SVS Securities - shut down?

masonic

johnburman wrote: »

Masonic you say of the costs of the Beaufort administratio "But this was only after a creditor backlash at the initial fees proposal."

But we do not know what the "initial fees proposal" is! It is some proportion of assets/cash with a cap: of how much or what we have no idea! [except for the 2 differing options put forward by the FSCS as examples]

The paragraph before the one you quoted addresses that:

masonic wrote: »

LC racked up ~£800k of costs in the first 6 weeks of the administration. If they continued at that rate, costs would be up at about £3m by now (just over 1% of AUM). It's hard to envisage a scenario in which they would exceed 5% of AUM in the end, so those at risk of exceeding the £85k limit would be those holding investments valued at >£1.7m with SVS.

The total fees will not be known until the end of the administration, or when client assets are transferred out if this happens. However, the busiest time for an administration tends to be the first 6 weeks, and the cost of that period was ~£800k.

The creditors committee will have more visibility into the fees being accrued. Did you apply to be a member?

johnburman

No...but maybe we both should done. Bit worroied that FSCS is on the committee. They as at 5 August (i repeat as at that day) have no liabilities...that only occurs after 5 August

masonic

johnburman wrote: »

No...but maybe we both should done. Bit worroied that FSCS is on the committee. They as at 5 August (i repeat as at that day) have no liabilities...that only occurs after 5 August

I wasn't eligible for the CC as my account was empty when they went bust, so I have nothing tied up in the administration. You're right that the FSCS was not technically a creditor at the time the committee was constituted, but they will be the largest creditor in the end. If it comes to a negotiation over fees, FSCS and client interests should be pretty well aligned.

bandlm

Cash invested 25,0000, mainly in AIM shares, last share value position before administration was 1,200

what can I hope for as a return ??

snipkin

masonic wrote: »

The paragraph before the one you quoted addresses that:

The total fees will not be known until the end of the administration, or when client assets are transferred out if this happens. However, the busiest time for an administration tends to be the first 6 weeks, and the cost of that period was ~£800k.

Thank you masonic and john burman for your interesting discussion. So is one of you saying that a warning (not to invest above £85K with any one nominee-system broker) is perhaps not so unnecessary as I was originally led to believe?

Personally, I have no idea - I am just a layman trying to get better returns than in a building society. I mostly invest in investment trusts.

masonic

snipkin wrote: »

Thank you masonic and john burman for your interesting discussion. So is one of you saying that a warning (not to invest above £85K with any one nominee-system broker) is perhaps not so unnecessary as I was originally led to believe?

I don't know what you were originally led to believe, but the discussion above suggests holding 20x the FSCS limit with SVS could theoretically put you at some risk if the administration fees were not capped.

johnburman

It's all a "it depends" question. It is the *losses* to you that matter, they include actual assets missing (contra the CASS rules - thankfully not here) and the costs of the administration. Thus here we have (for XO clients) £0 +£? = £?. Now we all accept that per client (with caps) the admin costs are going to be around what....£7-8k per client. Well under the £85k sure but we do not know the formula for working this out nor the total ££ LC will charge. Broadly only those with VERY LARGE accounts will be affected.

As for the future:

1 have joint accounts (double the £85k protection)
2 spread them about a bit. To be 100% certain with a max of £85k each...but in reality I would have a multiple of that figure. Remember all accounts cost...and some platforms are VERY expensive. The joy of SVS was its simple clear fixed price charging (with no admin costs added on)
3 make sure that the client segregation rules are followed. Any "mix-ups" (e.g. admin !!!! ups) report 'em to the FSA if you spot anything. If 'ringfencing' does not take place properly and robustly, each and every client will be screwed if the company goes bust.

coyrls

johnburman wrote: »

1 have joint accounts (double the £85k protection)

It is not possible to have joint investment, S&S ISA or SIPP accounts.

johnburman

Quite right. You can only Have SIPPs and ISAs in sole name. Therefore for ordinary share dealing accounts have them in joint accounts. Or even if you can in the name of the kids as well. 4 names is the usual maximum... at least for bank accounts. Of course if the kids or spouse sells everything and runs off to Monaco that's a risk but the 85k GBP limit is now looking dangerously low. PS in the USA the limit is 500k Dollars.

masonic

You can be more relaxed about the upper value of your investments at more significant providers, since there will be economies of scale during an administration (also likely better corporate governance meaning said administration is less likely to occur). The biggest provider with no ongoing charges is iWeb (Halifax Sharedealing). I moved there following SVS's trading fee hike 2 years ago.