WCRS founder says bad advice cost him pounds 1m

One of the stars of the advertising industry's 1980s heyday is still fighting for compensation from a leading private client stockbroker, five years after he claims bad advice and negligent handling of his account cost him more than a million pounds.

In a dramatic clash of cultures between Soho and the Square Mile, Ron Collins, the prizewinning "creative" who co-founded the WCRS advertising agency, says he lost a fortune because of the way a discretionary portfolio was run for him by Credit Suisse Asset Management.

After months of disagreement and reams of increasingly acrimonious correspondence, the Securities and Futures Authority was called in last year to try and reconcile the warring parties, but the matter remains unresolved.

At the heart of the tale, whose cameo roles include walk-ons by Hugh Grant, Elizabeth Hurley and Uri Geller, lies the collapse in value of Mr Collins's holding of more than 2 million shares in the agency, which by the time of the fall had been renamed Aegis.

From a high in 1989 of 376p, Aegis shares fell to a low of 12.5p in 1993 as recession and the over-expansion of the late 1980s boom came home to roost. During two hectic weeks of panic selling in the summer of 1992, they tumbled from 95p to 39p before Mr Collins finally sold out.

On 29 June 1992, his shares were worth almost pounds 2m, having reached a peak value of more than pounds 7m. By the time they were finally disposed of on 13 July, their value had plummeted to pounds 800,000.

According to Mr Collins, Credit Suisse failed to inform him of the precipitate fall in his Aegis shares and dissuaded him from selling until the shares had lost most of their value. He also alleges the broker failed to diversify his portfolio away from its reliance on just one share in a notoriously volatile and cyclical sector.

Credit Suisse, which was backed up by the SFA's Complaints Bureau, puts the blame on Mr Collins who, the firm says, made a policy of diversification impossible to carry out by withdrawing cash to fund his "extravagant" lifestyle as fast as it was realised by share sales.

In addition to the high cost of getting divorced, Mr Collins acquired Littleton House, the pounds 650,000 property in which Elizabeth Hurley and Hugh Grant hid from the press after allegations linked the actor to Divine Brown, a Los Angeles prostitute.

Despite refusing to accept responsibility for Mr Collins's loss, Credit Suisse did, however, admit in a letter to him that "the account has not been managed in line with our standard practice". It also conceded that because it did not follow Aegis closely itself it had had to rely on outside advice on the shares, which throughout the rapid decline in their price remained positive.

The yawning gulf between the two sides emerged clearly from an internal Credit Suisse memo, seen by the Independent, in which one of the firm's fund managers described a visit to Mr Collins's Wiltshire farmhouse.

Underlining the culture clash, the memo said of Mr Collins: "He is 56 but bohemian in appearance with a short pony-tail."

After describing the adman's interest in astrology and star signs, and his new girlfriend's interest in yoga, the note concluded: "He seems to rely very heavily on his friend, Uri Geller, for advice. I would suggest that his lifestyle is somewhat extravagant."

According to Credit Suisse, the firm explained clearly to Mr Collins when he opened an account in 1987 at the height of his successful advertising career that it would be prudent to diversify his portfolio. However, by 1989, although it had sold pounds 900,000 worth of Aegis shares, the diversification was no further ahead because of Mr Collins's persistent withdrawals.

Later the firm advised against selling any more shares because of the weak price: "Our strategy was to sell on strength and we were looking for that strength to return. At no point did we receive outside advice that we should alter this strategy - broker comment was favourable."

When Mr Collins turned to the SFA, the City watchdog which regulates stockbrokers, he received short shrift. In a letter from James Carver of the SFA's complaints bureau, he was told: "These panic sell-offs are always difficult to judge whether you are an amateur or a professional. I can well understand you worrying about your shares just as the broker would say `Don't panic, there is nothing wrong with this company. It will recover in due course'."

The SFA went on to tell Mr Collins that, despite the discretionary agreement with Credit Suisse, he could have made an execution-only order which "would have relieved the firm of all responsibility for the judging of the sale of shares. It seems that you did not take on that role until you did decide to sell the shares at about 40p."

Mr Collins, who admits he is a novice in financial matters who would have no understanding of the difference between discretionary and execution- only management of his account, recalls that the fund manager in charge of his account only agreed to sell the shares after "I swore at him, and ordered him to sell, reminding him that the shares were in free-fall as we spoke".

The SFA concluded: "The firm cannot be made responsible for a judgement or opinion on a particular investment that turned out to be incorrect as long as that opinion was supported by sound reasoning based on research made available to the firm."

Mr Carver told Mr Collins he could take the matter to arbitration, but warned him that the maximum claim he could make under that procedure would be for pounds 50,000.

He ended: "It seems that we have reached the end of the road in relation to conciliation."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
Attenborough with the primates
tvWhy BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
News
Kelly Osbourne will play a flight attendant in Sharknado 2
people
News
A bartender serves beers
news
Arts and Entertainment
Daniel Craig and Rory Kinnear film Spectre in London
film
Life and Style
The finale at Dolce and Gabbana autumn/winter 2015
fashion
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003
Barbara Woodward: Britain's first female ambassador to China intends to forge strong links with the growing economic superpower

Our woman in Beijing builds a new relationship

Britain's first female ambassador to China intends to forge strong links with growing economic power
Courage is rare. True humility is even rarer. But the only British soldier to be awarded the Victoria Cross in Afghanistan has both

Courage is rare. True humility is even rarer

Beware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Alexander McQueen: The catwalk was a stage for the designer's astonishing and troubling vision

Alexander McQueen's astonishing vision

Ahead of a major retrospective, Alexander Fury talks to the collaborators who helped create the late designer's notorious spectacle
New BBC series savours half a century of food in Britain, from Vesta curries to nouvelle cuisine

Dinner through the decades

A new BBC series challenged Brandon Robshaw and his family to eat their way from the 1950s to the 1990s
Philippa Perry interview: The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course

Philippa Perry interview

The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course
Bill Granger recipes: Our chef recreates the exoticism of the Indonesian stir-fry

Bill Granger's Indonesian stir-fry recipes

Our chef was inspired by the south-east Asian cuisine he encountered as a teenager
Chelsea vs Tottenham: Harry Kane was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope

Harry Kane interview

The striker was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope
The Last Word: For the good of the game: why on earth don’t we leave Fifa?

Michael Calvin's Last Word

For the good of the game: why on earth don’t we leave Fifa?