StructuredProductReview.com is mounting a campaign with the support of 30 adviser firms to refer at least 500 complaints against Reyker Securities to the Financial Ombudsman Service over charges levied on former Merchant Capital investors unless they are lowered.
Reyker told 12,000 Merchant Capital investors in April it would impose charges to cover custody and administration costs that Merchant House Group agreed to pay the firm before it went into administration. Reyker estimated charges would not exceed £500 over the term for capital plans and £600 for income plans but said this was not guaranteed.
Adviser research website StructuredProductReview, operated by Lowes Financial Management, argues the charges are unfair as they should not be paid by the investors.
Founder Ian Lowes says: “The clients invested in a product where all the charges through to maturity were paid at outset. Reyker is also charging more than is commercially acceptable and more than the clients could have anticipated.”
Lowes has written to FOS chief executive Natalie Ceeney to ask her to intervene. He has had one test complaint rejected by Reyker on the basis that the prospect of future charges was adequately disclosed.
He says the next step will be to co-ordinate at least 500 complaints as a mass referral to the FOS, backed by around 30 adviser firms that have pledged their support. The complaints would need to be lodged with Reyker individually and rejected before they could be referred in bulk to the FOS.
Lowes is also investigating whether the FSCS could become liable for the charges if Merchant House is declared in default as the charges arose as a result of its collapse.
Kilsby Williams & Gould Chartered Financial Planners director Simon Gould says: “Reyker knew the terms under which it was taking on Merchant Capital business. It is holding clients to ransom.”
Reyker says it cannot comment due to data protection and client confidentiality.