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MONEY COMMENT
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A major firm of independent financial advisers went into administration just before Christmas. David Aaron Partnership, an IFA with fifty staff and over 150,000 customers that has been going for 32 years, is now in the hands of administrators at accountancy firm KPMG. Aaron specialised in investment advice and produced its own newsstand investment magazine, as well as being one of the most media-friendly IFAs (I've used its guides myself now and then). The business was put up for sale last year, but buyer The Money Portal pulled out in November. Perhaps one reason for the firm's demise was its enthusiastic promotion of now-discredited high-income 'precipice' bonds and guaranteed equity bonds. Indeed, mis-selling complaints from customers caused the voluntary liquidation of IFA R J Temple, the leading seller of precipice bonds, last July. Also, the Financial Services Authority fined Bristol-based IFA Chase de Vere £165,000 a month ago for producing a misleading advertising campaign for similar bonds. It's a shame that Aaron has gone under, not least because of the worry that its clients face, some of whom may lose out. However, as the company did not handle client money, most of its existing customers have nothing to worry about, because various investment managers safely hold their investments. However, a few customers with mis-selling complaints against Aaron could lose out if the liquidators and the firm's professional indemnity insurance don't pay out. If you have (or plan to make) a mis-selling complaint against Aaron, contact KMPG as soon as possible. Once the Financial Services Compensation Scheme has declared Aaron to be "in default", it will meet all valid compensation claims. However, it only pays out the first £30,000 and 90% of the next £20,000, giving a maximum of £48,000. So, mis-selling victims with more than £30,000 at stake could lose out. Here at the Fool, we've never been big fans of IFAs and their advice - and tied agents, who can be nothing more than salespeople! We're much happier when people learn a little more about money and start making better financial decisions themselves. You could start today by reading our best-selling UK Investment Guide, a snip at just £9.74 including P&P. More: Learn to Invest | ISA Centre.