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SimplyBiz altered Arch cru letters without FCA permission

SimplyBiz amended FCA template letters to Arch cru clients without the regulator’s permission when carrying out compliance work for adviser firms, Money Marketing can reveal.

The FCA launched its Arch cru consumer redress scheme in April, which required all firms which advised on the funds to write to affected clients inviting them to opt into the scheme using a template letter it supplied.

The original letters asked consumers to respond by ticking a ‘yes’ box if they wanted their case to be reviewed.

Support services firm SimplyBiz approached the regulator informally and, thinking it had permission to do so, amended the letter to include another tick box option for those wanting to say ‘no’ to inclusion in the scheme.

SimplyBiz made the letter available on its website for the firms it provides support services for to use. Money Marketing understands two firms used the amended letter.

SimplyBiz managing director Matt Timmins says: “In good faith and so that those firms involved in the redress correspondence could achieve the best possible response rates from consumers, we added a tick box to leave the consumer in no doubt that a response was required.”

An FCA spokesman says: “Our rules contain clear instructions on consumer communications and include template letters that firms are required to use.

“The opt-in letters do not include a tick box for consumers to indicate that they do not want to be part of the redress scheme, nor did we give any firm permission to include such a box.”

No regulatory action is expected to be taken against SimplyBiz on the matter, Money Marketing understands.

IFA Centre managing director Gill Cardy says: “The regulator was always very clear that, however unsatisfactory, the client letters had to be sent exactly as they had been prepared.

“SimplyBiz is in a high position of trust as a leading compliance support service to advisers who relied on their advice, and with this very simple action they have placed their affected members at risk.”

Last month the FCA raised concerns that opt-in rates for the Arch cru redress scheme are considerably lower at some advice firms than others. It wrote to a sample of firms asking them to explain why their rates are low.

There is no suggestion that the firms which used the SimplyBiz letter had lower than average response rates.


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There are 19 comments at the moment, we would love to hear your opinion too.

  1. Wow…the petty mindedness of regulators is astonishing! The SimplyBiz version is much better because it means that the adviser firms know that their client has received the letter and made a decision.

    Meanwhile, Co-op bank nearly collapses and a number of FCA regulated entities have failed causing the remaining advisers to collect a £30m FSCS levy. Something is seriously wrong.

  2. Whilst I am pleased to see the level of detail the FCA are going to in checking that letters sent out match the template, if their predecessor, the FSA had insisted Capita follow the COLL rulebook in the first place there would have been no need for the Consumer Redress Scheme.

    The important thing for both IFAs and Investors who have all lost out over the Arch Cru debacle is to know that there is a choice. The Capita offer deadline is looming but for those who would prefer to see justice there is the option of joining legal action against Capita @InvestorJustice

  3. The bullying tactics of the regulator and micro management of IFA firms has become total control without responsibility. Most of the mistrust of firms is due to over regulation. It has to stop .

  4. What a pedantic attitude!
    I entirely agree with Soren that a letter that requires a response either way is better than a letter that could easily be overlooked as no reply needed.
    At least the FCA have been adult about it in respect of not pursuing matters, its a wonder it was even raised. Get on to the banks and sort them out!
    Well done SimplyBiz for trying to do the right thing

  5. Maybe the FCA dont actually understand that, unlike the regulator, clients do not always blame the adviser when things go wrong. Like the Arch Cru debacle. You can hardly hold the adviser to account for fraud and thef from the company in question. I personally do not have any clients who I advised to go into Arch Cru but there are a couple who were shoehorned into it by their providers who dumped the IdB funds in favour of Arch.
    Why can the FCA just not accept the outcome of what happens, whether it is low or high? There are alot bigger problems about than whipping every single adviser in the land.

  6. PS. Ref my bigger issues above – The FCA would be better served getting the banks to send them a list of every customer who has/had PPI. The FCA should then start a mass telephone campaign calling customers to see just how many have actually received the compensation they are supposed to. It seems the banks may have set aside billions to cover the compo but from reports in MM and other trade press it seems to be a very slow process of getting the caash back to those who it is supposed to have gone to. That would be a much better use of their time. You never know the FCA staff who are on the phones to customers may even develop customer facing skills in to the bargin. Then everyone would have been a winner.

  7. The FCA gives clear rules re editing their documents – not allowed.

    A ”Tick Box” indicates an option – No tick box – No option, how very poignant – this speaks volumes for the FSA and the replacement FCA, are these people human or a clone of politicians?

  8. Isn’t the intention here quite obvious (and entirely consistent with all such past templates)? The FCA has imposed its own non-negotiable template with the clear and deliberate intention that it should encourage as many people as possible to opt in and as few as possible to opt out.

    A good strategy on the part of those forced to send the letter out (thankfully I’m not amongst them) might have been to contact their clients in advance to forewarn them, to explain that it’s been imposed on them by the FCA and that they’ve been forbidden to change it in any way.

    It’s not fair, it’s not balanced, it’s not designed to enable you, Mr Client, to reach a considered decision. It’s just there to screw us for an outcome over which we had no control, which we couldn’t reasonably have forseen and which the regulator itself failed totally to foresee.

    It’s easy to see why the FCA doesn’t wish to permit any degree of latitude.

  9. God this Industry !!! Simply Biz added an extra tick box to the form to help the client – Dear dear so naughty of them -Go stand in the corner right now Simply Biz , put that dunces cap on and do NOT do it again. Better fit the regulator had kept a firmer eye on Arch Cru in the first place.
    Then of course Gill Cardy, former FSA champion and now sucking up to the FCA just has to get her name in the press – way to inpress you members and show them your on their side Gill !!!

  10. Marty – are your IdeB clients who got pushed into Arch Cru aware of the court case they may wish to join? The High Court issued a Group Litigation Order on 1st November and 550 investors have now signed up to this group action against Capita (of which I am one). Sadly some of the platforms have not yet notified investors of this option so your clients may not be aware of it?

    We have no win no fee funding in place and the 550 investors signed up so far total £20 million. If you would like to know more go to where you can contact the Committee or the lawyers for more information.

  11. This is beyond pedantry and smacks of the sort of mind set prevalent in the pension review. What is wrong with a ‘no’ box? I thought that the new regulator was more outcome focused. What better outcome than a clear message from clients?

    Lay this alongside the lax attitude with the Co-Op and one wonders whether the word ‘consistency’ is in the lexicon at Canary Wharf.

  12. I am an investor in Arch Cru through a platform (who have not yet informed me about the Harcus Sinclair action) but I was lucky enough to come across the info on line. It seems hugely unfair that with the deadline looming some investors may not be aware of this action and will have to accept the derisory Capita offer. I didn’t invest a huge amount, so can afford to pass on the small amount offered by Capita, although I appreciate everyone’s circumstances are different and this may not be true for everyone. Surely most of the investors who use a platform must have an IFA, even if it is one who didn’t make the investment. Perhaps these IFAs could let their clients know about the GLO? They don’t have to recommend it, just let them know it exists. I think Gill Cardy played quite a large part in getting this action of the ground, after years of following this debacle online it’s a relief to find someone who actually appreciates that investors have had a pretty rough ride too! If the action is successful (and I don’t believe people would have funded the GLO from their own pockets if they didn’t believe it would be) then even allowing for the payment of costs I will have a significantly higher return. Yes, it is a gamble, but much less of a gamble than investing in Arch Cru in the first place. Just to reiterate – if the action fails there are no costs to the investor.

  13. The real crime of course is the regulatory approval of Arch Cru and the subsequent regulatory buck passing .

  14. I think there’s a couple of things here that need to be discussed and although I have no exposure to Arch Cru and have not read too much about it. I am surprised how many financial advisers seem to put all their eggs in one basket when it comes to advice.

    Yes, Capita should be held liable for their product but there is also some responsibility on behalf of the advisers to make sure that investors are well diversify, some of the stories I’ve heard in respects to this case seems to indicate that some advisers did not diversify client portfolios.

    We all make mistakes and sometimes get things wrong but the comment from A F above worries me, due to the fact that an investor has been left to sort out a problem that he obviously received advice on initially. Left relying on the Internet or the efforts of Gill Candy should not be an acceptable outcome for a client.

    The regulator talks about customer service and treating clients fairly but in the same time it allows those that are responsible e.g. Capita to walk away scot-free. Yes they may be fined but where is the accountability and more importantly where is the investigation of what actually went wrong.

    As I said at the beginning I don’t have any exposure to this but it seems to me that we learn absolutely nothing from our mistakes in this profession. When Keydata went down a few years ago I heard of stories that N&P advisers had been recommending that investors invest almost that entire equity based savings into that one product. One client I read about invested over £300,000 (most of her savings) into Keydata, you could say that the client is silly putting all of her eggs in one basket but she also received professional advice recommending that action.

    This comes down to poor supervision from a regulator and crucially them not asking the right questions particularly when some advisers voiced concerns. We should also recognise that there are some financial advisers who continue to give poor level of advice after all which you really stick £300,000 of clients money in one product if that is the majority of her lifetime savings!

    We all need to get away from using the words cautious or guaranteed when it comes to equity linked investments. When we look at some of the structured products that have been sold in the past using the words guaranteed or cautious is it no wonder why our industry has such a bad rap.

    I included the regulatory approval in the last comment!

  15. If you drilled down and followed the money it was never clear where the money was invested with so many offshore layers but that should also have raised alarms at both the ACD and the regulator long before it collapsed.

    Simplybiz is not a regulated entity so the regulator cannot use its normal enforcement tools against it. The firms using them are responsible for their actions and I doubt they would go that far.

  16. Peter, you are quite right that having to rely on the internet to find out about a the case against Capita is poor, but this is the situation many Arch Cru investors are in, as, despite the High Court issuing a Group Litigation Order, this has not been passed on to all individual investors by the platforms so we are relying on IFAs to ensure clients are aware of this option. Gill Cardy has helped enormously in spreading the word, but we need others to help too!

    Arch Cru investors should have the right to make an informed choice on whether or not to accept the Capita offer, but how can they if they don’t even know they have a choice. The website for the legal case is where all the necessary contact information can be found.

    Not all investors are still in touch with their IFA so we appreciate any help we can get in publicising the existence of the case by the IFA network.

  17. I suppose this is what is known as a tick box mentality.

  18. Dear oh dear : the point is not who is being pedantic. The letters to be sent to clients who invested in the funds were poorly written and biased (anyone remember “Are u owed?”) – and a lot of advisers would have like to make the amendments that gave clients the opportunity to opt OUT of the review as well as opt IN.
    Now, notwithstanding the fact that the letters were badly constructed and clearly biased towards encouraging an opt-in, advisers whose clients did not reply are now required to submit client data to the FCA so the FCA can call them and ask the clients themselves if their advisers contacted them about the redress scheme.
    Possible answers “yes” – in which case what did they say when discussing the fund failings?
    Possible answer “no” – what a poor adviser for not discussing the situation with your clients.
    To create a system which is biased, which doesn’t create the results you want and then to continue to pursue firms because the right result didn’t emerge is so wrong, every adviser should be up in arms about it. And if you didn’t advise on Arch cru you should still be up in arms about it because you do not want them to do the same the next time.
    @Peter Herd : I have met clients who have had very poor advice, and those advisers should be taken to task for their failings – but I have also met clients who received perfectly suitable advice. The point of all of this is that where advisers gave poor advice they should be called to account for this. But no adviser should be made to pay for the sins of the product providers, as very clearly set out by the FSA in their enforcement notice against Capita. Like no adviser was asked to pay for the failings of Standard Life in relation to the Pension Sterling fund – becuase the reules requiring the reimbursement of disadvantaged investors sit in the rule book itself – Standard Life paid and many advisers would be a lot less complacent about this if the FCA had taken a similar approach with Standard Life advisers as they have done with Capita.
    And this too is something EVERY adviser should be fighting against. A number of funds used, and still use, private equity, private finance, infrastructure, sustainability projects etc etc … they are still offered and performing perfectly well.
    This, and the fact that around 5,000 investors with around £80m invested who simply had the misfortune to have their investments acquired from Insinger de Beaufort by Arch cru following which their value was destroyed, prove that this is not about the advice these people received.
    Please try to separate the question of poor advice when you are thinking about this otherwise it leaves the door wide open every time for advisers to always carry the can for provider failures.
    Catalyst for example. The bills will be arriving soon, and someone should be fighting against advisers paying for this, I wonder who??

  19. To Peter Turner ~ yes, tick box regulation. With only one box to tick!

    It might have been an idea to send out the letter as decreed by the regulator, with a second one explaining the reason for there being no second box and that those who didn’t wish to opt in needed only to chuck the first one in the bin. Would that have been deemed a contravention (certainly not a contradiction) of the original letter or merely what most reasonable and fair minded people (of whom there still seem to be precious few at Canary Wharf) would consider to be nothing more heinous than compensating for its obvious deficiency?

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