Claims against Organic Investment Management to be passed to FSCS’s processing team in Nov

Maria Nikolova

The Financial Services Compensation Scheme has concluded that Organic Investment Management Ltd may owe a civil liability to its customers.

The UK Financial Services Compensation Scheme (FSCS) has published an update regarding its investigation into Organic Investment Management Ltd.

In November, claims against Organic Investment Management Ltd will be passed to FSCS’s claims processing team for assessment, the Scheme said in its latest update. This is because FSCS has concluded that Organic Investment Management Ltd may owe a civil liability to its customers – in other words, that there’s the potential the firm could be sued in court.

FSCS says it is currently finalising its approach to how it will deal with these claims, as each claim will need to be considered individually to see if compensation is due. To consider claims against a failed firm, the Scheme must be sure that customers have first tried every approach to claim against any connected firm that’s still trading, and have been unsuccessful.

FSCS is aware that FCA-authorised advisers may have recommended customers invest with Organic Investment Management Ltd. Or they may have recommended transferring existing pensions or investments through a self-invested personal pension (SIPP).

In case the adviser is still trading, one needs to complain to that adviser. If the adviser rejects the complaint, the clients can take their complaint to the Financial Ombudsman Service (FOS).

If, however, the advice came from an FCA-authorised adviser that is currently not trading, the clients should firstly submit a claim to FSCS against the financial adviser.

FSCS considers different factors when calculating losses on pension advice (a claim against financial advisers) compared to discretionary fund manager investments (a claim against discretionary fund managers, in this case Organic Investment Management Ltd). This means clients may be eligible to receive more compensation for any losses by claiming against their financial adviser, compared to making a claim against their discretionary fund manager.

Let’s recall that, according to FSCS’s 2018/19 Annual Report, the Scheme paid a total of £473 million in compensation to 425,760 customers of failed firms during 2018/19.

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