Direct-mailing firm Whitechurch Investment Services has been placed into voluntary liquidation after the FSA insisted it offer reviews to clients who bought structured products promoted by the firm.
WIS, part of the Whitechurch group, says it could neither afford to take the steps demanded by the FSA nor challenge its decision without the financial assistance of stablemate Whitechurch Securities. But Whitechurch Sec- urities believes it would breach company law by pumping money into a firm with big potential liabilities so WIS has been placed in the hands of administrators BDO Stoy Hayward.
WIS chairman Kean Seager admits there are complaints against the firm but says that as no assets have been transferred out of WIS,it should have no difficulty meeting potential claims. He does not expect any claims to go as far as the Financial Ombudsman Service.
The move comes after the FSA expressed concern about some of the newsletters that WIS had sent. Although WIS says it “probably disagrees” with the regulator, the FSA has insisted that it offer to review the circumstances of investors who bought products after receiving direct-mail offers.
Seager says: “WIS is not in a position to defend its position. Even investigating individual cases would cost so much that financial support would be needed but we think that could breach company law so we are winding it up.”