FSA extends Arch cru probe to inherited clients

The FSA has extended its investigation into advisers who sold Arch cru funds to include inherited or acquired clients.

The regulator began writing to advisers who recommended one or more of six CF Arch cru funds last month.

But, according to one adviser who received his letter last week, the original requests for information included no mention of sales made by another firm.

The latest tranche of letters, seen by IFAonline and dated 6 January, now include the following paragraph:

"If you are providing services to clients who were sold an investment in one of the Arch cru funds by another firm, you are required to provide a separate list of the names of these clients..."

Recipients are being asked to name the firms they inherited the clients from, and the name of the platform.

The adviser, who asked to remain anonymous, said he suspected the FSA wanted to check the results of new responses against those submitted by the clients' original advisers.

"This appears to be the FSA's way of checking the data supplied by firms who recommended Arch cru. If we included the name of a client who the selling IFA did not note, then the FSA would obviously be raising questions at that point."

The FSA is investigating sales of Arch cru funds to retail clients on an advised, discretionary or mixed basis between July 2006 and March 2009.

Under Section 177 of the Financial Services and Markets Act (FSMA), firms who fail to respond to the notice will "be dealt with as if you were in contempt of court".

The Arch cru funds falling under the scope of the FSA's investigation are: Investment Portfolio fund, Specialist Portfolio fund, Balanced fund, Global Growth fund, Income fund, and the Finance fund.