SVS Securities - shut down?

eskbanker

johnburman said:

Yes you're technically right about the FOS. But ITI is still trading and is ignoring complaints and requests for compensation. Thus for clients and exclients the FOS must adjudicate and award completion. The comp is paid by ITI. If it does not the client will wind up the company. That should be of interest to the FCA

I've seen references on here to ITI being less than cooperative in the adjudication stage of FOS investigations, but are you saying that you have evidence of ITI refusing to comply with the final ombudsman decisions that are legally binding?  To the best of my knowledge there's only been one such decision made thus far, i.e. the Mr M one discussed a few pages back.

Even if this was the case, it's not massively likely that the situation would get anywhere near winding up, given the thresholds needed to pursue that avenue, as per https://www.gov.uk/wind-up-a-company-that-owes-you-money

To wind up a company you must:

• be owed £750 or more
• be able to prove that the company cannot pay you

[...]

The fees are:

• £302 - court fees
• £1,600 - petition deposit (to manage the ‘winding-up’)

You might be able to get the fees back if the company can afford to repay them.

so Mr M, even if he hasn't been paid the £250 he was owed by ITI, isn't in a position to wind them up.

Sheris said:

The FCA should have never allowed ITI Capital in the process for the take over of the ex SVS clients, and that is a fact, now proven to be a totally disaster with L&C walking away with millions.     

No, it's an opinion.

An understandable one, and one that I imagine will be shared by other ex-SVS victims, but that still doesn't make it a fact as such....

RasputinB

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?

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.

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

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.

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

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

masonic

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?

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.

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

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.

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

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

The FOS can instruct a firm to fix a problem for a client as part of their decision, if it is something the client wishes. I don't think that part of a decision can be taken to court and legally enforced. If problems recur after the complaint has been decided, then further complaints could be made, but it may not be in the client's interests to stick around and be subjected to a service that doesn't meet their expectations over the long term. In the case of ITI, if I was ever unlucky enough to have an account transferred to them involuntarily, I'd not keep it a moment longer than was necessary.

RasputinB

masonic said:

it may not be in the client's interests to stick around and be subjected to a service that doesn't meet their expectations over the long term

Don't forget that having had ones accounts and data shifted over to ITI there may be continuing problems after you have transferred from them e.g. data security issues, dividend issues, tax reporting issues, personal data issues; let alone problems with the actual transfer out.

masonic

RasputinB said:

masonic said:

it may not be in the client's interests to stick around and be subjected to a service that doesn't meet their expectations over the long term

Don't forget that having had ones accounts and data shifted over to ITI there may be continuing problems after you have transferred from them e.g. data security issues, dividend issues, tax reporting issues, personal data issues; let alone problems with the actual transfer out.

Those issues can all be addressed by the FOS to the extent that there shouldn't be a need to continually go back with additional complaints. For example, "personal data issues" and "data security issues", where there has been evidence of a data breach a firm would be expected to cover the cost of credit monitoring for a period of 12 months, and a separate claim could be made in the unlikely event of actual consequences stemming from identity theft. I haven't followed this thread very closely, but I haven't seen any posts here, nor industry news, about ITI suffering such a breach. Dividend issues can be sorted by claiming compensation to the value of any missing dividends in lieu of their payment at the point the account was transferred (plus additional compensation to cover the benefit lost if held in a tax-privileged  wrapper). Tax reporting is the responsibility of the client, but if the broker is unwilling to provide a statement it is obliged to provide in its T&Cs it would be reasonable to claim for the cost of engaging an accountant to do this work for the period of time the assets were held by ITI (failure to complete tax-reporting obligations is a regulatory breach as you might have mentioned above, and they'd be separately opening themselves up to trouble from HMRC if they do not properly complete their annual returns).

Slow transfers are a fact of the industry unfortunately, with many in specie transfers taking several months, but by "long term" I was referring to several years. If ITI ends up holding your assets hostage for many months during a transfer, then it seems like there is a route to forcing a resolution by the FOS issuing a decision for said assets to be transferred to the specified nominee, and I believe that is something that could be taken to court and used in the manner suggested by johnburman a few posts earlier. Again, apologies if I've missed it, but it seems like transfers are being completed, albeit much more slowly than hoped, but not as slowly as the 13 months iWeb has taken for one customer, for which they ended up offering a total of £475 compensation for that incident alone before the FOS reached a verdict.

FOS can be a bit hit and miss, so there is no guarantee they will always be willing to act in the suggested ways to resolve a complaint, but when you get someone good, my experience is that they put these sort of things on the table and they never end up being necessary as the firm is suitably incentivised to sort things out before it comes to that. If you are unlucky with your complaint handler, then precedent within the decisions database can be very helpful in supporting a particular course of action, if it can be found.

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.