A professional indemnity (PI) insurer has hit out at a proposed £110m redress scheme for Arch Cru investors, saying it is fundamentally flawed and could cause "substantial damage" to IFA firms.
The Financial Services Authority (FSA) scheme - which would seek to clawback investor losses from IFAs who sold Arch Cru as a low-to-medium risk investment - is currently under consultation. It was due to report back in November but has been delayed due to an overwhelming number of responses from the industry. In its response to the FSA, PI provider Collegiate argued the regulator's conclusion that the funds were high risk - and therefore mis-sold to any investors with a medium-to-low attitude to risk - is "flawed". If the scheme, which is separate to a £54m compensation deal broke...
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