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IFA firm Mandrake defends itself against FSA public censure

Mandrake Associates Limited has defended itself against the FSA public censure it received this week claiming it was acting in the best interests of clients and has saved the Financial Services Compensation Scheme millions of pounds.

Managing director John Pirie says former parent company Hambro Countrywide, now Balanus, retained responsibility for the pension review when Mandrake completed a management buyout in 1996.

MAL took Hambro Countrywide to court when it failed to conduct the pension review and was successful in the first instance, and also won an appeal by HCW.

Pirie says: “The effort involved in prioritising the court case and the pensioners delayed the processing of payment of endowment complaints awards.”

The FSA imposed a public censure on the firm this week for “serious failings” in the way it handled mortgage endowment complaints.

The regulator found that MAL failed to ensure its endowment complaints handling procedures were operating effectively, finalise complaints within a reasonable time and provide complainants with updates about the progress of investigation in a timely fashion.

Pirie added that the FSA’s decision to withdraw the company’s right to give decisions on complaints from August 2006 to March 2008 exacerbated the delay.

MAL’s cases, checked by the Financial Ombudsman Service, have a less than 10 per cent uphold rate and where FOS has disagreed with decisions the overturn rate is now at less than 6 per cent.

Pirie says the firm has saved the industry several million pounds by continuing to fight for its clients when it could have simply fallen on the FSCS. MAL has not done any new business for 20 years.

Pirie says: “The determination of MAL to honour its commitments to its clients ensured that pensions review and endowment clients could be paid at the full amount, rather than the reduced amount that would have been paid had the awards been administered by the Financial Services Compensation Scheme.”

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