SVS Securities - shut down?

johnburman

See FT ADVISOR story on svs and iti 

masonic

johnburman said:

See FT ADVISOR story on svs and iti 

Wow, £31.6m! We'll all pay a share of that through the levy on surviving financial services firms. I lost track of where the total administrator fees ended up (edit: £13.1m), but it seems there must be a fair amount claimed for missing assets, which is unexpected.

eskbanker

RasputinB said:

eskbanker said:

 if elimination (or even significant reduction) of complaints was genuinely to be targeted, the costs of additional staff, more training, systems upgrades, etc, etc, are always going to be weighed against the benefit....

In other words, when it is to their financial advantage some firms will accept claims and pay compensation to their clients rather than fix problems?

That is indeed other words from mine - I wasn't suggesting a deliberate policy of choosing compensation over fixing issues as such, but just highlighting that many issues will be complex, time-consuming and/or expensive to resolve, and so it's inevitable that firms will direct their resources to where they'll achieve the most benefit for the cost incurred.  I expect that there will be a backlog of outstanding fixes/improvements in most businesses and that it's unrealistic to expect everything to be resolved within a certain number of days or weeks after a complaint, although it's difficult to generalise and sometimes there will be low-hanging fruit that can be addressed quickly.

The issue with such a strategy is that it might not be in the best interests of the clients; so the firm would not be conforming to FCA regulations.

I don't believe that that 'best interests of the client' argument can realistically be applied as literally as that, but would expect the FCA to be interested if they were aware of a firm ignoring recurring issues that were easy to fix.

If a client feels that the firm hasn’t acted in his best interests what should he / she do about it?

As above, I'm unconvinced that in itself this is really the basis for a complaint, but that complaints are valid if relating to actual tangible service provision issues, etc.

My take on what Terry Connor, the financial ombudsman, was suggesting is that the client can complain, and keep complaining, i.e. make multiple complaints; until the problems are fixed.

I'm sure it's valid to do so in some scenarios but less so in others, so, for example, if a complaint was raised and upheld, with corrective action agreed, then if the problem turned out not to be fixed after that then that would seem fair game for another complaint.  However, complaining about a flaw in a system on a Monday, then again on Tuesday, Wednesday, etc, would seem unreasonable!

Looking at the practicalities, is there any reason (apart from it being tedious to all concerned) why ITI clients shouldn’t make multiple claims?

As above, horses for courses, what specifically are you thinking of?

Perhaps worth noting that the FOS compensation guidance for distress and inconvenience talks of "An award between £100 and up to £300 [as apparently applied to many ITI-related complaints] might be suitable where there have been repeated small errors...", so there isn't necessarily an expectation being set that every complaint would ultimately result in a separate compensation payment.

And, if they haven’t already done so, do you agree that “the rules” allow them to do so retrospectively?

The FCA rules allow complaints to be raised up to six years after an event, so no problem with doing so retrospectively, provided it's otherwise valid.

Comments inline above....

RasputinB

masonic said:

johnburman said:

See FT ADVISOR story on svs and iti 

"it seems there must be a fair amount claimed for missing assets, which is unexpected".

I believe that there has been a fair amount paid out in compensation to former SVS clients. Not for missing assets but for misselling etc. The amount may be higher than expected but do take into account that claims management companies know how to make successful claims. If you wonder how they managed to contact SVS clients have a look at the FCA pages.

masonic

RasputinB said:

masonic said:

johnburman said:

See FT ADVISOR story on svs and iti 

"it seems there must be a fair amount claimed for missing assets, which is unexpected".

I believe that there has been a fair amount paid out in compensation to former SVS clients. Not for missing assets but for misselling etc. The amount may be higher than expected but do take into account that claims management companies know how to make successful claims. If you wonder how they managed to contact SVS clients have a look at the FCA pages.

Oh yes, I'd completely forgotten about their advisory service and of course the failed SVS mini-bonds that SVS was actively hard-selling to customers near the end. I do hope most people avoided using claims management companies in respect of that. The proper route is via the Financial Ombudsman Service, which is simple to use and costs nothing, whereas those inserting an unnecessary third party between them and the FOS would be billed following a successful claim, and would not be entitled to add the cost of the fees to their compensation award.

I recall that one poster ( @englishmas ) had already gone down that route in respect of the SVS advice in advance of them going into administration and been awarded a sum in excess of the FSCS limit, which will entitle them only to £85k including the claim for fees.

I realise I made a mistake in totting up the costs of the administration, and omitted £5m in costs from outsourced activities, so the total was £18.1m, meaning there was £13.5m paid out in compensation for investment losses of various kinds.

RasputinB

masonic said:

RasputinB said:

masonic said:

johnburman said:

See FT ADVISOR story on svs and iti 

"it seems there must be a fair amount claimed for missing assets, which is unexpected".

I believe that there has been a fair amount paid out in compensation to former SVS clients. Not for missing assets but for misselling etc. The amount may be higher than expected but do take into account that claims management companies know how to make successful claims. If you wonder how they managed to contact SVS clients have a look at the FCA pages.

Oh yes, I'd completely forgotten about their advisory service and of course the failed SVS mini-bonds that SVS was actively hard-selling to customers near the end. I do hope most people avoided using claims management companies in respect of that. The proper route is via the Financial Ombudsman Service, which is simple to use and costs nothing, whereas those inserting an unnecessary third party between them and the FOS would be billed following a successful claim, and would not be entitled to add the cost of the fees to their compensation award.

I recall that one poster ( @englishmas ) had already gone down that route in respect of the SVS advice in advance of them going into administration and been awarded a sum in excess of the FSCS limit, which will entitle them only to £85k including the claim for fees.

I realise I made a mistake in totting up the costs of the administration, and omitted £5m in costs from outsourced activities, so the total was £18.1m, meaning there was £13.5m paid out in compensation for investment losses of various kinds.

You said that "The proper route is via the Financial Ombudsman Service, which is simple to use and costs nothing". Are you unaware that the FOS has said, and I quote, “as SVS is in administration, any complaint relating to it will need to be referred by you to the Financial Services Compensation Scheme rather than our service"?
But you are right; the proper route is via the FOS. Shame on them for being obstructive.

masonic

RasputinB said:

masonic said:

RasputinB said:

masonic said:

johnburman said:

See FT ADVISOR story on svs and iti 

"it seems there must be a fair amount claimed for missing assets, which is unexpected".

I believe that there has been a fair amount paid out in compensation to former SVS clients. Not for missing assets but for misselling etc. The amount may be higher than expected but do take into account that claims management companies know how to make successful claims. If you wonder how they managed to contact SVS clients have a look at the FCA pages.

Oh yes, I'd completely forgotten about their advisory service and of course the failed SVS mini-bonds that SVS was actively hard-selling to customers near the end. I do hope most people avoided using claims management companies in respect of that. The proper route is via the Financial Ombudsman Service, which is simple to use and costs nothing, whereas those inserting an unnecessary third party between them and the FOS would be billed following a successful claim, and would not be entitled to add the cost of the fees to their compensation award.

I recall that one poster ( @englishmas ) had already gone down that route in respect of the SVS advice in advance of them going into administration and been awarded a sum in excess of the FSCS limit, which will entitle them only to £85k including the claim for fees.

I realise I made a mistake in totting up the costs of the administration, and omitted £5m in costs from outsourced activities, so the total was £18.1m, meaning there was £13.5m paid out in compensation for investment losses of various kinds.

You said that "The proper route is via the Financial Ombudsman Service, which is simple to use and costs nothing". Are you unaware that the FOS has said, and I quote, “as SVS is in administration, any complaint relating to it will need to be referred by you to the Financial Services Compensation Scheme rather than our service"?
But you are right; the proper route is via the FOS. Shame on them for being obstructive.

This is not correct when the claim is for bad advice leading to investment losses. The FSCS cannot award compensation without an FOS decision on the complaint, it does not adjudicate complaints and cannot decide itself whether compensation is warranted. FOS staff should know this from multiple prior cases of mini-bonds and other unsuitable investments failing. If they are turning away genuine complaints, then I agree that is shameful and those matters should be referred to the Independent Assessor. However, it would be correct in saying this about complaints that involve things that happened after SVS entered administration.

Where has the FOS stated the quoted text? I cannot locate the reference.

Edit: It looks like my information is out of date. The process has changed at some point in the last few years and FSCS does deal directly with compensation for bad advice without a complaint needing to first be brought to the FOS. This is what happens now, for example, for financial advisers who have retired or gone out of business before a complaint is brought/resolved. Those missold London Capital & Finance mini-bonds were all directed to complain to FOS in 2019 if they wanted to be considered for compensation for bad financial advice and this ended up being subject to a judicial review in 2000 because they were unhappy with the FOS decisions. It seems in more recent misselling scandals, such as defined benefit pension transfers, those who have been advised by firms or individuals no longer trading are asked to submit evidence directly to FSCS, as are LCF bondholders who have not yet tried to claim compensation.

RasputinB

masonic said:

RasputinB said:

masonic said:

RasputinB said:

masonic said:

johnburman said:

See FT ADVISOR story on svs and iti 

"it seems there must be a fair amount claimed for missing assets, which is unexpected".

I believe that there has been a fair amount paid out in compensation to former SVS clients. Not for missing assets but for misselling etc. The amount may be higher than expected but do take into account that claims management companies know how to make successful claims. If you wonder how they managed to contact SVS clients have a look at the FCA pages.

Oh yes, I'd completely forgotten about their advisory service and of course the failed SVS mini-bonds that SVS was actively hard-selling to customers near the end. I do hope most people avoided using claims management companies in respect of that. The proper route is via the Financial Ombudsman Service, which is simple to use and costs nothing, whereas those inserting an unnecessary third party between them and the FOS would be billed following a successful claim, and would not be entitled to add the cost of the fees to their compensation award.

I recall that one poster ( @englishmas ) had already gone down that route in respect of the SVS advice in advance of them going into administration and been awarded a sum in excess of the FSCS limit, which will entitle them only to £85k including the claim for fees.

I realise I made a mistake in totting up the costs of the administration, and omitted £5m in costs from outsourced activities, so the total was £18.1m, meaning there was £13.5m paid out in compensation for investment losses of various kinds.

You said that "The proper route is via the Financial Ombudsman Service, which is simple to use and costs nothing". Are you unaware that the FOS has said, and I quote, “as SVS is in administration, any complaint relating to it will need to be referred by you to the Financial Services Compensation Scheme rather than our service"?
But you are right; the proper route is via the FOS. Shame on them for being obstructive.

This is not correct when the claim is for bad advice leading to investment losses. The FSCS cannot award compensation without an FOS decision on the complaint, it does not adjudicate complaints and cannot decide itself whether compensation is warranted. FOS staff should know this from multiple prior cases of mini-bonds and other unsuitable investments failing. If they are turning away genuine complaints, then I agree that is shameful and those matters should be referred to the Independent Assessor. However, it would be correct in saying this about complaints that involve things that happened after SVS entered administration.

Where has the FOS stated the quoted text? I cannot locate the reference.

Edit: It looks like my information is out of date. The process has changed at some point in the last few years and FSCS does deal directly with compensation for bad advice without a complaint needing to first be brought to the FOS. This is what happens now, for example, for financial advisers who have retired or gone out of business before a complaint is brought/resolved. Those missold London Capital & Finance mini-bonds were all directed to complain to FOS in 2019 if they wanted to be considered for compensation for bad financial advice and this ended up being subject to a judicial review in 2000 because they were unhappy with the FOS decisions. It seems in more recent misselling scandals, such as defined benefit pension transfers, those who have been advised by firms or individuals no longer trading are asked to submit evidence directly to FSCS, as are LCF bondholders who have not yet tried to claim compensation.

Hi Masonic,

I believe that exSVS clients can make a claim direct with the FSCS or through the FOS.

SVS (in Special Administration) is still regulated by the FCA and complaints relating to SVS are still within the jurisdiction of the FOS.

A reason for going through the FOS is so that there is a greater degree of transparency.

masonic

RasputinB said:

masonic said:

RasputinB said:

masonic said:

RasputinB said:

masonic said:

johnburman said:

See FT ADVISOR story on svs and iti 

"it seems there must be a fair amount claimed for missing assets, which is unexpected".

I believe that there has been a fair amount paid out in compensation to former SVS clients. Not for missing assets but for misselling etc. The amount may be higher than expected but do take into account that claims management companies know how to make successful claims. If you wonder how they managed to contact SVS clients have a look at the FCA pages.

Oh yes, I'd completely forgotten about their advisory service and of course the failed SVS mini-bonds that SVS was actively hard-selling to customers near the end. I do hope most people avoided using claims management companies in respect of that. The proper route is via the Financial Ombudsman Service, which is simple to use and costs nothing, whereas those inserting an unnecessary third party between them and the FOS would be billed following a successful claim, and would not be entitled to add the cost of the fees to their compensation award.

I recall that one poster ( @englishmas ) had already gone down that route in respect of the SVS advice in advance of them going into administration and been awarded a sum in excess of the FSCS limit, which will entitle them only to £85k including the claim for fees.

I realise I made a mistake in totting up the costs of the administration, and omitted £5m in costs from outsourced activities, so the total was £18.1m, meaning there was £13.5m paid out in compensation for investment losses of various kinds.

You said that "The proper route is via the Financial Ombudsman Service, which is simple to use and costs nothing". Are you unaware that the FOS has said, and I quote, “as SVS is in administration, any complaint relating to it will need to be referred by you to the Financial Services Compensation Scheme rather than our service"?
But you are right; the proper route is via the FOS. Shame on them for being obstructive.

This is not correct when the claim is for bad advice leading to investment losses. The FSCS cannot award compensation without an FOS decision on the complaint, it does not adjudicate complaints and cannot decide itself whether compensation is warranted. FOS staff should know this from multiple prior cases of mini-bonds and other unsuitable investments failing. If they are turning away genuine complaints, then I agree that is shameful and those matters should be referred to the Independent Assessor. However, it would be correct in saying this about complaints that involve things that happened after SVS entered administration.

Where has the FOS stated the quoted text? I cannot locate the reference.

Edit: It looks like my information is out of date. The process has changed at some point in the last few years and FSCS does deal directly with compensation for bad advice without a complaint needing to first be brought to the FOS. This is what happens now, for example, for financial advisers who have retired or gone out of business before a complaint is brought/resolved. Those missold London Capital & Finance mini-bonds were all directed to complain to FOS in 2019 if they wanted to be considered for compensation for bad financial advice and this ended up being subject to a judicial review in 2000 because they were unhappy with the FOS decisions. It seems in more recent misselling scandals, such as defined benefit pension transfers, those who have been advised by firms or individuals no longer trading are asked to submit evidence directly to FSCS, as are LCF bondholders who have not yet tried to claim compensation.

Hi Masonic,

I believe that exSVS clients can make a claim direct with the FSCS or through the FOS.

SVS (in Special Administration) is still regulated by the FCA and complaints relating to SVS are still within the jurisdiction of the FOS.

A reason for going through the FOS is so that there is a greater degree of transparency.

While I am certain that is how it used to work, all references to considering cases where a firm has ceased trading or gone into administration have been removed from the FOS website, and recent instances of firms becoming insolvent have come with text suggesting the FSCS is the only route:

"Unfortunately, when a business goes into administration we are required to stop considering complaints against it. So we’re unable to progress any new or existing complaints about [firm name]."

https://www.financial-ombudsman.org.uk/news-events/reports-casheuronet-quickquid

https://www.financial-ombudsman.org.uk/news-events/uncle-buck-finance-llp

"We will no longer progress existing complaints against BBSAL and will be in touch with you in due course with further information about passing your complaint to the FSCS."

https://www.financial-ombudsman.org.uk/news-events/berkeley-burke-sipp

Over at the FCA website, the only mention of FOS cases being transferred to FSCS is for the most recent of these, nothing in documents prior to 2020.

"I have a complaint with the FOS what do I have to do? If you already have a claim with the Financial Ombudsman Service (FOS), you don’t need to take any action at the moment. The FOS will be in touch with you shortly to ask permission to transfer your claim documents to the FSCS. When the FSCS receives your file, it will contact you directly to ask you to submit your claim."

https://www.fca.org.uk/news/news-stories/berkeley-burke-sipp-administration-limited-administration-sipp-business-transferred-hartley

While I don't see anything in the FCA handbook prohibiting the FOS from considering these complaints (see https://www.handbook.fca.org.uk/handbook/DISP/2/?view=chapter ), FOS and FCA both seem to believe cases should now be passed directly to FSCS upon a firm entering administration. Therefore it seems like a blanket refusal to consider such cases with full support from the regulator. I'd be interested in hearing from anyone who was able (in say the last 12 months) open a new FOS case against SVS for their conduct prior to entering administration.

RasputinB

If anyone wants to open a new FOS case, or cases, against SVS for their conduct prior to, or after, entering administration please also let us know. Or just do so - see earlier post for the wording to use.