Sanlam challenges FSCS on Keydata legal action

Sanlam Private Wealth has written to lawyers for the Financial Services Compensation Scheme to dispute their claims that it gave negligent advice on Keydata products, saying it has never advised on the investments.

In the letter, Nigel Speirs, chief executive of Sanlam Private Wealth, accepts investors listed in particulars of claim court documents sent by law firm Herbert Smith are current Sanlam clients.

But according to Speirs these are clients who were transferred to the firm from their then adviser Owen Jennings in December 2007.

No advice has been given by Sanlam or its appointed representatives to these clients to invest in Keydata products, he said.

"We therefore do not have any liability under this action," he wrote.

In October, Herbert Smith, the law firm representing the FSCS, sent letters to IFAs saying the FSCS intends to recover from them the compensation costs it had paid out to investors in Keydata.

Late last week, it served legal proceedings on more than 500 IFAs to claw back the compensation paid to more than 5000 investors in the Keydata SLS products.

Speirs said the correct factual information about Sanlam's relationship with its clients who are Keydata investors could have been obtained by checking the FSCS records, or asking the firm prior to launching the action.

He wants Herbert Smith to issue a public statement that Sanlam is not implicated in the FSCS' negligence claims.