After many talks with the firms involved in the split capital investment trust debacle, the industry regulator, the Financial Services Authority seems to be winning.
The Association of Investment Trust Companies commissioned research, the outcome of which estimated consumer losses at £620m. However, the FSA has commissioned its own research. It would seem that the plan is to gain agreement of the overall losses, decide which consumers should be compensated and then decide which of the 21 companies should be tasked with payment.
Our View
The first rounds involving the FSA and the 21 companies seem to have been volatile and we believe there is far more of it to come. Policyholders involved should be comforted by the fact that something is being done and their rights are being fought for. However, we don't think they should be planning on how to spend their compensation just yet. It could take a long time for it all to be sorted out.