FIDELITY Brokerage Services (FBS), one of Britain's biggest low commission private client stockbrokers, said yesterday it would not accept new business at the request of the stockbroking regulator, the Securities and Futures Authority, while it resolves the complaints of customers hit by administrative errors. It said it would compensate anybody who had lost money.
FBS ran into difficulties after introducing a new settlement and record keeping system, Tarot, last spring. This coincided with a surge in new business after a marketing campaign promoting self select personal equity plans (PEPs), a tax efficient form of private investment.
The company has admitted that staff lacked the training to extract the information that clients needed from Tarot, which also ran more slowly than expected. Paper based administration meanwhile built up a huge backlog of work.
The resulting errors prompted more than 850 written complaints from customers. The mistakes included taking more than three months to pay a customer £75,000 sterling after he closed his account.
FBS will not launch new services and will remain closed to new private client business until the end of January 1997.
Missing Irish investment broker Mr Tony Taylor, managing director of Taylor Asset Managers, held the Fidelity agency for the Republic. He disappeared without trace in August last. The group of companies of which he was chief executive have since been liquidated.
A major part of the Taylor's group business was its agency with Fidelity. Taylor is understood to have had around 30 million (£18.5 million) of investors funds invested with the group.
Mr Taylor had a "master agency" agreement with Fidelity, which is understood to be the only one of its kind. Under the agreement, Mr Taylor is understood to have received commission for all the clients he introduced to Fidelity as well as a small amount for all others from other brokers.
