Robin Powell: The V11 affair exposes a hole in redress
For today’s advisers, the V11 affair looks like ancient history: footballers, film schemes, commission, pre-RDR.
Clients of Kingsbridge Asset Management, including up to 200 footballers, put a reported £417m into film and overseas property schemes that later collapsed. The City of London Police told the players they were ‘victims of crime’. Yet HMRC is still pursuing tax tied to those failed investments, and no settlement has been offered.
That is why the affair matters far beyond football: it exposes a hole in the system of redress.
Why advisers should care
Kingsbridge did belong to another era, a commission-driven, pre-RDR world many advisers today would barely recognise. The public does not make that distinction. While cases like this remain unresolved, ‘financial adviser’ keeps appearing in the same headlines as ‘fraud’.
Advisers pay into that system. They have a direct interest in who it protects, where its limits lie and who ends up funding failures
That matters in a profession where trust is already thin. The FCA’s Financial Lives 2024 survey found that, among adults who might need advice but have not sought it, 45% believe advisers act in their clients’ best interests and around two in five do not see them as unbiased. Those are not numbers that let the profession shrug off someone else’s scandal.
There is a more immediate reason to care. The case is still not closed. Indeed it was recently raised in Parliament, and the FCA and the Financial Ombudsman Service have published a second consultation on modernising redress.
Advisers pay into that system. They have a direct interest in who it protects, where its limits lie and who ends up funding failures when the normal routes stop working.
Where the system fails
The problem here is not only the original advice. It is what happened afterwards.
The criminal route has gone nowhere. The City of London Police investigated under Operation Gavreel and brought no charges. Allegations aired in the BBC film, including forged signatures and undisclosed conflicts, are denied by the firm’s founders.
The government can no longer say that fairness is impossible because the law has run its course. It can intervene if it wants to
The civil route looks no more promising. Claims for negligent advice are normally subject to a 15-year long-stop under the Limitation Act 1980, and this advice dates back to the 1990s and 2000s. Kingsbridge stopped trading in 2010. There is no live firm left to answer a claim.
Nor do the safety nets solve it. The Financial Ombudsman Service and the Financial Services Compensation Scheme were not built for losses on this scale, and much of what Kingsbridge sold was unregulated in the first place. For clients facing bills in the millions, that is not much of a safety net.
That leaves HMRC, which says it has a “duty to collect tax when it is legally due”. So the players are left in a position that should bother anyone who cares about redress: the advice is long gone, the money is long gone and only the tax demand remains.
Why the loan charge matters
There is a precedent: the loan charge settlement. The two cases are not the same, and no one is pretending they are. But the loan charge shows the Treasury will step in when the ordinary process delivers a result it judges unfair.
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After Ray McCann’s review, the government agreed last autumn to reduce many loan charge liabilities, wipe them out for some people, write off the first £5,000 of every bill and suspend interest. That does not prove the V11 should be handled the same way. It does remove one excuse.
The government can no longer say that fairness is impossible because the law has run its course. It can intervene if it wants to.
What the profession should say now
This is where the advice profession comes in. Trade bodies, levy-paying firms and anyone with a stake in redress reform should say two things clearly.
That the case remains unresolved is a stain on the advice profession and on HMRC. It needs to be put right
First, the V11 group needs a coordinated resolution rather than years more attrition. Second, reform of the redress system needs to reckon with legacy cases where the firm is gone, the advice falls outside today’s neat categories and the tax liability survives.
It is tempting to play this down because the victims were well-paid footballers. They were. But they lost millions, and the harm ran well beyond the money. Danny Murphy, who puts his own losses at around £5m, has spoken of the depression that followed and of former team-mates who have felt suicidal. Others have lost their homes.
That the case remains unresolved is a stain on the advice profession and on HMRC. It needs to be put right.
Robin Powell is a journalist and financial consumer advocate and is editor of The Evidence-Based Investor
