The Investment Management Association (IMA) has called for an independent review into the collapse of Keydata and other investment firms and said the scale of recent failures has not been seen since the Barlow Clowes scandal of the 1980s.
Chairman Douglas Ferrans (pictured) said "lessons must be learned" from the demise of Keydata Investment Services, Pacific Continental and Square Mile Securities, among other businesses.
The Financial Services Compensation Scheme (FSCS) has levied the advisory and fund management industries more than £400m in the last two years to compensate customers affected by the firms' collapses.
Speaking at the IMA Chairman's Dinner this week, Ferrans said: "In the last three years the failure of investment firms has led to a total compensation bill approaching £500m.
"The scale of recent failures - on a par with the Barlow Clowes scandal in the 1980s - cannot be ignored."
Gilts management service Barlow Clowes collapsed in 1988 after it emerged co-founder Peter Clowes, who was jailed for ten years for his role in the scam, had spent more than £100m of clients' money funding his lavish lifestyle.
Ferrans added: "There is a need for these events to be the subject of an independent review and for lessons to be learned. While we understand that legal and process issues may mean that such a review may not be able to start immediately, it will need to take place in due course and its conclusions must be published.
"It will then provide valuable lessons for the new Financial Conduct Authority to take on board as it starts its work."
Ferrans said the £230m bill presented to fund managers as part of a total £326m FSCS levy for 2010/11 was "probably the biggest event to hit the asset management industry over the last year".
"The liability was largely the apparent failure of a small structured product provider which had been promoting bonds issued in Luxembourg backed by a life settlement portfolio," he said.
"This had nothing to do with the fund management industry, but the impact was on us."
Ferrans added fund managers must take a keen interest in the stewardship of the companies in which they invest, even if investors deem that a low priority.
"While [our clients] may not profess an interest in stewardship when they make their investments, if you were to ask them whether they think companies should be well governed and that shareholders should hold boards to account, the answer would be an overwhelming 'yes'."
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