Bob’s Weekly Update
It’s ground hog day again! Ian’s incredibly expensive Apple Mac is still back at the repair shop, which I think is disgraceful customer service, and I’m still laid low with my chest and not up to doing much.
I cough sounds so bad, that on Monday on the phone to the AHC meeting, I could hear members reaching for their face masks every time I spoke. As usual it was a long and productive meeting of which I can tell you nothing. It’s a bit like I imagine serving in the Politburo must have been during the Soviet era.
Today I want to commend to you the work being undertaken by the ARM Investors Help group led by David Ince. His Bulletin No 4 is out, so I have asked Ian to get it up on the website. If their isn’t a link attached to this note, please go straight to our website.
Hopefully, next week both myself and the Apple Mac will be restored to health and I will be able to write something fuller for you.
Have a good weekend one and all.
Due to technical difficulties Item 4 appears below.
The good news is that a few more ARM investors have indicated their support for possible extra funding, should we need it! This brings the total to 52.
Further Discussions with the FSCS
Please find below the main content of an email I received from the FSCS solicitor after my conversation on Monday 13th April:
“Further to our conversation this morning, I write to confirm our discussion. Our external advisers are reviewing the additional information you provided in respect of xxxxxx’s case. We need to meet with them to discuss their review and to discuss the Rockingham cases generally in light of the information we possess. As mentioned, depending on their views, it might be necessary for us to consider whether we need to seek expert opinion on the modelling of the ARM products.”
I am sorry that there is no more to report but felt that “no news is good news” i.e. the FSCS have not discounted our argument and have not ‘put up a brick wall’ like it has done previously. Jenna confirmed that other Rockingham (non-ARM related) clients had been granted compensation and this was one reason why it was going to review its initial decision against Rockingham. I explained that many of us felt that it is unfair and inconsistent for other Rockingham clients to have been awarded compensation and not ourselves – it was as though the FSCS was “hiding behind the legal issue of causation” so that the compensation bill would be less! The solicitor took this implied criticism well and explained that our “new information/evidence” was also affecting its current approach. The irony was not lost on me when she mentioned that she may need to engage the services of an expert regarding the ARM Business Model! Think positively – at least we don’t have to foot the bill for a Financial Planning Actuarial Consultant!! Also, this approach does confirm that the FSCS is taking our argument seriously.
Some people think that the Business Model was viable if it had been allowed to run its full course. Looking at this in pure actuarial/financial terms then I agree. However, we are looking at humans and individual investors with their own attitudes to risk and not some computer-simulated model. I believe that the success of the Business Model relied on RR (and possibly others!) making a conscious decision NOT to tell potential investors all the relevant facts about the model, especially the “high risk” liquidity risks. Would any reasonable person think that any ordinary, “low risk” retail investor would have put all their pension into one investment had they known that their money was being used to:
pay coupons to themselves
pay coupons to other investors
as well as to purchase life policies and administer the business? I think not!
The fact that RR publically stated that they had undertaken “extensive” due diligence on the Business Model and that they knew about the positive cash-flow “tipping point” in 2015 proves that they made a conscious decision not to tell potential investors relevant facts which were needed to make an informed decision. In doing this RR acted negligently and breached their legal responsibility of “duty of care” to their clients.
We agreed that I would call her in a few weeks’ time for some feedback on her planned meetings / discussions.
Hopefully the iMac problem will have been resolved.