore whether improvements might be made in the light of a well publicised failure; an independent review of the circumstances surrounding Keydata’s collapse would help to inform this.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. There is no substitute for effective supervision, an ability to spot ‘trends’ early on and the the gumption (inc. powers and tools?) to move quickly.

    To date the regulators have had limited resources aimed at perceived risks, they haven’t had the correct tools for the job nor have they employed people with ‘native’ intelligence. They are like bomber pilots, they never see the full scale of the damage caused because they are too far away from the action.

    Unfortunately I don’t see much change happening under the FCA, I may be wrong but the future of regulation doesn’t look too clever, if Mike Fenwick says it isn’t going to work then I will agree wholeheartedly.

    This should be built from the ground up.

  2. @Evan

    Effective regulation of retail financial advice can only be achieved from the cornerstone laid down by the IFA sector. We have proven, time and time again, to be the best defence against industry greed and malpractice. The depth of knowledge, experience and understanding available from the best we have would be invaluable to a forward thinking, open minded regulator.

    I can but dream.

  3. Simon

    Same hymn sheet, slightly different key.

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