SVS Securities - shut down?

sweeter_strudel

Geeba said:

Since both my SVS/ITI accounts were transferred late last year it's been a while since I used this forum, so apologies in advance if this enquiry has been covered in the meantime.  

Given the need for LC to add an update on their SVS support site warning against claims management companies (CMC) it would appear a lot of us, me included, have been contacted by a CMC offering to assist in making a claim regarding poor investment advice by SVS (prior to them going into administration). LC recommends contacting the FSCS directly, avoiding a CMC and their ridiculous % fee.

My question is has anyone actually made such a claim, either via the FSCS directly or via a CMC, and if so can some insight be offered regarding the experience?

What would be the basis of your claim? Every SVS call would've been recorded, and your typical investment size, market and risk tolerance noted in the Know Your Customer forms. 

Unless you stated you never invest in say AIM shares and yet SVS got you into AIM I doubt the strength of your claim.

If you never said "yes" when offered a share but they went ahead and bought anyway..... Or the recording will show they repeatedly harassed you after you said "no" until you caved in to say yes, then your claim may be valid.

If some investments you made went up and you sold at a profit and others went  down or went bust and you lost money, you'd still have to prove there's SVS pressure / mis-selling going on. If you only complain about investments where you lost money they are going to compare the recordings of good and bad investments purchases when trying to defend themselves.

What is the basis of SVS' wrongdoing? Their share dealing brokerage was thought to behave OK, their bonds were utterly corrupt. Are you trying to complain that you got greedy and unlucky in share investments - or were you genuinely robbed via a bond sale?

sweeter_strudel

Sheris said:

My2penneth said:

Heres the link and even then it isn't easy to find the restriction! The FCA website is hopeless ( you might have to scroll up to find the article).

https://register.fca.org.uk/s/firm?id=001b000000MfGkrAAF#disciplinary-and-regulatory-action

Thanks for the info, I could not find the page today, they must be trying to keep it under the carpet.
Must keep the info on going to help everyone.

So, because ITI aren't allowed to get new clients and hold any of their assets, unless they prove all the SVS clients are happily onboarded / transferred out, is that why I got an email from ITI pushing new forms of investments?

Straight to the delete button!

Playing close to the edge of the FCA restrictions I think.....

jenwrendorset

Apart from the responses from the FOS which may be months down the line, we're just about done with ITI and our transfers are now all with iWeb however that now beggars a question which perhaps someone more savvy in the investing world can throw some light on.  The sudden demise of SVS was a wake up call for many of us, I never saw that coming. I realise that our share holdings were safe albeit inaccessible for many months, but that apart we had the FSCS backing of £85K however at that point our accounts were well under that amount so not a worry. With todays's dismal bank interest rates we are intending to utilise our full ISA allowances this year which will see a couple of our accounts exceed the £85K limit. Should we be seeking out a new broker at this point or are we ok to stay with iWeb - we only hold funds and individual shares, no bonds or AIM listed shares. We're not buying or selling on a regular basis, this is just a way of trying to make better use of our retirement savings just in case we're ever allowed out again to play or spend some of our money.  Any advice gratefully received - this forum and ShareSoc have been a godsend to us, I know we would have struggled without everyone's input.  If a move to another broker is advised then any recommendations bearing in mind that we're well into our dotage now so 'simple and easy to understand' is the name of the game........pity LC didn't follow that criteria. Many thanks in anticipation.

johnburman

To  jenwrendorset  may i say what i have said before: the £85k compensation limit is too low.  It is doubled if you have a joint (trading) account.  A useful thought.  For the larger HL, iWeb brokers one has to hope that they are financially sound.  For the mid-ranking such as Jarvis you will have to take a view.  But for the smaller Nil Commission people like Trading 212 [which are UK subsidiaries of overseas parents remember], I would be wary of exceeding the £85k limit.  NOW the smaller brokers could put in place clearing bank guarantees OR a Lloyd's of London policy to guarantee customer funds upon any liquidation (or even for losses over £85k) but they DO NOT DO THIS.  One wonders why not if they are financially sound.  Rather like a builder having an NHBC policy to guarantee (the oh so limited) aspects of a new build building.  But they do not do it.  Customers are reliant on the FCA and FOS: both of which are sub-optimal performing organisations.

AND
if you look abroad to e.g. DEGIRO or FINCO check to see what compensation is available.  Remember ICESAVE in the 2008 crash! And think how do you make a claim in Dutch or Italian? (what you think in extremis they will allow claims in English?  No in Dutch, and notarised claim for)

PS>  I have asked FINCO what is their comp limit and my email has been ignored by them several times!

eskbanker

The fundamental point is that the FSCS £85K limit needs to be seen in the context of potential losses rather than simply balances - the SVS collapse is a typical example of this, where the losses that needed to be covered by FSCS were nothing like the full balances held by investors but simply related to each investor's share of the administration costs, so those with substantial six-figure balances still didn't actually lose anything as a result of having holdings well in excess of the FSCS protection limit....

GeorgieC

johnburman said:

To  jenwrendorset  may i say what i have said before: the £85k compensation limit is too low.  It is doubled if you have a joint (trading) account.  A useful thought.  For the larger HL, iWeb brokers one has to hope that they are financially sound.  For the mid-ranking such as Jarvis you will have to take a view.  But for the smaller Nil Commission people like Trading 212 [which are UK subsidiaries of overseas parents remember], I would be wary of exceeding the £85k limit.  NOW the smaller brokers could put in place clearing bank guarantees OR a Lloyd's of London policy to guarantee customer funds upon any liquidation (or even for losses over £85k) but they DO NOT DO THIS.  One wonders why not if they are financially sound.  Rather like a builder having an NHBC policy to guarantee (the oh so limited) aspects of a new build building.  But they do not do it.  Customers are reliant on the FCA and FOS: both of which are sub-optimal performing organisations.

AND
if you look abroad to e.g. DEGIRO or FINCO check to see what compensation is available.  Remember ICESAVE in the 2008 crash! And think how do you make a claim in Dutch or Italian? (what you think in extremis they will allow claims in English?  No in Dutch, and notarised claim for)

PS>  I have asked FINCO what is their comp limit and my email has been ignored by them several times!

@jenwrendorset
@johnburman
The EU broker compensation limit is EUR20,000
That being said, all cash and assets 'should' be segregated under both EU and FCA regulations so should always be ringfenced. In theory the compensation funds should only kick in if there has been fraud and the company has dipped their fingers in the till. Fineco are Italian (part of Unicredit), e-Toro is Israeli. Generally I believe that the compensation fund does not look at you by account but as an individual. Therefore I am pretty sure it is £85K total in the UK whether you have 1 account or 100 accounts at a particular institution. Some of the new kids on the block like 212 and e-Toro will be focussed on CFD markets rather than access to the physical markets. Many of these will take your trades on their own book and so have a vested interest in you losing money. This is why the regulated cfd brokers have to declare on their websites the percentage of retail investors that lose money (it usually runs around 70+%).
Choosing a broker is a minefield, but for any asset class ensure they are regulated. Also, any broker that lets you open an account with £100 is not (in my mind) going to offer any serious customer service rather they want to churn and burn.
Do you get a dedicated account manager who gives you their phone number/e mail? This is a good sign rather than the generic support@ addresses or chat bots. I have worked at varying brokerages for many years and happy to discuss with forumites...

Ravima

The one thing that this fiasco has shown me, is not to chose broker on basis of price alone and consider having more than the one broker. Perhaps have one for those you hold and another for those you trade.

My2penneth

to Jenwrendorset.
I agree with what Eskbanker said. The £85k compensation applies to losses.  In the case of SVS Securities ( and Beaufort Securities)...you would have needed to have a very large pot ( I calculated over £850k to have seen any ( any) loss....and that calculation was conservative.  

I'd stick with the big brokers ( I moved our SVS accounts to iWeb ( already had an account with them) and to Interactive Investor....the latter costs £9.99 per month but you get one free £7.99 deal ( buy or sell) thrown in...which I use.  

I would avoid the "free" brokers and absolutely avoid any that are not protected by the FSCS. 

p.s. I too got the IPO via email...I said "no" and gave my reason as being " I wanted nothing to do with ITI Capital ". What I would have like to have said is unprintable.

My2penneth

The £85k loss is a total whether you have 1 or 101 accounts with a broker...but we should also note ...the £85k loss applies to a licence. For example, we have iWeb, Halifax Share Dealing and Lloyds....they are all under one and the same  licence so one needs to check. 

SVS was my first broker...because they were cheap trading costs...that worked out well, eh? More disturbing was the whole year where accounts were frozen and then compounded by transferring accounts to a company run by a man and a dog  ( or bear?).  

sweeter_strudel

jenwrendorset said:

Apart from the responses from the FOS which may be months down the line, we're just about done with ITI and our transfers are now all with iWeb however that now beggars a question which perhaps someone more savvy in the investing world can throw some light on.  The sudden demise of SVS was a wake up call for many of us, I never saw that coming. I realise that our share holdings were safe albeit inaccessible for many months, but that apart we had the FSCS backing of £85K however at that point our accounts were well under that amount so not a worry. With todays's dismal bank interest rates we are intending to utilise our full ISA allowances this year which will see a couple of our accounts exceed the £85K limit. Should we be seeking out a new broker at this point or are we ok to stay with iWeb - we only hold funds and individual shares, no bonds or AIM listed shares. We're not buying or selling on a regular basis, this is just a way of trying to make better use of our retirement savings just in case we're ever allowed out again to play or spend some of our money.  Any advice gratefully received - this forum and ShareSoc have been a godsend to us, I know we would have struggled without everyone's input.  If a move to another broker is advised then any recommendations bearing in mind that we're well into our dotage now so 'simple and easy to understand' is the name of the game........pity LC didn't follow that criteria. Many thanks in anticipation.

I think the key detail to remember is what would happen to you if iWeb "did an SVS". The £85k loss compensation is a moot point regarding whether it is too small or perfectly OK until your holding with one institution is above ~£750k.

There is definitely an argument to keep investments with financially robust companies - or one where the government still hold a chunk of the shares.

More important is would you survive if iWeb were inaccessible for 12+ months? This is perhaps when you should consider splitting investments between brokers. I wouldn't make one a trading account and the other dull but worthy long term holdings but try and mix asset types to have a balance between each. Otherwise you may discover you have to rely on a trading account to pay your electricity bill, or buy food.

I'm in the process of balancing my SIPP between two providers just to avoid the SVS scenario when I'm retired and don't have the cushion of an income from a paid job.