Arch Cru IFAs advised to contact PI insurance providers

In order to manage the cost of claims more efficiently, IFAs that have advised investment in Arch Cru in the past have been told to contact their PI insurance providers in order to request they make contributions to the Capita redress scheme.

The Financial Services Authority has launched investigative efforts into IFAs that had made recommendations of CF Arch Cru to its clients on a mixed, discretionary, or advised basis from July of 2006 to March of 2009, professional liability insurance experts have reported.  However, one legal group has said that the investigation by the FSA is determined to land any IFA into deep trouble if it classified any Arch Cru investments as anything but high risk.

Working with a 60 member strong IFA action group who made recommendations of the fund range, Regulatory Legal acts for around 2,700 Arch investors.  The legal firm has advised IFAs to contact their business liability insurance underwriters in order to invite them to make monetary contributions to a payment scheme set up by the fund’s authorised corporate director, Capita, which has already raised £54 million thanks to contributions from such tustees as BNY Mellon and HSBC.

However, the scheme has already been condemned by investors on the grounds that it will return not even half of their investment values based on the suspension date of the fund in March of 2009.  Meanwhile IFAs are expressing fears that investors will decide to complain to the Financial Ombudsman Service in a bid to regain the remainder of their investments.

These fears may be justified, as the FOS has already made a decision against the IFA in regards to investment in Arch Cru.  One Regulatory Legal partner, Gareth Fatchett, said that the the FSA investigation will most likely mirror that of the FOS decision, and that only those born yesterday would see it as anything but pre-deermined.

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