Investor protection scheme pays 12m pounds
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Your support makes all the difference.THE Investors Compensation Scheme, the safety net established under the Financial Services Act, paid out pounds 12.5m to 1,598 investors in its latest financial year, a huge increase on the pounds 1.8m of compensation paid in 1990-91.
The scheme estimates that, including management expenses, it may cost pounds 37m to compensate all those who invested with the 35 investment firms declared in default during 1991-92.
That will prompt a claim under the scheme's insurance policy, which caps at pounds 25m the amount to be levied from the investment industry. The ICS has been unable to renew its insurance for this year at an acceptable premium.
Most investors lost money through dealing with financial advisers regulated by Fimbra, the Financial Intermediaries, Managers and Brokers Regulatory Association. Prominent failures included Dunsdale Securities ( pounds 4.1m of compensation paid during the year), Robert Carter & Partners ( pounds 2.1m), Denis Dale Greaves ( pounds 1.4m), Hamilton House Associates ( pounds 827,000) and Levitt Group ( pounds 297,000 since March 1991).
Four Fimbra firms that advised investors to mortgage their homes and invest the proceeds - Fisher Prew-Smith, Aylesbury Associates, Wilmot Dollar and Acorn Insurance Consultants - are expected to cause 1,500 compensation claims.
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