Another 3,000 Beaufort clients get money and assets back, thanks to FSCS and PwC
A further 3,000 clients of Beaufort Securities have been reunited with a large part of their funds and assets, thanks to compensation paid by the Financial Services Compensation Scheme (FSCS) in the wake of the stockbroker’s collapse earlier this year.
The 3,000 Beaufort clients have been transferred to the broker The Share Centre, and a tranche of cash and assets are being returned to them as a result of close collaboration between FSCS and the firm’s special administrators PwC.
Clients were able to begin accessing their transferred money and assets from the morning of Monday 12 November onwards. Any remaining client assets and client money not transferred to The Share Centre in this tranche but that are still eligible for transfer will be moved to relevant nominated brokers later.
In September, close collaboration between PwC and FSCS saw just over 12,000 Beaufort clients transferred to The Share Centre, where they were able to access their cash and assets. Last week a further 350 Beaufort clients, who are mostly in Wales, were also reunited with their money and assets via another broker, AFH Private Wealth.
Mark Neale, FSCS’s Chief Executive, said:
“Most Beaufort clients have now gained access to their money and assets, after months of hard work by FSCS and PwC. Thanks to the continuing collaboration by both organisations, the majority of clients are now back on track.”
Beaufort Securities Limited (BSL) and Beaufort Asset Clearing Services Limited (BACSL) serviced private investors, corporate clients and institutions. The collaboration between FSCS and PwC means that around 15,400 of their 17,500 clients have received most of their money and assets such as ISAs and pensions.
The remaining 2,000 or so clients are affected by a variety of more complex issues, which mean they may have to wait a bit longer to be transferred.
FSCS is protecting the vast majority of Beaufort’s 17,500 clients by compensating for any shortfall arising from the costs of returning cash and assets so that those costs will not need to be taken from client assets and client money. FSCS will arrange for these costs to be met directly with PwC. The vast majority of individual Beaufort clients are not expected to suffer any loss.
At the start of March the High Court placed BSL in Administration and BACSL in Special Administration following an application by the UK regulators. This was shortly after the US Department of Justice brought criminal charges against BSL and a number of individuals for their alleged involvement in securities fraud and money laundering.
FSCS expects the cost to its levy payers of the Beaufort default to be around £50m or less, which are expected to be spread out over more than one financial year. At present FSCS does not expect to need to raise a supplementary levy in this funding class.
FSCS is working closely with PwC and the creditors’ committee to ensure that the costs are kept as low as possible. The distribution plan, agreed by the High Court in July, allows FSCS compensation to be paid directly to Beaufort to cover the relevant administration costs, reduces the cashflow demand on FSCS’s levy payers while also simplifying the process for Beaufort clients, most of whom will have their portfolio returned whole without any deduction.
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Bhavik Depala
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E: publicrelations@fscs.org.uk