The Financial Services Authority (FSA) announced in December 2012 that financial advisers will be obliged to contact any clients they advised about the CF Arch Cru Investment and Diversified Funds to ask if they want their cases reviewed.
If clients have been mis-sold the investments, advisers will have to offer redress to their clients to put them back into the position they would have been in had they received suitable advice. Advisers will have one month from 1 April 2013 in which to contact their clients and the wording of the letters to clients has been mandated by the FSA. Advisers will be required to let customers who opt-in know the outcome of their case by 9 December 2013. This is the first time that the FSA has used its consumer redress powers to order compensation to consumers.
Further information on the redress scheme is available in the FSA press release and press reports on FT Adviser and IFA online. Background to the FSA’s consultation was reported in Brunel Professional Risk’s news site here and on the industry compensation scheme here.
“Financial advisers may have a case to answer if they misadvised clients to buy the Arch Cru funds,” said James Burgoyne director, Brunel Professional Risks. “Any adviser who is facing a possible claim and has not already notified their professional indemnity insurer about this, should consider doing so and discuss this with their professional indemnity broker. We are already helping clients with professional indemnity claims resulting from Arch Cru investments. We provide claims management and risk management services to deal with any claims and to ensure that our clients have robust procedures in place to protect themselves from similar situations in the future.”