Jon Maguire, the founder of Cru Investment Management, says IFAs will fail in their attempt to seek compensation from Capita for losses their clients have suffered through the Arch Cru range.
Last week, Money Marketing, Fund Strategy’s sister publication, revealed that about 1,300 complaint letters had been sent to Capita asking for the firm to refund their original investment in the CF Arch cru fund range. This total has now reached about 2,000.
The move was organised by law firm Regulatory Legal in association with over 120 IFA firms. Regulatory Legal says if the complaints against Capita—which acted as authorised corporate director (ACD) on the range—are not resolved within eight weeks, they will be sent on to the Financial Ombudsman Service (FOS).
Maguire says: “What they are trying for has not been tested and it may get kicked out because they are trying to ask the FOS to rule on the behaviour of the ACD and not on the advice and I suspect they will find a reason not to go forward with it.”
He says he would like to see the group of IFAs succeed but suggests a better route to investor compensation would be for the Financial Services Authority (FSA) to step in. (article continues below)
Gareth Fatchett , a partner at Regulatory Legal, says: “Jon Maguire misunderstands the scope of the FOS. It can certainly consider the complaints against Capita as ACD.
“It is preferable that the regulator intervenes but in order for that to happen there needs to be a genuine request for a wider implications’ review. We believe the process we are following for investors puts massive pressure on the FSA to intervene.”