Lowes Financial Management has slammed Merchant Capital’s new custodian Reyker Securities after administrative blunders saw it bill some clients twice for its services.
Merchant Capital structured product plans were originally held by Pritchard Stockbrokers, but in February the FSA suspended Pritchard’s permissions due to concerns about the way it handled client assets and monies.
As a result, Merchant Capital appointed Reyker Securities on February 17 and transferred assets worth £350m to Reyker.
In March, Reyker angered clients by telling them they must pay a fee in order to receive their delayed income payments and have the company act as custodian. Reyker told clients they must pay an admin fee of £15 per investment before April 13.
It said if the fee is received between April 13 and April 23, the charge increases to £20 per plan. This rises to £25 per investment for clients who respond after April 23.
Lowes Financial Management managing director Ian Lowes (pictured) says a number of his clients paid the £15 fee before April 13, but have received a second letter asking for the £20 payment.
Lowes says: “We have come across several clients whose cheques have been banked and Reyker has still written to them asking for the increased payment. The process has been badly handled by Reyker. “
Reyker Securities head of risk and strategy Adrian Barnwell says: “A small number of clients who have responded to the first letter have not yet been recorded as such on our database, as is inevitable when dealing with posted records.
“We deal with these when reported to us on a case-by-case basis in order to minimise issues as far as possible and reassure clients. It will take a few more weeks to bring this complex process to a conclusion.”
Merchant Capital declined to comment.