SVS Securities - shut down?

manorhouse

All gone quite on here i see two big shots in US calling it down yet again yesterday .
Wonder if another will call it up today ?
I think we are seeing transfer of wealth from the small guys to theses big guys .
They have no shame i consider .

manted

https://www.leonardcurtis.co.uk/wp-content/uploads/2020/05/Client-Update-14-May-2020.pdf -latest update

johnburman

Alternatives to SVS
Fineco have not responded to my request for info on their UK regulation or compensation despite them inviting such requests on their website.  No they are out of contention.
Its looking like AJ Bell, then HL, then iWeb (who are not taking any transfers at the moment)

Trading 212 still have my ISA; and with no commisison they must be attractive.  I was expecting them to bombard me with requests to trade FX or CFD etc. but no.

But here is a thought.  If it is possible to use a cheap XO broker for > say £75k (allowing £10k fees under the £85k limit) as long as the broker is covered by the FSCS who cares who it is- the cheaper the better.  And remember joint accounts have £170k protection.
My mistake was using only 1 broker (SVS) for all my Trading and ISA.
 

bowlhead99

I don't think there is any fundamental problem with putting £80k in a cheap and cheerful broker if it is not your only set of assets, because if you can handle the disruption and extreme wait / loss of access in a crisis, it is at least covered if you have your records on which to base a claim to FSCS. As you saw what can happen with SVS, it would be a right pain if you do get that disruption, so I don't think 'who cares who it is, cheaper the better' is the right attitude if you are putting money there which you might need to get your hands on - either for cashflow purposes from time to time, or just to rebalance a portfolio's holdings within your overall wealth. 

As mentioned upthread, the foreign brokers may offer substantially less than £85k coverage via their local schemes so sticking to the UK seems sensible.  I use AJ Bell for most of my real investing, though have some play money in a few other places.

masonic

johnburman said:

But here is a thought.  If it is possible to use a cheap XO broker for > say £75k (allowing £10k fees under the £85k limit) as long as the broker is covered by the FSCS who cares who it is- the cheaper the better.  And remember joint accounts have £170k protection.
My mistake was using only 1 broker (SVS) for all my Trading and ISA.

It depends what you are trying to avoid.

If it's having no uncompensated losses when a broker goes into administration, then FSCS cover and a total investment at a reasonable level (could be a few fold over the limit and still be very safe). The less confidence you have in the broker, the less inclined you should be to breach the FSCS limit. I don't think you need to worry about having £10k headroom since administrators should not incur costs returning assets to investors that exceed the value of those assets. In a situation like that the administrator would go unpaid and would therefore not take on the task.

If it's avoiding getting into the administration situation in the first place, then an examination of the company, its profitability, the sustainability of its offering, and a regular review of any relevant news would be useful.

johnburman

As ever wise comments masonic

2 points
1  I missed out Jarvis in my list
2  not sure I can agree wiht 

I don't think you need to worry about having £10k headroom since administrators should not incur costs returning assets to investors that exceed the value of those assets.
Situation is CASS rules broken and X% of your shares 'go missing'.  OK one would hope that not 100% went walkabout. But depending on size, the costs of admin to you charged by the administrators + value of shares missing must <£85k.  If not, you are not protected by FSCS.
I think LC are charging FSCS around £12k *per investor* for their administration.

And BTW if there is no administration we dont get back our shares (and £). So there must be an administration one way or the other. 

masonic

johnburman said:

I don't think you need to worry about having £10k headroom since administrators should not incur costs returning assets to investors that exceed the value of those assets.
Situation is CASS rules broken and X% of your shares 'go missing'.  OK one would hope that not 100% went walkabout. But depending on size, the costs of admin to you charged by the administrators + value of shares missing must <£85k.  If not, you are not protected by FSCS.
I think LC are charging FSCS around £12k *per investor* for their administration.

Administrators charge their fees against assets. Your liability to the administrators ends when you run out of assets, therefore you could never be presented with a bill for administrator fees. If you had £85k invested in a single share and 100% of that went walkabout, you would not be billed for £12k on top of your £85k compensated loss. Likewise, investors with <£12k invested who for some reason or other aren't eligible for FSCS compensation will not have to write the administrators a cheque.

Thrugelmir

johnburman said:

I think LC are charging FSCS around £12k *per investor* for their administration.

The retained salaried staff still need to be paid. Plus the normal office overheads. 

johnburman

Masonic; agreed.  But if your share(s) were worth £80k and the administrators charged £12k per investor = £92k loss,to the FSCS.  Only £85 k would be paid by the FSCS to you.  So what would happen: would you lose the extra £7k out of your £80k or would the FSCS swallow the £7k? 

masonic

johnburman said:

Masonic; agreed.  But if your share(s) were worth £80k and the administrators charged £12k per investor = £92k loss,to the FSCS.  Only £85 k would be paid by the FSCS to you.  So what would happen: would you lose the extra £7k out of your £80k or would the FSCS swallow the £7k? 

Previous post edited to cover this scenario as well:

"Administrators charge their fees against assets. Your liability to the administrators ends when you run out of assets, therefore you could never be presented with a bill for administrator fees. If you had £80k invested in a single share and 100% of that went walkabout, you would not be billed for £12k on top of your £80k compensated loss."

At the end of the day, if there are actually £0 of assets held in the clients accounts belonging to you then the administrator cannot charge you a penny in costs, but they can charge up to 100% of the assets that are actually there. If there was supposed to be £85k (or any amount up to £85k) in the clients accounts belonging to you, and there was actually £0, then you can claim from FSCS for that loss, but it doesn't entitle the administrator to bang on your door for any share of that compensation.