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Liontrust faces £415,000 FSCS levy hit

Liontrust says it faces a £415,000 hit to fund the FSCS interim levy to compensate for the likes of Keydata, Wills & Co and other failed investment firms.

The bill is a 1975 per cent increase on the £20,000 interim levy the firm was given in the previous financial year and is part of the £233m required from investment management firms to compensate for the failures.

The news comes as Liontrust announced a second quarter of positive net flows, with £76m seen in the last three months of 2010. The firm has now seen £86m of positive sales between July 1, 2010 and December 31, 2010.

Liontrust assets under management stood at £1,292bn at December 31, 2010 and at February 1, 2011 stood at £1,307bn. The group has taken in a total of £816,000 in peformance fees were earned in the interim period. In the financial year to December 31, 2010, a total of £1,013m was earned.

The group has also appointed Alastair Barbour to its board on April 1, 2011 as independent non-executive director and chairman of the Audit Committee, subject to FSA approval. Chief risk officer Chris Edmeades has notified his intention to step down from the board, with chief operating officer and chief financial officer Vijay Abrol taking his role for risk and compliance.

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Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. The base line here is that investors are now being over protected from their own greed. Both they and the fund managers are freer to take on board risk levels and governance levels that would not have been acceptable in the past.
    Society goes through phases, and the current phase, in the investment world, is the Nanny State phase. There should have been adequate insurance in place to cover this debacle – in that way there is a monetary discipline in place to reduce the occurrence of such events. Its surprising how much more diligent people become when poor governance is costing them money.
    This cosseting of investors and management is why we had the Financial Crisis, because no-one needed to operate in a prudent manner – there is always someone else to pick up the tab. In the UK Financial Industry the arbitrator on the level of compensation to be handed out is not under any level of control or answerable to anyone. Indeed the Arbitrator is the same body that makes the rules and polices the rules, and is therefore the same body that has failed in monitoring the KeyData failure. But they are not required to answer for their failure. The penalty falls on everyone else.
    There used to a doctrine called the Separation of Powers. The intention was that there should be checks on balances on the operation of power and the quality of the operation of power. In many ways it is the process that separates democracy from dictatorship. Would anyone argue that the Regulator in the UK is not a dictator?
    And the Mother of Democracy is blind to the cancer that they created.

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