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Last Updated: Saturday, 5 March, 2005, 14:39 GMT
Splits company in administration
By Paul Lewis
BBC Radio 4's Money Box

Cash box
Many thousands do not yet know what their prospects are
One of the companies which sold split capital investment trusts has gone into administration leaving thousands of customers wondering where they can go now for compensation.

Exeter Fund Managers was one of 22 companies which marketed complex investments known as "splits" or "zeroes" from 1998 to 2002.

Many investors who bought these type of products have lost some or all of their money. Some people feel they were misled and the products mis-sold.

Before Christmas a deal was announced to pay 194 million in compensation to investors in splits sold by 18 companies, but Exeter did not join in the deal and was reported to be devising its own compensation scheme for any of its investors who thought they had been misled or mis-sold the products.

Three of Exeter's funds were involved with splits: Exeter Zero Preference Fund; Exeter Open Ended Investment Company Zero Portfolio, and Exeter High Income Unit Trust.

Mis-selling claims

So far only 317 investors have put in a complaint. But the directors of Exeter Fund Managers feared there would be more and that the 5.3 million set aside to pay claims would not be enough.

So late on Thursday they decided to put the company into administration.

If investors believe they have a claim against Exeter Fund Managers they should put the claim in to the administrator
Dan Schwarzmann, PricewaterhouseCoopers
Dan Schwarzmann of PricewaterhouseCoopers has been appointed as an administrator.

"If investors bought an Exeter product through another firm they should contact the firm that originally sold it to them.

He told BBC Radio 4's Money Box programme that investors with a claim should not be disadvantaged by the company's demise, and continued:

"If investors believe they have a claim against Exeter Fund Managers they should put the claim in to the administrator."

Last resort

Mr Schwarzmann said he had been appointed less than 48 hours earlier and it was too early to say exactly what assets the company had.

"My team and I are trying to determine the financial position of Exeter Fund Managers Ltd and the implications for its creditors.

The FSCS can pay out up to 48,000 per person in compensation
Mr Schwarzmann
"The 5.3 million has been secured. But investors should be reassured that if Exeter Fund Managers is unable to pay claims against it then the Financial Services Compensation Scheme can step in to protect eligible investors who have lost money," he said.

For that to happen the FSCS has to declare the company "in default" and Dan Schwarzmann is working with them.

"If it becomes clear that Exeter Fund Managers will be unable to pay claims against it and there are claims that fall under the protection scheme, then the FSCS will be able to declare Exeter Fund Managers in default.

"The FSCS can pay out up to 48,000 per person in compensation," he said.

Any money which individuals have invested is safe. Exeter sold off that part of the business in 2003 to New Star.

Associated companies such as Exeter Asset Management and its owner Iimia Financial Planning are not in administration and are still trading.

What investors should do

  • people who have already put in a complaint to the Financial Ombudsman Service need take no action. The FOS will liaise with the administrator

  • people who bought their product through a financial adviser separate from Exeter Fund Managers should complain to the financial advisor. Or if the adviser is no longer in business, direct to the Financial Services Compensation Scheme, 7th floor Lloyds Chambers, Portsoken Street, London E1 8BN, tel: 020 7892 7300

  • people who bought their product from Exeter Fund Managers, or through a "nominee" or who feel Exeter's publicity or information material misled them into buying the product should put in a claim to Exeter Fund Managers (in administration), 23 Cathedral Yard, Exeter EX1 1HB

    PricewaterhouseCoopers has a 24 hour helpline for worried investors on 020 7212 2880

    BBC Radio 4's Money Box was broadcast on Saturday, 5 March, 2005, at 1204 GMT.

    The programme was repeated on Sunday, 6 March, 2005, at 2102 GMT.



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